Chapter 5101:3-2 Hospital Services

(A) To participate in the medicaid program, a hospital must have a valid, current provider agreement. A “provider agreement” is a contractual agreement whereby the provider agrees to adhere to conditions of participation with the Ohio department of job and family services as described in rule 5101:3-1-17.2 of the Administrative Code.

All hospitals, except those excluded in paragraphs (A)(1) and (A)(2) of this rule, that meet medicare (Title XVIII) conditions of participation as described in 42C.F.R 482, are eligible to participate in the Ohio medicaid (Title XIX) program upon execution of a provider agreement. Also considered to be eligible is a hospital that is currently determined to meet the requirements for Title XVIII participation and has in effect a hospital utilization review plan applicable to all patients who receive medical assistance under Title XIX. The following hospitals are excluded from participation:

(1) Tuberculosis facilities, and

(2) Facilities that have fifty per cent or more of their beds registered pursuant to Chapter 3701-59 of the Administrative Code as alcohol and/or drug abuse rehabilitation beds, and have no beds licensed as psychiatric beds pursuant to Chapter 5122-14 of the Administrative Code.

(B) The following facilities with more than sixteen beds shall be eligible to participate in Title XIX only for the provision of inpatient psychiatric services to recipients age sixty-five or older in accordance with paragraph (C) of this rule and to recipients under age twenty-one in accordance with paragraph (D) of this rule:

(1) A hospital with fifty per cent or more of its beds registered as alcohol and/or drug abuse rehabilitation beds that also has beds licensed as psychiatric beds pursuant to Chapter 5122-14 of the Administrative Code;

(2) Hospitals that have at least half of their beds licensed as psychiatric beds pursuant to Chapter 5122-14 of the Administrative Code or operated under the authority of the state mental health authority in accordance with section 5119.01 of the Revised Code; and

(3) Hospitals that have half or more of their discharges in any six-month time period reviewed by the Ohio department of job and family services and determined to be for psychiatric and/or substance abuse treatment.

(C) Hospitals that are eligible to participate only for the provision of inpatient psychiatric services in accordance with paragraph (B) of this rule and are rendering inpatient psychiatric services to recipients age sixty-five or older must be licensed by the Ohio department of mental health in accordance with Chapter 5122-14 of the Administrative Code or operated under the authority of the state mental health authority in accordance with section 5119.01 of the Revised Code, and must provide services in accordance with Chapter 5122-14 of the Administrative Code. Hospitals shall operate pursuant to the provisions of 42 C.F.R. 441 subpart C.

(D) Hospitals that are eligible to participate only for the provision of inpatient psychiatric services in accordance with paragraph (B) of this rule and are rendering inpatient psychiatric services for recipients under age twenty-one must:

(1) Provide services under the direction of a physician;

(2) Operate pursuant to the provisions of 42 C.F.R. 441 subpart D;

(3) Be a psychiatric hospital or an inpatient program in a psychiatric hospital, either of which is accredited by the “Joint Commission on Accreditation of Hospitals,” and must be licensed by the Ohio department of mental health in accordance with Chapter 5122-14 of the Administrative Code or operated under the authority of the state mental health authority in accordance with section 5119.01 of the Revised Code, and must provide services in accordance with Chapter 5122-14 of the Administrative Code; and

(4) Provide services before the recipient reaches age twenty-one or, if the recipient was receiving services immediately before he/she reached age twenty-one, before the earlier of the following:

(a) The date he/she no longer requires the services; or

(b) The date he/she reaches age twenty-two.

(E) The following facilities with sixteen or fewer beds shall be eligible to participate in Title XIX only for the provision of inpatient psychiatric services to recipients in accordance with paragraph (F) of this rule:

(1) A hospital with fifty per cent or more of its beds registered as alcohol and/or drug abuse rehabilitation beds that also has beds licensed as psychiatric beds pursuant to Chapter 5122-14 of the Administrative Code;

(2) Hospitals that have at least half of their beds licensed as psychiatric beds pursuant to Chapter 5122-14 of the Administrative Code or operated under the authority of the state mental health authority in accordance with section 5119.01 of the Revised Code; and

(3) Hospitals that have half or more of their discharges in any six-month time period reviewed by the Ohio department of job and family services and determined to be for psychiatric and/or substance abuse treatment.

(F) Hospitals that are eligible to participate only for the provision of inpatient psychiatric services in accordance with paragraph (E) of this rule and are rendering inpatient psychiatric services to recipients must be licensed by the Ohio department of mental health in accordance with Chapter 5122-14 of the Administrative Code or operated under the authority of the state mental health authority in accordance with section 5119.01 of the Revised Code, and must provide services in accordance with Chapter 5122-14 of the Administrative Code. Hospitals shall operate pursuant to the provisions of 42 C.F.R. 482 subpart E.

