While each facility's per discharge payment
began with its own cost base, the same annual updates permitted PPS-included hospitals were applied to excluded facilities as well.
Other payment changes included moving from cost-based reimbursement to per diem or per discharge payments
, with all models focused on setting "appropriate" payment rates as a function of expected resource needs based on scientific evidence and clinical guidelines, adjusting for patients' clinical severity and functional ability to account for the fact that patients require different levels of services depending on their clinical and functional status.
Comparing these data with ALOS data from Table 7 suggests that, while the average length of hospitalization (including only Medicare -- covered days) in specialty psychiatric facilities is almost 50 percent longer than in psychiatric units of general hospitals, the per discharge interim payments to psychiatric units in general hospitals are 16 percent higher than similar per discharge payments
to specialty psychiatric hospitals.