May 30, 2014 Health Plan Letter

May 30, 2014

Dear Health Plans:

The purpose of this letter is to provide Health Plans with the initial Medicaid inpatient rates for the period April 1, 2014 through June 30, 2014 for acute APR-DRG 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 rebasing of the 2014 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 April 1, 2014 will be processed utilizing the 2013 SIWs, 2013 v30 grouper and the rates that are supplied with this publication. The 2014 rebased rates are expected to be effective July 1, 2014

The rates for the above periods are based upon the same methodology and data used in the January 1, 2014 through March 31, 2014 period but take into consideration the following:

  1. In accordance with existing regulatory provisions, the annual pool allocation for Transition II decreased from $25M to $0 effective beginning 4/1/2014. The $25M reduction in the pool value was included in the statewide price calculation, resulting in a statewide base price increase for Fee-for-Service and Managed Care. The period 4/1/2013 through 3/31/2014 was the final year for Transition II.
  2. Budgeted capital revisions for Richmond University Medical Center, Kenmore Mercy Hospital, Mercy Hospital of Buffalo and Sisters of Charity Hospital.

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.

On the attached schedules, we have included all hospitals and the Medicaid Managed Care Rates and GME Rates, where applicable, for the Acute inpatient services only. The exempt unit rates were not subject to any changes effective April 1, 2014.

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.

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