Questions and Answers

What are the 3M ™ All Patient Refined Diagnosis Related Groups (APR-DRGs)?

The All Patient Refined Diagnosis Related Groups (APR-DRGs) are a hospital inpatient services classification system developed by the National Association of Children's Hospitals and Related Institutions (NACHRI), and 3M ™ Health Information Systems. APR-DRGs are designed to account for severity of illness and risk of mortality.

Will I have to start collecting additional data to use the 3M ™ APR-DRGs?

No, all data should be currently in abstract records.

Why did the New York State Department of Health choose the 3M ™ APR-DRGs as a basis for this new reimbursement system?

The Department chose the APRs as the best tool to better represent the needs of the Medicaid population for more accurate and up to date payments to hospitals. The Department reviewed current literature including a report issued by the Rand Corporation ("Evaluation of Severity-Adjusted DRG Systems", March 2007) and analyzed various software applications prior to choosing the 3M ™ APR-DRGs.

What is the date of implementation of the new Medicaid FFS Inpatient Rate using APR-DRG's?

December 1, 2009.

Will the state in any way use the AP DRGs for claims for dates of service on or after December 1, 2009?

No, however if a claim has a discharge date prior to December 1, 2009 or is a resubmission of a claim for services prior to December 1, 2009, the claim will be grouped under the AP DRG methodology.

Will I need to continue to use the All Patient (AP) DRGs? If so, for how long?

You will need to continue using the AP DRGs for all covered discharges prior to December 1, 2009 and possibly to conform to existing hospital specific contractual relationships.

Will the reimbursement formulas be the same as with the AP DRGs? If no, what are the differences?

No. The payment formulas have been revised significantly. See the Reform presentation on the main page for more details.

What are the key patient classification mechanisms utilized in 3M ™ APR-DRGs?

APR-DRGs assign each record one of 314 possible DRG's based on the reason of admission and further sub-classifies it according to the severity of illness (SOI). Each DRG SOI combination is associated with a specific relative weight. This relative weight along with other factors (e.g. wage equalization factor and direct medical education) is used to calculate the rate of reimbursement for the case.

Where can I see the specific information for my hospital used to calculate payments?

You may access facility specific information on the Health Provider Network (HPN) in the Division of Health Care Financing section under Inpatient Reform Rates. In addition, the Department will be updating and sharing this information on a periodic basis.

How often will the reimbursement information be updated?

Information will be updated on an annual basis.

Will there be changes in the way bills are submitted for payment?


What should my hospital do to get ready for and implement the 3M ™ APR-DRGs?

The NYS Department of Health does not require that hospitals have APR-DRGs in house to submit their claims. However, hospitals may want to incorporate APR-DRGs into their coding and reimbursement, financial management and or quality management systems in order to function well under the new Medicaid payment system. There are number of steps to take to get ready of this implementation.

Are Critical Access Hospitals (CAH) included in this new payment system?

The cost base for CAH's is being updated. See the Reform presentation on the main page for more details.

Will the 3M ™ APR-DRGs work with my system?

Yes. The 3M ™ APR-DRGs solution is designed to be compatible with most systems, and is available in a Microsoft® Windows® or a mainframe environment. Most major hospital billing system vendors already interface with the 3M ™ APR-DRG Software.

Will I need to buy new APR-DRG software every time changes are made to the reimbursement formulas?

No, once the APR-DRG and NY Medicaid APR-DRG Reimbursement Calculation (RCS) software is purchased all updates to the annual policy changes will be included as part of the software agreement. You will not have to repurchase the RCS as long as reimbursement is based on the APR-DRG grouper.

Will the 3M ™ APR-DRGs help my facility in a Pay 4 Performance environment?

Absolutely. APR-DRG will help give you an accurate picture of your patient case mix. By using APR-DRG to severity adjust your population in your quality work (such as looking at adverse complications and readmission), you more accurately segment your data to review performance and practice patterns, root cause and financial implications. Since many national and local reporting agencies use APR-DRG in their severity adjustment of their quality comparison rates, you will be able to replicate their profiling.

What are the benefits of the 3M ™ APR-DRGs for my hospital?

By using the APR-DRGs, groupings for your patients will be more precise resulting in a more accurate payment to your facility. In addition, APR-DRGs provide a foundation for the implementation of other quality refinements such as potentially preventable complications and potentially preventable readmissions.

How can I find out more about the 3M ™ APR-DRGs?

For more information on 3M ™ APR-DRGs please click on the links below:

Can a transfer case also be considered for a cost outlier payment?

Cost outlier payments shall not be made for cases that qualify as transfers (other than patients assigned to transfer DRGs, 580 and 581). Patients assigned to transfer DRGs may meet the criteria for outlier payments.

Are all per diem rates eliminated due to short/long stay outlier payment elimination?

There will be per diem rates for transfer payments only. The reform methodology eliminates short stays and long stays.

What grouper setting will be used for the birth weight option field in the software?

Always use #1 - Entered Only

Will there still be an upstate/downstate average length of stay (ALOS)?

No. The state is switching to a statewide ALOS.

Are short stay payments still in effect?

No. The short stay payment has been eliminated. All cases previously classified as short stays will now qualify for an inlier payment.

Is there any GME or DME payment built into the claim payments?

Yes. The new payment methodology includes both a direct medical education and indirect medical education component.

When will the finalized DRG weights, means, and cost trims be available?

Finalized weights should be available no later than December 1, 2009.

Is it only discharge disposition 02 (transfer to acute care facility) that triggers transfer pricing?

Yes, only 02 will trigger transfer pricing.

What version of the 3M ™ APR-DRGs will New York be using?

New York will use version 26.1 effective 12/1/09 through 12/31/10 and version 28 effective 1/1/11.

Is there a requirement for Medicaid Managed Care plans to pay cost outlier payments?

Payments for cost outliers will depend on the negotiated contract between the hospital and the plan.

What is the Wage Equalization Factor (WEF) based on?

The WEF was determined by using 2005 Medicare data. It will be updated annually.

How many diagnosis and procedure codes will eMedNY accept?

eMedNY will now accept 25 diagnosis codes and 25 procedure codes.

Are payors other than Medicaid (Managed Care, Workers Comp, No Fault) affected by the new reimbursement methodology?

Yes. Managed Care, Workers Comp and No Fault will all reimburse under APR-DRGs effective December 1, 2009.

When calculating cost outliers, do we use just the acute charges? (ie. Non ALC)

Yes, only the acute charges are used.