Effective: 10/16/2006

R.C. 119.032 review dates: 08/01/2006 and 10/01/2011

Promulgated Under: 119.03

Statutory Authority: 5111.02

Rule Amplifies: 5111.01, 5111.02, 5111.021

Prior Effective Dates: 4/7/77, 12/21/77, 6/1/85, 10/1/87, 9/3/91 (Emer),11/10/91, 6/1/95, 8/1/02

(A) The Ohio medicaid program provides payment for medically necessary covered inpatient and outpatient services provided to eligible medicaid recipients by an eligible hospital provider as defined in rule 5101:3-2-01 of the Administrative Code, subject to the provisions of this chapter and Chapter 5101:3-1 of the Administrative Code (relating to general provisions).

(B) The following words and terms, when used in this chapter have the following meanings, unless the context clearly indicates otherwise:

(1) “Inpatient” – A patient who is admitted to a hospital on recommendation of a physician or dentist and whose inpatient stay continues beyond midnight of the day of admission.

(2) “Inpatient services” – Services which are ordinarily furnished in a hospital as defined in rule 5101:3-2-01 of the Administrative Code for the care and treatment of inpatients. Inpatient services include all covered services provided to patients during the course of their inpatient stay, whether furnished directly by the hospital or under arrangement, except for direct-care services provided by physicians, podiatrists, and dentists. Inpatient hospital services exclude direct-care physician services except as provided in rule 5101:3-4-01 of the Administrative Code. Emergency room services are covered as an inpatient service when a patient is admitted from the emergency room.

(3) “Outpatient” – A patient who is not an inpatient as defined in paragraph (B)(1) of this rule and who receives outpatient services at a hospital or at a hospital’s off-site unit which has been extended accreditation by the “Joint Commission of Accreditation of Health Care Organizations,” the “American Osteopathic Association” and/or is certified under medicare. Outpatient includes a patient admitted as an inpatient whose inpatient stay does not extend beyond midnight of the day of admission except in instances when, on the day of admission, a patient dies or is transferred to another inpatient unit within the hospital, to another hospital, or to a state psychiatric facility.

(4) “Outpatient services” – Diagnostic, therapeutic, rehabilitative, or palliative treatment or services furnished by or under the direction of a physician or dentist which are furnished to an outpatient by a hospital as defined in rule 5101:3-2-01 of the Administrative Code. Outpatient services do not include direct-care services provided by physicians, podiatrists and dentists. Outpatient services exclude direct-care physician services except as provided in rule 5101:3-4-01 of the Administrative Code.

(5) “Diagnostic related groups (DRGs)” – DRGs are a patient classification system that reflects clinically cohesive groupings of services that consume similar amounts of hospital resources. The grouping logic used to develop relative weights is described in rule 5101:3-2-07.3 of the Administrative Code. The groupings used to assign cases to a DRG for claims payment are identified in rule 5101:3-2-07.11 of the Administrative Code.

(6) “Average” is the arithmetic mean obtained by dividing a sum by the number of its observations.

(7) “Geometric mean” is the nth root of the product of n factors.

(8) “Psychiatric unit distinct part” is a distinct part recognized by medicare.

(9) “Level I nursery” is a nursery unit within a hospital which is registered with and recognized by the Ohio department of health as a level I nursery.

(10) “Level II nursery” is a nursery unit within a hospital which is registered with and recognized by the Ohio department of health as a level II nursery.

(11) “Level III nursery” is a nursery unit within a hospital that is registered with and recognized by the Ohio department of health as a level III nursery.

(12) “Standard deviation” is the square root of the arithmetic mean of the squares of the deviations from the arithmetic mean.

(13) “Principal diagnosis” is the diagnosis established after study to be chiefly responsible for causing the patient’s admission to the hospital.

(14) “Medically necessary services” are services which are necessary for the diagnosis or treatment of disease, illness, or injury and without which the patient can be expected to suffer prolonged, increased or new morbidity, impairment of function, dysfunction of a body organ or part or significant pain and discomfort. A medically necessary service must:

(a) Meet accepted standards of medical practice;

(b) Be appropriate to the illness or injury for which it is performed as to type of service and expected outcome;

(c) Be appropriate to the intensity of service and level of setting;

(d) Provide unique, essential, and appropriate information when used for diagnostic purposes.

(15) Transfer.

A patient is said to be “transferred” when he or she:

(a) Is moved from one eligible hospital, as described in rule 5101:3-2-01 of the Administrative Code, to another eligible hospital, including state psychiatric facilities.

(b) Is moved from an eligible hospital to the same hospital’s psychiatric unit distinct part.

(c) Is moved to an eligible hospital from the same hospital’s psychiatric unit distinct part.

(16) Readmissions.

For hospitals paid under the department’s prospective payment system, a “readmission” is an admission to the same institution within thirty days of discharge.

