APR-DRG and Exempt Rates for Medicaid Managed Care

November 28, 2018

Dear Health Plans:

The purpose of this letter is to provide Health Plans with the initial hospital Medicaid inpatient acute rates for the period July 1, 2018 through December 31, 2018 for acute APR–DRG services.

The July 1, 2018 acute rates incorporate an updated cost base (2015), as required in statute, and policy updates. However, the method and rate components used for the payment of a Medicaid claim remains unchanged from the prior APR–DRG rates. For payment of the July 1, 2018 rates, the July 1, 2018 service intensity weights (SIWs), average lengths of stay and cost outlier thresholds should be utilized, as well as the 3M APR–DRG grouper version 34. The July 1, 2018 SIWs have been posted on the Department’s public website for your use.

The enclosed rate schedules include the rate components required to process Medicaid claims. Based on the above changes, plans are encouraged to process adjustments according to the terms of their provider contracts with hospitals. This includes any reprocessing that should occur consistent with those agreements. As a reminder, the Managed Care model contract requires Managed Care Organizations (MCOs) to pay hospitals for quality and sole community provider pool distributions. Managed Care premium adjustments for included rate schedule updates will be incorporated into the revised April 2018 premiums which the Department is currently finalizing.

Also enclosed are payment calculation files that display how each component from the schedule is used in the payment of a Medicaid claim, where applicable.

On the attached schedules, we have included all acute care hospitals and the Medicaid Managed Care Rates and informational GME rate components, where applicable, for the following inpatient service:

  • Acute Case Payment (Per Discharge)

Acute Care Per Case Rate Schedule

These are the rate components to be paid to hospitals for acute case payment 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) and transition adjustments (if applicable).
  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 Medicaid Education Percentage (IME%): This is the indirect medical education percentage and is provided for informational purposes only.
  6. Direct Medical Education (DME) Add–on: This is the Direct Medical Education per discharge add on and is provided for informational purposes only.
  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.
  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.
  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.
  11. Minimum Wage Add–on: This represents an add–on per discharge for those hospitals affected by the minimum wage increases effective January 1, 2018.
  12. Quality Pool Add–on: This represents an add–on per discharge for hospitals that qualify for the Quality Pool for SFY 2018–19.
  13. Sole Community Provider Pool Add–on: This represents an add–on per discharge for hospitals that qualify for the Sole Community Provider Pool for SFY 2018–19.
  14. Capital Per Diem: This is the capital per diem to be used when transfer payment on a per diem basis is being made.
  15. Sterilization During Delivery: This is for Managed Care enrollees of Fidelis Care only.
  16. 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.
  17. Indigent Care and Health Care Initiatives Surcharge: This is the surcharge percentage obligation as authorized by Public Health Law 2807–j.

Should you have any questions regarding the above rate information, please submit your inquiry to HospFFSunit@health.ny.gov and either Monique Grimm or Tami Berdi from the hospital fee–for–service rate setting unit will respond. Questions regarding Managed Care premiums should be addressed to bmcr@health.ny.gov.

Sincerely,

Michael Dembrosky
Director
Bureau of Acute & Managed Care Reimbursement