APR-DRG and Exempt Rates for Medicaid Fee-for-Service and Medicaid Managed Care

July 2, 2014

Dear Health Plans:

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

The July 1, 2014 acute rates incorporate an updated cost base, as required in statute, and policy updates. However, the method and rate components used for the payment of a Medicaid claim remains unchanged from the prior APR-DRG rates. For payment of the July 1, 2014 rates, the 2014 service intensity weights (SIWs), average length of stay and cost outlier thresholds will be utilized. Please note that the 2014 SIWs will be implemented beginning July 1, 2014 and will not be implemented retroactively. The 2014 SIWs have been posted on the Department’s public website for your use at the following link: http://www.health.ny.gov/facilities/hospital/reimbursement/apr-drg/weights/

The Managed Care rate schedules include the rate components required to process Medicaid claims. Based on the rate 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. As the payment methodology has not changed, please refer to the payment calculation files on the Department’s public website that are posted with the January 1, 2014 schedules and 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 July 1, 2014.

Acute Care Per Case Rate Schedules

As with previous publications, below are the rate components to be paid to hospitals for acute services:
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.
Default & Contract Statewide Base Price (Including PHL 2807-c(33)):
Statewide base price when HMO contract is applicable or not applicable.
Institutional Specific Adjustment Factor (ISAF):
Hospital specific adjustment to reflect wage differences (Wage Equalization Factor).
High Cost Charge Convertor:
Charge convertor to reduce hospital charges for cost outlier payments.
Indirect Medicaid Education Percentage (IME%):
This is the indirect medical education percentage and is provided here for information only.
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.
Capital Per Discharge (Excluding Non-comparable Add-ons):
Capital per Discharge to be included after application of Service Intensity Weights (SIW´s).
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.
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.
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.
Capital per Diem:
This is the capital per diem to be used when transfer payment on a per diem basis is being made.
Sterilization During Delivery:
This is for Managed Care enrollees of Fidelis Care only.
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.
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 information, please submit your inquiry to the 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