(17) Discharges.

A patient is said to be “discharged” when he or she:

(a) Is formally released from a hospital;

(b) Dies while hospitalized;

(c) Is discharged, within the same hospital, from an acute care bed and admitted to a bed in a psychiatric unit distinct part as described in paragraph (B)(8) of this rule or is discharged within the same hospital, from a bed in a psychiatric unit distinct part to an acute care bed. Rule 5101:3-2-07.11 of the Administrative Code explains the payment methodology for this type of a discharge; or

(d) Signs self out against medical advice (AMA).

(18) “Observation services” are those services furnished on a hospital’s premises, including use of a bed and periodic monitoring by a hospital’s nursing or other staff, which are reasonable and necessary to evaluate an outpatient’s condition or determine the need for possible admission to the hospital as an inpatient.

(C) Billing: All inpatient and outpatient hospital services must be billed in accordance with national uniform billing requirements for hospital facilities (available on http://www.nubc.org/). Appendix A of this rule describes revenue codes that are covered under the medicaid hospital benefit.

Appendix A Revenue Codes and Descriptions

IP – Inpatient

OP – Outpatient

C – Covered service

N – Noncovered service

General Category 1st Three Digits 4th Digit Detail Description IP OP

Total Charge 000 1 – Total charge for claim C C

Health Insurance – PPS 002 2 – Skilled Nursing Facility PPS N N

3 – Home Health PPS N N

4 – Inpatient Rehabilitation Facility PPS N N

All Inclusive Rate 010 0 – All-inclusive Room and Board Plus Ancillary C N

1 – All-inclusive Room and Board N N

Room & Board – Private (Medical or General) 011 0 – General Classification C C

1 – Medical/Surgical/Gyn C C

2 – OB C C

3 – Pediatric C C

4 – Psychiatric C C

5 – Hospice N N

6 – Detoxification C C

7 – Oncology C C

8 – Rehabilitation C C

9 – Other C C

Note: See rule 5101:3-2-03 for coverage limitations pertaining to private rooms.

Room & Board – Semiprivate Two Bed (Medical or General) 012 0 – General Classification C C

1 – Medical/Surgical/Gyn C C

2 – OB C C

3 – Pediatric C C

4 – Psychiatric C C

5 – Hospice N N

6 – Detoxification C C

7 – Oncology C C

8 – Rehabilitation C C

9 – Other C C

Room & Board – Semi-Private – Three and Four Beds 013 0 – General Classification C C

1 – Medical/Surgical/Gyn C C

2 – OB C C

3 – Pediatric C C

4 – Psychiatric C C

5 – Hospice N N

6 – Detoxification C C

7 – Oncology C C

8 – Rehabilitation C C

9 – Other C C

Room & Board – Private (Deluxe) 014 0 – General Classification N N

1 – Medical/Surgical/Gyn N N

2 – OB N N

3 – Pediatric N N

4 – Psychiatric N N

5 – Hospice N N

6 – Detoxification N N

7 – Oncology N N

8 – Rehabilitation N N

9 – Other N N

Room & Board – Ward (Medical or General) 015 0 – General Classification C C

1 – Medical/Surgical/Gyn C C

2 – OB C C

3 – Pediatric C C

4 – Psychiatric C C

5 – Hospice N N

6 – Detoxification C C

7 – Oncology C C

8 – Rehabilitation C C

9 – Other C C

Room & Board – Other 016 0 – General Classification C C

4 – Sterile Environment C C

7 – Self Care N N

9 – Other C C

Nursery 017 0 – General Classification C C

1 – Newborn – Level I C C

2 – Newborn – Level II C N

3 – Newborn – Level III C N

4 – Newborn – Level IV C N

9 – Other C C

Note: Subcategory codes 1 through 4 are defined by the National Uniform Billing Committee. Please note that these definitions are different that those recognized by the Ohio Department of Health.

Leave of Absence 018 0 – General Classification N N

2 – Patient Convenience N N

3 – Therapeutic Leave N N

5 – Hospitalization N N

9 – Other Leave of Absence N N

Subacute Care 019 0 – General Classification N N

1 – Subacute Care – Level I N N

2 – Subacute Care – Level II N N

3 – Subacute Care – Level III N N

4 – Subacute Care – Level IV N N

9 – Other Subacute Care N N

Intensive Care 020 0 – General Classification C N

1 – Surgical C N

2 – Medical C N

3 – Pediatric C N

4 – Psychiatric C N

6 – Intermediate ICU C N

7 – Burn Care C N

8 – Trauma C N

9 – Other Intensive Care C N

Coronary Care 021 0 – General Classification C N

1 – Myocardial Infarction C N

2 – Pulmonary Care C N

3 – Heart Transplant C N

4 – Intermediate ICU C N

9 – Other Coronary Care C N

Special Charges 022 0 – General Classification N N

1 – Admission Charge N N

2 – Technical Support Charge N N

3 – U.R. Service Charge N N

4 – Late Discharge, Medically Nec. N N

9 – Other Special Charges N N

Incremental Nursing Charge Rate 023 0 – General Classification C N

1 – Nursery C N

2 – OB C N

3 – ICU C N

4 – CCU C N

5 – Hospice N N

9 – Other C N

All Inclusive Ancillary 024 0 – General Classification C N

1 – Basic C N

2 – Comprehensive C N

3 – Specialty C N

9 – Other All Inclusive Ancillary C N

Pharmacy (Also see 063X, an extension of 025X) 025 0 – General Classification C C

