March 13, 2014 Health Plan Letter

March 13, 2014

Dear Health Plans:

The purpose of this letter is to provide Health Plans with the initial Medicaid inpatient rates for the period January 1, 2014 through March 31, 2014 for acute APR-DRG services and January 1, 2014 through December 31, 2014 for Detoxification and Exempt Unit services.

As stated in the notification provided to hospitals on December 9, 2013 regarding the delay of the rebasing of the 2014 acute rates, the 2014 APR-DRG Service Intensity Weights (SIWs) and 2014 v31 grouper will not be implemented until the 2014 rebasing of acute rates is completed. The 2014 rebased rates, SIWs and grouper will be implemented prospectively and will NOT be retroactive to January 1, 2014. At this time, payments for discharges effective on or after January 1, 2014 will be processed utilizing the 2013 SIWs, 2013 v30 grouper and the rates that are supplied with this publication. The statewide base price used in the January 1, 2014 acute rate calculation is the April 1, 2013 base price.

The rates for the above periods are based upon the same methodology and data used in the January 1, 2013 through December 31, 2013 period but take into consideration the following:

  1. The Centers for Medicare & Medicaid Service approved SPA#11-82 to continue and expand hospital payment incentives to reduce potentially preventable complications and readmissions. The gross annual savings associated with these incentives is $51M. The acute payment rates reflect an adjustment for potentially preventable readmissions (PPRs) and potentially preventable complications (PPCs). The prior rates effective 4/1/2013 reflected a retroactive adjustment for PPCs the period 7/1/2011 - 12/31/2012 which has since been removed.
  2. Inclusion of 2014 budgeted capital as reported by hospitals and calculated in accordance with Section 8 of Article 2807-c of the Public Health Law.
  3. For the psychiatric exempt unit rates, the transition pool allocation has been set to $0 effective January 1, 2014. January 1, 2013 through December 31, 2013 was the last rate year that a transition payment was included as an add-on payment. This is a reduction of $8.5M that had been included in the 2013 rates. As the psychiatric transition add-on does not impact the Managed Care rates, the $8.5M reduction was included in the calculation of the 2014 psychiatric statewide price.

The enclosed rate schedules include the rate components required to process Medicaid claims. Based on these changes, plans are encouraged to process adjustments according to the terms of their provider contracts with hospitals. This includes any reprocessing that should occur consistent with those agreements. Also included are payment calculation files that display how each component from the schedule is used in the payment of a Medicaid claim, where applicable. As with the 2013 rates, these rate schedules and the payment calculation files have been updated to include the new psychiatric reform rates and payment methodology.

On the attached schedules, we have included all hospitals and the Medicaid Managed Care Rates and GME Rates, where applicable, for the below listed inpatient services.

  • Acute Case Payment (Per Discharge)
  • Specialty Hospitals (Long Term Acute, Cancer and Blythedale Children´s) Per Diem
  • Psychiatric Exempt Unit (Per Diem)
  • Chemical Dependency Rehab Exempt Unit (Per Diem)
  • Critical Access Hospitals (Per Diem)
  • Medical Rehab Exempt Unit (Per Diem)
  • Chemical Dependency Detoxification Exempt Unit (Per Diem)

Acute Care Per Case Rate Schedules - These are the rate components to be paid to hospitals for acute services:

