November 22, 2013 Health Plan Letter
November 22, 2013
Dear Health Plans:
The purpose of this letter is to provide the Health Plans with the initial Medicaid inpatient psychiatric reform rates for the periods January 1, 2011 through March 31, 2011, April 1, 2011 through December 31, 2011 and January 1, 2012 through December 31, 2012.
The Centers for Medicare and Medicaid (CMS) approved State Plan Amendment 10-03 which established a new psychiatric inpatient reimbursement method for general hospitals and replaced a per diem payment method based on 1981 costs trended. This new method was established in order to pay more appropriately for inpatient psychiatric admissions and address length of stay variances. In accordance with Part 86-1.39 of NYCRR Title 10, such rates applicable to Managed Care inpatients otherwise subject to the provisions of Public Health Law section 2807-c(1)(a-2)(i) shall be effective with regard to patients admitted on and after January 1, 2011.
The components of the new psychiatric methodology will include the use of psychiatric APR-DRGs, a statewide price (adjusted for wage differences), capital costs and direct medical education costs (DME). DME costs associated with Medicaid Managed Care enrollees continue to be reimbursed through Medicaid Fee-for-Service only, therefore these per diem values are being provided for informational purposes only. This new methodology will also include payment factors based on rural hospital status, patient age, presence of mental retardation, co-morbidities, length of stay and a separate payment for electroconvulsive (ECT) treatment.
The enclosed rate schedules include the rate components required to process Medicaid claims. Also included are claims payment worksheets that display how each component from the schedules are used in the payment of a Medicaid claim. Please refer to the Department of Health APR-DRG website for the weights and co-morbidity factors: http://www.health.ny.gov/facilities/hospital/reimbursement/apr-drg/weights/. Please note that the Department expects the same set of APR-DRG weights for Psychiatric services to be in effect until the rates are rebased. For additional information regarding this payment methodology, please refer to the July 2013 New York State Medicaid Update at http://www.health.ny.gov/health_care/medicaid/program/update/2013/july13_mu.pdf.
Inpatient Psychiatric Exempt Unit Rates - These rate components are to be used for psychiatric exempt units within general hospital in accordance with Article 2807-c of the Public Health Law. Below are brief descriptions of each column provided on the rate schedules:
- Psychiatric Operating 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).
- Psychiatric Non-Operating Billing Rate (w/out DME): This is the capital portion of the billing rate.
- Psychiatric DME (Informational Only): This is the Direct Medical Education per diem add-on which has been provided for informational purposes only.
- Psychiatric ECT Payment: This is the Electroconvulsive Therapy add-on (per treatment) which has been adjusted by the same ISAF as the statewide price.
- Psychiatric ALC Per Diem Rate: Alternative Level of Care per diem to be paid for patients who no longer require psychiatric care and are waiting placement or discharge. (Note: for the January 1, 2012 rate publication, the corresponding column numbers for the above are 4 - 8).
Should you have any questions regarding the above information, please contact the hospital rate setting unit at HospFFSunit@health.state.ny.us.
Sincerely,
Michael Ogborn
Director
Bureau of Acute and Managed Care Rate-Setting