1 – Generic Drugs C C

2 – Non-Generic Drugs C C

3 – Take Home Drugs N N

4 – Drugs Incident to Other Diagnostic Services C C

5 – Drugs Incident to Radiology C C

6 – Experimental Drugs N N

7 – Non-Prescription Drugs C N

8 – IV Solution C C

9 – Other Pharmacy C C

IV Therapy 026 0 – General Classification C C

1 – Infusion Pump C C

2 – IV Therapy/Pharmacy C C

3 – IV Therapy/Drug/Supply/Delivery C C

4 – IV Therapy/Supplies C C

9 – Other IV Therapy C C

Medical/Surgical Supplies and Devices (Also see 062X, and extension of 027X) 027 0 – General Classification C C

1 – Non Sterile Supply C C

2 – Sterile Supply C C

3 – Take Home Supplies N N

4 – Prosthetic/Orthotic Devices C N

5 – Pacemaker C C

6 – Intraocular Lens C C

7 – Oxygen-Take Home N N

8 – Other Implant C C

9 – Other Supplies/Devices C C

Oncology 028 0 – General Classification C C

9 – Other Oncology C C

Durable Medical Equipment (Other than Rental) 029 0 – General Classification N N

1 – Rental C N

2 – Purchase of New DME N N

3 – Purchase of Used DME N N

4 – Supplies/Drugs for DME Effectiveness (HHA only) N N

9 – Other Equipment N N

Laboratory 030 0 – General Classification C C

1 – Chemistry C C

2 – Immunology C C

3 – Renal Patient (home) N N

4 – Non-routine Dialysis C C

5 – Hematology C C

6 – Bacteriology & Microbiology C C

7 – Urology C C

9 – Other Laboratory C C

Laboratory Pathological 031 0 – General Classification C C

1 – Cytology C C

2 – Histology C C

4 – Biopsy C C

9 – Other Laboratory Pathological C C

Radiology – Diagnostic 032 0 – General Classification C C

1 – Angiocardiography C C

2 – Arthrography C C

3 – Arteriography C C

4 – Chest X-ray C C

9 – Other Radiology – Diagnostic C C

Radiology – Therapeutic and/or Chemotherapy Administration 033 0 – General Classification C C

1 – Chemotherapy Administration – Injected C C

2 – Chemotherapy Admin. – Oral C C

3 – Radiation Therapy C C

5 – Chemotherapy Admin. – IV C C

9 – Other Radiology – Therapeutic C C

Nuclear Medicine 034 0 – General Classification C C

1 – Diagnostic Procedures C C

2 – Therapeutic Procedures C C

3 – Diagnostic Radiopharmaceutical C C

4 – Therapeutic Radiopharmaceutical C C

9 – Other C C

CT Scan 035 0 – General Classification C C

1 – Head Scan C C

2 – Body Scan C C

9 – Other CT Scan C C

Operating Room Services 036 0 – General Classification C C

1 – Minor Surgery C C

2 – Organ Transplant-Other Than Kidney C N

7 – Kidney Transplant C N

9 – Other Operating Room Services C C

Anesthesia 037 0 – General Classification C C

1 – Anesthesia Incident to Radiology C C

2 – Anesthesia Incident to Other Diagnostic Services C C

4 – Acupuncture N N

9 – Other Anesthesia C C

Blood 038 0 – General Classification C C

1 – Packed Blood Cells C C

2 – Whole Blood C C

3 – Plasma C C

4 – Platelets C C

5 – Leucocytes C C

6 – Other Components C C

7 – Other Derivatives (Cyropricipitates) C C

9 – Other Blood C C

Blood and Blood Components Administration, Processing & Storage 039 0 – General Classification C C

