September 10, 2012 Health Plan Letter

September 10, 2012

Dear Health Plans:

The purpose of this letter is to provide Health Plans with the initial Medicaid inpatient rates for the period January 1, 2012 through March 31, 2012 for acute APR-DRG services and January 1, 2012 through December 31, 2012 for Detoxification and Exempt Unit services.

The rates for the above periods are based upon the same methodology and data used in the October 1, 2011 through December 31, 2011 period but take into consideration the following:

  1. Update to the statewide base price for acute services to reflect the update of the Service Intensity Weights (SIWs) for 2012 due to the updating of utilization and case mix indexes for more current data.
  2. Continuation of the potentially preventable re-admissions (PPR) adjustments as contained in the rates for the period October 1, 2011 through December 31, 2011.
  3. Inclusion of 2012 budgeted capital as reported by hospitals and calculated in accordance with Section 8 of Article 2807-c of the Public Health Law.

The enclosed rate schedules include the rate components required to process Medicaid claims. Also included are schedules that display how each component from the schedule are used in the payment of a Medicaid claim, where applicable. These rates schedule calculations are unchanged from the previous October 1, 2011 publication.

Please note that we have included all hospitals on the attached schedules as in the past and the Medicaid Managed Care Rate and GME Rates are provided, where applicable, for the below listed inpatient services. The Psychiatric Exempt Unit rates have not been included. The process by which these rates shall be implemented is still under development and will be provided in the near future.

  • Acute Case Payment (Per Discharge)
  • Specialty Hospitals (Long Term Acute, Cancer and Blythedale Children´s) 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 PPRs.
  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 Medical 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 PPRs.
  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 PPRs.
  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 PPRs.
  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 PPRs.
  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 rate components are those 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. The add-on displayed in this column had been adjusted to reflect the reduction for PPRs.
  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 Per Diem: Plans should continue to use existing psychiatric per diems that were transmitted effective January 1, 2010.
  5. Psychiatric DME: Same as number 4.
  6. Psychiatric ALC Per Diem Rate: Same as number 4.
  7. Chemical Dependency Billing Rate: Per diem for Alcohol and Drug Rehabilitation programs which have now been combined into one service type.
  8. Chemical Dependent DME Add-on: Direct Medical Education per diem for information only.
  9. Chemical Dependency ALC Per Diem: Alternate Level of Care per diem for those patients who no longer require acute services and are waiting placement or discharge.
  10. Critical Access Hospital Billing Rate: Per Diem to be paid to those hospitals that are designated as critical access hospitals.
  11. Critical Access Hospital 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.
  12. Medical Rehabilitation Billing Rate: Per diem for medical rehabilitation services.
  13. Medical Rehabilitation DME Add-on: Direct Medical Education per diem for information only.
  14. 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.
  15. 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.
  16. 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.
  17. Indigent Care and Health Care Initiative Surcharge: This is the surcharge percentage obligation as authorized by Public Health Law Section 2807-j.

Chemical Dependency Detox Exempt Unit Per Diem

Plans are reminded that observation days (up to 2 days of care) are to be recognized for payment at the MMD rate. Additionally, length-of-stay reductions in payment apply to both MMD and MSIW service rates (inclusive of capital) as follows:

  • Days 0-5 are to be reimbursed at 100% of the applicable rate,
  • Days 6-10 are to be reimbursed at 50% of the applicable rate,
  • Days 11 and greater are not reimbursable (i.e. 0%).

The Billing Instructions for Part 816 OASAS Certified Chemical Dependency Detox included with my July 6, 2011 letter provided the corresponding Medicaid Fee-For-Service rate code descriptions and necessary details for accurately calculating payment for inpatient chemical dependency detoxification services provided at OASAS certified general hospitals.

Should you have any questions regarding the above data, please do not hesitate to contact me at (518) 474-3267.

Sincerely,

John W. Gahan, Jr.
Director
Bureau of Primary and Acute Care Reimbursement