Final APR-DRG Weights Effective January 1, 2014 - Delayed

December 09, 2013

Dear Administrator/Controller

In consensus with the Healthcare Association of New York State (HANYS) and Greater New York Hospital Association (GNYHA), the Department of Health will be delaying the implementation of the 2010 base year update in the acute inpatient Medicaid rates that was to be effective January 1, 2014. The acute rebasing rate initiative will be implemented effective on or after April 1, 2014 but no later than July 1, 2014.

The Exempt Hospital and Exempt Unit rates will be implemented as noticed on November 1, 2013 as the rebasing initiative did not affect those rate calculations.

In order to not impose retroactive rates on hospital providers for 2014, statute is being addressed to implement the delay. Please note that acute inpatient rates will, however, be calculated for the January 1, 2014 effective date but will include the following rate components:

  • April 1, 2013 Statewide Price;
  • Rate add-ons as included in the April 1, 2013 rates with the exception of the budgeted capital add-on. The budgeted capital add-on will be calculated using the 2014 budgeted capital surveys submitted to the Department;
  • Potentially Preventable Negative Outcomes (PPNOs) reduction factor included in the April 1, 2013 rates will be revised to eliminate the retroactive adjustment of the Potentially Preventable Complications (PPCs) for the July 1, 2011 thru December 31, 2012 period;
  • The Worker's Compensation/No Fault rate will be updated to include a 2014 trend factor;
  • Direct and Indirect Medical Education adjustments will be implemented for new teaching hospitals. However, the displaced residents policy will be delayed until the implementation of the 2014 acute rebasing rates.

In addition, during this delay period, acute claims will be processed with the rates calculated as stated above and using the following:

  • Grouped using the 2013 (v30) grouper;
  • 2013 SIWs

By using the 2013 grouper and SIWs, the claims will be processed using the grouping and weights that correspond with the development of the April 1, 2013 statewide price.

The 2014 (v31) grouper and 2014 SIWs will not be implemented until the acute 2014 rebasing rates are completed. The Department will continue to work with the Hospital Associations on the formulation of the 2014 acute rebasing rates and the development of the 2014 SIWs and corresponding statewide price. Please note that the 2014 rebased rates, v31 grouper and 2014 SIWs will be implemented prospectively. As stated above, they will be implemented on or after April 1, 2014 but no later than July 1, 2014. More information will be provided at a later date as to the actual implementation date.

If you have any questions, please send an email to the email account for response from the staff within the fee-for-service hospital rate unit.


John E. Ulberg, Jr.
Medicaid Chief Financial Officer
Division of Finance and Rate Setting
Office of Health Insurance Programs