1 – Administration (Transfusions) C C

9 – Other Processing and Storage C C

Other Imaging Services 040 0 – General Classification C C

1 – Diagnostic Mammography C C

2 – Ultrasound C C

3 – Screening Mammography C C

4 – Positron Emission Tomography C C

9 – Other Imaging Service C C

Respiratory Services 041 0 – General Classification C C

2 – Inhalation Services C C

3 – Hyperbaric Oxygen Therapy C C

9 – Other Respiratory Services C C

Physical Therapy 042 0 – General Classification C C

1 – Visit Charge C C

2 – Hourly Charge C C

3 – Group Rate C C

4 – Evaluation or Re-evaluation C C

9 – Other Physical Therapy C C

Occupational Therapy 043 0 – General Classification C C

1 – Visit Charge C C

2 – Hourly Charge C C

3 – Group Rate C C

4 – Evaluation or Re-evaluation C C

9 – Other Occupational Therapy C C

Speech-Language Pathology 044 0 – General Classification C C

1 – Visit Charge C C

2 – Hourly Charge C C

3 – Group Rate C C

4 – Evaluation or Re-evaluation C C

9 – Other Speech-Language Pathology C C

Emergency Room 045 0 – General Classification C C

1 – EMTALA Emergency Medical Screening Services C C

2 – ER Beyond EMTALA Screening Services C C

6 – Urgent Care C C

9 – Other Emergency Room C C

Pulmonary Function 046 0 – General Classification C C

9 – Other Pulmonary Function C C

Audiology 047 0 – General Classification C C

1 – Diagnostic C C

2 – Treatment C C

9 – Other Audiology C C

Cardiology 048 0 – General Classification C C

1 – Cardiac Cath Lab C C

2 – Stress Test C C

3 – Echocardiography C C

9 – Other Cardiology C C

Ambulatory Surgical Care 049 0 – General Classification C C

9 – Other Ambulatory Surgical Care C C

Outpatient Services 050 0 – General Classification N N

9 – Other Outpatient Service N N

Clinic 051 0 – General Classification C C

1 – Chronic Pain Center C C

2 – Dental Clinic* C C

3 – Psychiatric Clinic C C

4 – OB-GYN Clinic C C

5 – Pediatric Clinic C C

6 – Urgent Care Clinic C C

7 – Family Practice Clinic C C

9 – Other Clinic C C

*Note: See rule 5101:3-2-03 for coverage limitations pertaining to dental services provided in a hospital facility.

Free-Standing Clinic 052 0 – General Classification N N

1 – Rural Health-Clinic N N

2 – Rural Health-Home N N

3 – Family Practice Clinic N N

6 – Urgent Care Clinic N N

9 – Other Freestanding Clinic N N

Osteopathic Services 053 0 – General Classification C C

1 – Osteopathic Therapy C C

9 – Other Osteopathic Services C C

Ambulance 054 0 – General Classification N N

1 – Supplies N N

2 – Medical Transport N N

3 – Heart Mobile N N

4 – Oxygen N N

5 – Air Ambulance N N

6 – Neonatal Ambulance Service N N

7 – Pharmacy N N

8 – Telephone Transmission EKG N N

9 – Other Ambulance N N

Skilled Nursing 055 0 – General Classification N N

1 – Visit Charge N N

2 – Hourly Charge N N

9 – Other Skilled Nursing N N

Medical Social Services 056 0 – General Classification N N

1 – Visit Charge N N

2 – Hourly Charge N N

9 – Other Medical Social Services N N

Home Health – Home Health Aide 057 0 – General Classification N N

1 – Visit Charge N N

2 – Hourly Charge N N

9 – Other Home Health Aide N N

Home Health – Other Visits 058 0 – General Classification N N

1 – Visit Charge N N

2 – Hourly Charge N N

3 – Assessment N N

9 – Other Home Health Visit N N

Home Health – Units of Service 059 0 – General Classification N N

9 – Home Health Other Units N N

Home Health – Oxygen 060 0 – General Classification N N

1 – Oxygen – State/Equip/Suppl/ or Cont N N

2 – Oxygen – State/Equip/Suppl/ under 1 LPM N N

3 – Oxygen – State/Equip/ Over 4 LPM N N

4 – Oxygen – Portable Add-on N N

9 – Other Oxygen N N

Magnetic Resonance Technology (MRT) 061 0 – General Classification C C

1 – MRI – Brain (Including Brainstem) C C

2 – MRI – Spinal Cord (Incl. Spine) C C

4 – MRI – Other C C

5 – MRA – Head and Neck C C

6 – MRA – Lower Extremities C C

8 – MRA – Other C C

9 – Other MRT C C

Medical/Surgical Supplies – Extension of 027X 062 1 – Supplies Incident to Radiology C C

