DRgs and RIMs: Implications for nursing

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In an effort to control escalating costs and introduce more equity in the financing of hospital services, the New Jersey Department of Health has instituted hospital reimbursement methodology that holds serious implications for nursing. Historically, the reimbursement system in New Jersey followed a retrospective per diem model. Expenses for much of capital outlay and uncompensated care were inequitably absorbed by those patients whose rates were not regulated. The per diem charge showed no sensitivity to a patient's nursing resource use, but used an averaging statistic to allocate cost. Cross subsidization routinely occurred between patients, departments and payers. The system provided hospitals with a blank check and no motivation to curtail costs. Since the mid-seventies, a series of progressive steps has led to incorporation of principles of prospective budgeting and an incentive system for effective management practices. A case mix methodology has been substituted for the charge and per diem model. In May 1983, the Health Care Advisory Board of the New Jersey Department of Health supported the decision to incorporate the Relative Intensity Measures (RIM) methodology into rate setting during 1984 for a select group of volunteer hospitals. Rates will be calculated for this limited group, and management reports showing nursing intensity will be developed for every hospital in the state. Though rates will be computed for these volunteer hospitals using the RIMs methodology, their reimbursement will still be based on the per diem formula. This period of experimentation and evaluation will allow any necessary refinement as a prelude to the formal introduction of RIMs for rate setting and reimbursement during 1985.

Original languageEnglish (US)
Pages (from-to)42-49
Number of pages8
JournalNursing Outlook
Issue number1
StatePublished - Jan 1 1984

All Science Journal Classification (ASJC) codes

  • Nursing(all)

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