What were the exact Medicare IPPS rate changes (DRG weights and dollar amounts) applied to COVID‑19 DRGs during the PHE?
Executive summary
The CARES Act and subsequent CMS guidance applied a statutory 20% add-on to the DRG weighting for inpatient Medicare discharges with a COVID-19 diagnosis during the Public Health Emergency (PHE), and CMS layered additional special-payment rules — notably an outlier payment methodology change and extensions of COVID‑related add-ons — but exact dollar increases per DRG depend on each DRG’s relative weight and the fiscal-year standardized amount and wage index so CMS did not publish a single universal dollar figure applicable to all hospitals [1] [2] [3] [4]. CMS also specified that the 20% weighting increase applied only during the PHE and would not apply to discharges on or after May 12, 2023 [1] [3].
1. The statutory 20% DRG weight increase and how it worked on paper
Section 3710 of the CARES Act directed the Secretary to increase the weighting factor of the assigned MS‑DRG by 20% for patients diagnosed with COVID‑19 and discharged during the PHE; CMS implemented this by applying an adjustment factor that increased the DRG relative weight by 20% for qualifying claims, which in turn increased the IPPS operating payment that is calculated by multiplying the DRG relative weight by the standardized payment amount and applicable hospital wage‑index and adjustment factors [1] [2] [3] [4]. CMS’ public pages and rulemaking repeatedly restate the 20% DRG add‑on as the core statutory mechanic for COVID‑19 inpatient payments through the PHE [1] [3].
2. Why there is no single “dollar amount” to quote for every COVID‑19 DRG
CMS did not publish a single flat-dollar bump because IPPS payments are computed per case from the DRG relative weight times the fiscal‑year standardized amount and multiple hospital‑specific adjustments (wage index, DSH, IME, etc.); therefore a 20% increase in relative weight produces different dollar increases across DRGs, across fiscal years (FY standardized amounts change), and across hospitals, meaning exact dollar impacts require case‑level or DRG‑level arithmetic using CMS rate tables and the hospital’s wage‑index data rather than a one‑line CMS dollar figure [3] [5].
3. Additional COVID‑era payment mechanics that raised payments beyond the 20% add‑on
CMS introduced or extended other COVID‑era payments: the New COVID‑19 Treatments Add‑on Payment (NCTAP) was established and subsequently extended through the end of the fiscal year in which the PHE ends to mitigate disincentives for new treatments, and CMS modified outlier payment calculations to account for CARES Act increases and later introduced a special outlier rule for COVID‑related costs beginning Nov. 2, 2020 through the PHE that paid hospitals the lesser of 65% of the operating outlier threshold or 65% of the excess cost over the standard DRG payment for applicable claims [6] [7] [8] [5]. CMS explicitly said it modified the outlier fixed‑loss amount calculation to factor in CARES Act payment increases [5].
4. Timing, sunset and rate‑setting interactions that affected aggregate payments
The 20% DRG weight increase was explicitly tied to the length of the COVID‑19 PHE and CMS stated that the increase would not apply to discharges occurring on or after May 12, 2023, while FY‑by‑FY IPPS rules (for example FY 2022 and FY 2023 final rules) adjusted baseline standardized amounts, relative‑weight methodologies and quality‑program scoring that interact with the add‑on and change the net dollar effect hospitals experienced over time [1] [3] [5]. CMS also employed data‑selection and recalibration changes for FY 2022–2023 rate‑setting (such as using earlier year data or averaging weights with and without COVID claims) specifically to avoid skewing long‑run relative weights because of the PHE [9] [10].
5. What reporting confirms and what remains to be calculated
Primary CMS sources, the CARES Act text as implemented, and hospital‑advocacy summaries consistently confirm the 20% DRG weight add‑on and the related NCTAP and outlier policy changes as the main IPPS rate changes for COVID‑19 inpatients during the PHE [1] [4] [6] [8]. Precise dollar figures for a given DRG and hospital require applying the 20% weight increase to the published DRG relative‑weight tables and multiplying by the applicable FY standardized amount, wage index and any hospital adjustments; those per‑DRG computations are not summarized as a single CMS dollar table in the cited rule text and guidance [3] [5].