2 – Supplies Incident to Other Diagnostic Services C C

3 – Surgical Dressings C C

4 – FDA Investigational Devices N N

Pharmacy – Extension of 025X 063 1 – Single Source Drug N N

2 – Multiple Source Drug N N

3 – Restrictive Prescription N N

4 – Erythropoietin (EPO) Less Than 10,000 Units C C

5 – Erythropoietin (EPO) 10,000 or More Units C C

6 – Drugs Requiring Detailed Coding N N

7 – Self-administrable Drugs C C

Home IV Therapy Services 064 0 – General Classification N N

1 – Nonroutine Nursing, Central Line N N

2 – IV Site Care, Central Line N N

3 – IV Start/Change, Peripheral Line N N

4 – Nonroutine Nurs., Peripheral Line N N

5 – Training, Patient/Caregiver, Central Line N N

6 – Training, Disabled Patient, Central Line N N

7 – Training, Patient/Caregiver, Peripheral Line N N

8 – Training, Disabled Patient, Peripheral Line N N

9 – Other IV Therapy Services N N

Hospice Service 065 0 – General Classification N N

1 – Routine Home Care N N

2 – Continuous Home Care N N

5 – Inpatient Respite Care N N

6 – General IP Care (Non-respite) N N

7 – Physician Services N N

8 – Hospice Room & Board – Nursing Facility N N

9 – Other Hospice Service N N

Respite Care 066 0 – General Classification N N

1 – Hourly Charge/Nursing N N

2 – Hourly Charge/Aid/Homemaker/Companion N N

3 – Daily Respite Charge N N

9 – Other Respite Charge N N

Outpatient Special Residence Charge 067 0 – General Classification N N

1 – Hospital Based N N

2 – Contracted N N

9 – Other Special Residence Charge N N

Trauma Response (Charge for Trauma Team Activation) 068 1 – Level I N N

2 – Level II N N

3 – Level III N N

4 – Level IV N N

9 – Other Trauma Response N N

Cast Room 070 0 – General Classification C C

9 – Other Cast Room C C

Recovery Room 071 0 – General Classification C C

9 – Other Recovery Room C C

Labor Room/Delivery 072 0 – General Classification C C

1 – Labor C C

2 – Delivery C C

3 – Circumcision C C

4 – Birthing Center C C

9 – Other Labor Room/Delivery C C

EKG/ECG (Electrocardiogram) 073 0 – General Classification C C

1 – Holter Monitor C C

2 – Telemetry C C

9 – Other EKG/ECG C C

EEG (Electroencephalogram) 074 0 – General Classification C C

9 – Other EEG C C

Gastro-Intestinal Services 075 0 – General Classification C C

9 – Other Gastro-Intestinal C C

Treatment/Observation Room 076 0 – General Classification C C

1 – Treatment Room C C

2 – Observation Room C C

9 – Other Treatment/Obs. Room C C

Preventive Care Services 077 0 – General Classification C C

1 – Vaccine Administration C C

9 – Other Preventive Care Services C C

Note: Use if this revenue code is limited to Medicaid eligible persons from birth through age 20 yrs.

Telemedicine 078 0 – General Classification N N

9 – Other Telemedicine N N

Extra-Corporeal Shock Wave Therapy 079 0 – General Classification C C

9 – Other ESWT C C

Inpatient Renal Dialysis 080 0 – General Classification C N

1 – Inpatient Hemodialysis C N

2 – Inpatient Peritoneal (Non-CAPD) C N

3 – Inpatient Continuous Ambulatory Peritoneal Dialysis (CAPD) C N

4 – Inpatient Continuous Cycling Peritoneal Dialysis (CCPD) C N

9 – Other Inpatient Dialysis C N

Acquisition of Body Components 081 0 – General Classification C N

1 – Living Donor C N

2 – Cadaver Donor C N

3 – Unknown Donor N N

4 – Unsuccessful Organ Search Donor Bank Charges N N

9 – Other Donor C N

Note: Acquisition charges eligible for cost-related reimbursement, as described in rule 5101:3-2-22, should be reported using revenue code 0810.

Hemodialysis – Outpatient or Home 082 0 – General Classification N C

1 – Hemodialysis/Composite or Other Rate N C

2 – Home Supplies N N

3 – Home Equipment N N

4 – Maintenance/100% N N

5 – Support Services N N

9 – Other Outpatient Hemodialysis N C

Peritoneal Dialysis – Outpatient or Home 083 0 – General Classification N C

1 – Peritoneal Dialysis/Composite or Other Rate N C

2 – Home Supplies N N

3 – Home Equipment N N

4 – Maintenance/100% N N

5 – Support Services N N

9 – Other OP Peritoneal Dialysis N C

Continuous Ambulatory Peritoneal Dialysis (CAPD) – Outpatient or Home 084 0 – General Classification N C

1 – CAPD/Composite or Other Rate N C

2 – Home Supplies N N

3 – Home Equipment N N

4 – Maintenance 100% N N

5 – Support Services N N

9 – Other Outpatient CAPD N C

Continuous Cycling Peritoneal Dialysis (CCPD) – Outpatient or Home 085 0 – General Classification N C

