Hospitals - Additional Investment approved by CMS

APG base rates updated February 15, 2013

The Centers for Medicare and Medicaid Services has approved the additional $92M annual investment in APGs beginning effective December 1, 2009. In addition, the revised base rates have been approved by the Division of the Budget and transmitted to eMedNY for payment. The rates were activated on February 15, 2013 and retroactive rate processing automatically occurred in cycle #1853 with a check date of February 25, 2013 and a check release date of March 13, 2013. In addition, in cycle 1854 and 1855, a correction to the retro processing was implemented.

In addition to the additional $92M investment, the base rates activated retroactively on February 15, 2013 were revised to incorporate the following adjustments:

  • Removal of $5M from clinic rates for OT/PT/Speech carve in to APGs from ordered ambulatory as of October 1, 2010.
  • Removal of $2M from clinic rates for Community Support Program as of October 1, 2010.
  • Removal of $22M from clinic rates and $8M from ED rates for physician's payment carve out of APGs effective April 1, 2011.
  • Reweighting effective July 1, 2011 (affects Clinic, ED and AMB rates)
  • Removal of $25M from all hospital clinic outpatient services effective May 1, 2012 based on the 2012/2013 state budget (Phase II MRT 5912).

The historical rate changes by effective date beginning 12/1/2009 are due to the following:


Rate change was due to the blend payment changing from 25/75 to 50/50. Additional investment was included beginning as of this date.


Rate change was due to a reweighting and rebasing. Retro payments for 2009 were added to the 2010 rates ($11M for OPD, $7M for AMB) in addition to the AMB and ED ongoing investments each being decreased by $3M with the $6M being added to the ongoing OPD investment. As a result of the reweighting, the OPD case mix increased which would normally cause a decrease in the base rates. However, the effect of the retro payment and the investment transfers to OPD was a net increase in the OPD base rates. The effect of the reweighting on AMB and ED was a large decrease in the case mix and a large increase in the base rates. These rates were loaded to the eMedNY payment system during 2010 and are not part of the February 15, 2013 rate update.


Rate change was due to a reweighting.
Case mix decreased causing the OPD rate to increase to stay budget neutral.


Removal of $5M and $2M as stated above.


Rate change was due to the blend payment changing from 50/50 to 75/25.


Rate change was due to the removal of physicians costs as stated above.


Rate change was due to a reweighting.
Case mix decreased causing the rate to increase to stay budget neutral.


The rate decreased due to the blend payment changing from 75/25 to 0/100.


Rate change was due a $25M reduction in the investment as stated above.

At this time, the APG capital rates have not been revised to update to the 2 year base capital as required in regulations (Part 86-8.4(b)), however, these calculations are in process and will be forthcoming at a later date.

Many providers have questioned their base rate payments received. As providers should have received an overall payment for the APG base rate increase, the payment for 2011 and 2012 would be less than the full investment. This is due to the method of implementing the investment in the APG rates.

When the investment was implemented in the 2010 rates, the blend % for APG and Existing rate were 50/50. For 2011 this blend was 75% APG, 25% Existing and 2012, 100% APG. Due to the % allocation for APGs being 50% in 2010, in order to pay out the full $178M that was originally approved by CMS, the $178M was divided by 50% to determine the investment. $356M was included as the investment in the base rates so that when the 50% was applied to the APG base rate, $178M would be paid. In 2011 and 2012, the investment added should have been reduced to reflect the percentage change to 75% and 100%, respectively. Since the latest rates being paid to providers was the July 1, 2010 rate, providers were being overpaid for the original $178M investment and, in essence, have already received a portion of the $92M additional investment. In 2012, there was actually an overpayment paid to providers since the investment paid was over the $270M investment level.