  1. Default & Contract Discharge Case Payment Rate (Including PHL 2807-c(33) but Excluding GME): Acute per case payment to be used when either an HMO plan contract is applicable or not applicable. This is the statewide price adjusted by ISAF (Column 3). The per discharge has been adjusted to reflect the reduction for PPNOs.
  2. Default & Contract Statewide Base Price (Including PHL 2807-c(33)): Statewide base price when HMO contract is applicable or not applicable.
  3. Institutional Specific Adjustment Factor (ISAF): Hospital specific adjustment to reflect wage differences (Wage Equalization Factor).
  4. High Cost Charge Convertor: Charge convertor to reduce hospital charges for cost outlier payments.
  5. Indirect Medicaid Education Percentage (IME%): This is the indirect medical education percentage and is provided here for information only.
  6. Direct Medical Education (DME) Add-on: This is the Direct Medical Education per discharge add on and is provided for information only. The add-on displayed in this column has been adjusted to reflect the reduction for PPNOs.
  7. Capital Per Discharge (Excluding Non-comparable Add-ons): Capital Per Discharge to be included after application of Service Intensity Weights (SIW´s).
  8. Ambulance Add-ons: This represents ambulance per discharge to be added on after application of SIW. This add-on has been adjusted to reflect the reduction for PPNOs.
  9. TEA Physician Add-on: This is the add-on for physician costs for those hospitals that are Teaching Election Amendment hospitals for the Medicare program to be added on after application of SIW. This add-on has been adjusted to reflect the reduction for PPNOs.
  10. School of Nursing Add-on: This represents an add-on per discharge for those hospitals with Schools of Nursing and is added after application of SIW. This add-on has been adjusted to reflect the reduction of PPNOs.
  11. Capital Per Diem: This is the capital per diem to be used when transfer payment on a per diem basis is being made.
  12. Sterilization During Delivery: This is for Managed Care enrollees of Fidelis Care only.
  13. ALC Per Diem: This is the Alternate Level of Care per diem for those patients who no longer require acute hospital care and are awaiting placement or discharge.
  14. Indigent Care and Health Care Initiatives Surcharge: This is the surcharge percentage obligation as authorized by Public Health Law 2807-j.

Inpatient Exempt Unit Rates - These are the rate components to be used for exempt hospitals or exempt units within general hospital in accordance with Article 2807-c of the Public Health Law:

  1. Specialty Acute Hospital Billing Rate (w/out DME): This per diem is for specialty long term acute hospitals, cancer hospitals, and Children´s Hospitals.
  2. Specialty Acute DME Add-on: Direct Medical Education per diem for information only.
  3. Specialty Acute ALC Per Diem: Alternate Level of Care per diem for those patients who no longer require specialty acute services and are awaiting placement or discharge.
  4. Psychiatric Billing Rate: This is the operating portion of the billing rate which consists of the statewide price adjusted by an institution specific adjustment factor (ISAF) and a rural adjustment factor (if applicable).
  5. Psychiatric Non-Operating Billing Rate (w/out DME): This is the capital portion of the billing rate.
  6. Psychiatric DME: This is the Direct Medical Education per diem add-on which has been provided for informational purposes only.
  7. Psychiatric ECT Payment: This is the Electroconvulsive Therapy add-on (per treatment) which has been adjusted by the same ISAF as the statewide price.
  8. Psychiatric ALC Per Diem Rate: Alternative Level of Care per diem for those patients who no longer require psychiatric services and are awaiting placement or discharge.
  9. Chemical Dependency Billing Rate: Per diem for Alcohol and Drug Rehabilitation programs which have now been combined into one service type.
  10. Chemical Dependent DME Add-on: Direct Medical Education per diem for information only.
  11. Chemical Dependency ALC Per Diem: Alternate Level of Care per diem for those patients who no longer require CD Rehab services and are waiting placement or discharge.
  12. Critical Access Hospital Billing Rate: Per Diem to be paid to those hospitals that are designated as critical access hospitals.
  13. Critical Access Hospitals ALC Per Diem: Alternate Level of Care per diem to be paid for patients who no longer require acute care and are waiting placement or discharge.
  14. Medical Rehabilitation Billing Rate: Per diem for medical rehabilitation services.
  15. Medical Rehabilitation DME Add-on: Direct Medical Education per diem for information only.
  16. Medical Rehabilitation ALC Per Diem: Alternative Level of Care per diem to be paid for patients who no longer require acute care and are waiting placement or discharge.
  17. Detox Medically Managed Billing Rate: Per diem to be paid to hospitals for medically managed services with certified detox program by OASAS. This information has been published on a separate schedule.
  18. Detox Medically Supervised Billing Rate: Per diem to be paid to hospital for medically supervised services with certified detox program by OASAS. This information has been published on a separate schedule.
  19. Indigent Care and Health Care Initiative Surcharge: This is the surcharge percentage obligation as authorized by Public Health Law Section 2807-j.

Should you have any questions regarding the above data, please submit your inquiry to hospffsunit@health.state.ny.us email address and an analyst from the hospital fee-for-service unit will respond.

Sincerely,

Michael Ogborn
Director
Bureau of Acute and Managed Care Rate-Setting