1 – CCPD/Composite or Other Rate N C

2 – Home Supplies N N

3 – Home Equipment N N

4 – Maintenance 100% N N

5 – Support Services N N

9 – Other Outpatient CCPD N C

Miscellaneous Dialysis 088 0 – General Classification C C

1 – Ultrafiltration C C

2 – Home Dialysis Aid Visit N N

9 – Other Miscellaneous Dialysis C C

Behavioral Health Treatments/Services (Also see 091X, an extension of 090X) 090 0 – General Classification C C

1 – Electroshock Treatment N N

2 – Milieu Therapy N N

3 – Play Therapy N N

4 – Activity Therapy N N

5 – IOP – Psychiatric N N

6 – IOP – Chemical Dependency N N

7 – Day Treatment N N

Behavioral Health Treatments/Services – Extension of 090X 091 1 – Rehabilitation N C

2 – Partial Hospitalization – Less Intensive N N

3 – Partial Hospitalization – Intensive N N

4 – Individual Therapy C C

5 – Group Therapy C C

6 – Family Therapy C C

7 – Bio Feedback N N

8 – Testing C C

9 – Other Behavioral Health Treatment / Services C C

Other Diagnostic Services 092 0 – General Classification C C

1 – Peripheral Vascular Lab C C

2 – Electromyogram C C

3 – Pap Smear C C

4 – Allergy Test C C

5 – Pregnancy Test C C

9 – Other Diagnostic Services C C

Medical Rehabilitation Day Program 093 1 – Half Day N N

2 – Full Day N N

Other Therapeutic Services (Also see 095X, an extension of 094X) 094 0 – General Classification C C

1 – Recreational Therapy N N

2 – Education/Training C C

3 – Cardiac Rehabilitation C C

4 – Drug Rehabilitation N C

5 – Alcohol Rehabilitation N C

6 – Complex Medical Equipment – Routine N N

7 – Complex Medical Equipment – Ancillary N N

9 – Other Therapeutic Service C C

Other Therapeutic Services – Ext. of 094X 095 1 – Athletic Training N N

2 – Kinesiotherapy C C

Professional Fees (Also see 097X and 098X) 096 0 – General Classification N N

1 – Psychiatric N N

2 – Ophthalmology N N

3 – Anesthesiologist (MD) N N

4 – Anesthetist (CRNA) N N

9 – Other Professional Fee N N

Professional Fees (Extension of 096X) 097 1 – Laboratory N N

2 – Radiology – Diagnostic N N

3 – Radiology – Therapeutic N N

4 – Radiology – Nuclear Medicine N N

5 – Operating Room N N

6 – Respiratory Therapy N N

7 – Physical Therapy N N

8 – Occupational Therapy N N

9 – Speech Pathology N N

Patient Convenience Items 098 1 – Emergency Room N N

2 – Outpatient Services N N

3 – Clinic N N

4 – Medical Social Services N N

5 – EKG N N

6 – EEG N N

7 – Hospital Visit N N

8 – Consultation N N

9 – Private Duty Nurse N N

Patient Convenience Items 099 0 – General Classification N N

1 – Cafeteria/Guest Tray N N

2 – Private Linen Service N N

3 – Telephone/Telegraph N N

4 – TV/Radio N N

5 – Nonpatient Room Rentals N N

6 – Late Discharge Charge N N

7 – Admission Kits N N

8 – Beauty Shop/Barber N N

9 – Other Patient Convenience Item N N

Behavioral Health Accommodations 100 0 – General Classification N N

1 – Res.Treatment – Psychiatric N N

2 – Res. Treatment – Chem. Dep. N N

3 – Supervised Living N N

4 – Halfway House N N

5 – Group Home N N

Alternative Therapy Services 210 0 – General Classification N N

1 – Acupuncture N N

2 – Acupressure N N

3 – Massage N N

4 – Reflexology N N

5 – Biofeedback N N

6 – Hypnosis N N

9 – Other Alternative Therapy N N

Adult Care 310 1 – Adult Day Care, Medical and Social – Hourly N N

2 – Adult Day Care, Social – Hourly N N

3 – Adult Day Care, Medical and Social – Daily N N

4 – Adult Day Care, Social – Daily N N

5 – Adult Foster Care – Daily N N

9 – Other Adult Care N N

Effective: 10/01/2005

R.C. 119.032 review dates: 07/15/2005 and 10/01/2010

Promulgated Under: 119.03

Statutory Authority: 5111.02

Rule Amplifies: 5111.01, 5111.02

Prior Effective Dates: 4/7/77, 12/21/77, 12/30/77, 1/8/79, 2/1/80, 10/1/83 (Emer), 12/29/83, 10/1/84, 11/9/84 (Emer), 2/4/85, 7/29/85, 7/3/86, 10/19/87, 4/23/88, 7/1/89, 12/1/89, 7/1/90, 9/3/91 (Emer), 11/10/91, 7/1/92, 7/1/93, 1/20/95, 12/29/95 (Emer), 3/16/96, 8/1/02, 10/1/03, 6/1/04

(A) Conditions and limitations applicable to both inpatient and outpatient hospital services.

