Glossary

Hospitals and hospital units that are specifically excluded from Medicare’s prospective pay system. These commonly include children’s, cancer, hospital based outpatient care, long-term care, rehabilitation inpatient and psychiatric hospitals or units. Rehabilitation or psychiatric units of acute care hospitals are exempt if they meet certain criteria specified by HHS and are referred to as “DRG exempted”. Excluded facilities are paid through submission of cost reports and TEFRA limits.