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In the Wake of the Tenet Investigation, CMS Issues Program Memorandum on DRG Outliers

 By Robert G. Homchick of Davis Wright Tremaine LLP

Last month, federal regulators launched a review of Medicare "outlier" payments to Tenet hospitals. An outlier is an inpatient case that is so expensive it exceeds the anticipated cost thresholds established by the Medicare Program. As a consequence, instead of paying the hospital on the diagnostic related group (DRG), the Medicare Program pays the hospital at a higher or outlier rate.

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