(1) Coverage of provider-based physician services reimbursable as an inpatient or outpatient hospital service is limited to those services reimbursable under medicare, part A, except as provided in rule 5101:3-4-04 of the Administrative Code. For information concerning coverage of direct-care physician services provided in a hospital setting, see Chapter 5101:3-4-01 of the Administrative Code.

(2) Inpatient or outpatient services related to the provision of the services described in paragraphs (A)(2)(a) to (A)(2)(i) of this rule are not covered:

(a) Abortions other than those which meet the criteria for coverage set forth in rule 5101:3-17-01 of the Administrative Code.

(b) Sterilizations and hysterectomies other than those which meet the criteria for coverage set forth in rule 5101:3-21-01 of the Administrative Code.

(c) Artificial insemination, treatment of infertility, including procedures for reversal of voluntary sterilization.

(d) Treatment of obesity, including gastroplasty, gastric stapling, or ileo-jejunal shunt.

(e) Plastic or cosmetic surgery when the surgery is performed for aesthetic purposes; for example, rhinoplasty, ear piercing, mammary augmentation or reduction, tattoo removal, excision of keloids, facioplasty, osteoplasty (prognathism and micrognathism), dermabrasion, skin grafts, and lipectomy.

(f) Acupuncture.

(g) Services of a research nature or services which are experimental and not in accordance with customary standards of medical practice or are not commonly used.

(h) Dental procedures unless:

(i) The nature of the surgery or the condition of the patient precludes performing the procedure in the dentist’s office or other nonhospital outpatient setting and the inpatient or outpatient service is a medicaid covered service.

(ii) The service was an emergency dental procedure performed in the emergency room, or precertified as an inpatient admission as described in rule 5101:3-2-40 of the Administrative Code.

(i) Patient convenience items, including television service.

(3) Blood and blood components — The department encourages the use of replacement blood donated on behalf of the recipient. However, the medicaid program will cover the cost of all blood administered, equivalent quantities of packed red blood cells or plasma when not available to the recipient from other sources, and the administering of replacement blood.

(4) Services related to covered organ donations are reimbursable when the recipient of a transplant is medicaid eligible.

(B) Conditions and limitations applicable to inpatient services only.

(1) Accommodations — The medicaid program covers semiprivate accommodations. A private room will be covered only when such accommodations are medically necessary and the patient’s condition requires him to be isolated for his own health or the health of others.

(2) Covered days: In general, medicaid covers only those days of care which are medically necessary or otherwise within certain limits. The provisions set forth in this paragraph operate as limitations in one of two ways. The number of days of care charged by a hospital must be in units of full days. The day of admission counts as a full day. The day of discharge is not counted as a covered day, but charges for any covered services other than those described in revenue center codes 0100 to 0179 (see rule 5101:3-2-02 of the Administrative Code for identification of revenue center codes) are covered. Charges for the services described in the foregoing sentence are covered on the days the services were rendered; not the day the charges were posted. For hospitals identified in rule 5101:3-2-07.1 of the Administrative Code which are paid on a prospective basis, the noncovered days of inpatient stay described in paragraphs (B)(2)(a) to (B)(2)(f) of this rule will be excluded for purposes of determining outliers in accordance with rule 5101:3-2-07.9 of the Administrative Code. For hospitals excluded from the prospective payment system as identified in rule 5101:3-2-07.1 of the Administrative Code, the noncovered days of inpatient stay described in paragraphs (B)(2)(a) to (B)(2)(f) of this rule, including associated inpatient services, are not covered and, accordingly, are not reimbursable.

(a) Rehabilitation services related to chemical dependencies: Coverage of inpatient days for treatment of a chemical dependency is limited to coverage of services for detoxification. No coverage is available for days of inpatient care which occur solely for the provision of rehabilitation services related to a chemical dependency.

(b) Benefit period — The number of days of inpatient care covered under the medicaid program shall not exceed thirty days during a period beginning on the day of the recipient’s admission to a hospital and ending sixty days after the termination of that hospital stay, whether or not completed in the same hospital. However, the department will make exceptions to this limitation, when:

(i) The recipient is jointly eligible under the medicaid program and the program for medically handicapped children as described in section 3701.023 of the Revised Code.

(ii) Additional hospitalization is medically necessary before sixty days have passed since the most recent discharge date.

(iii) A determination is made by the hospital that the care was medically necessary in accordance with rule 5101:3-2-07.13 of the Administrative Code.

(iv) The hospital is paid on a prospective DRG basis.

(v) The hospital is recognized as a long-term care hospital under medicare.

(c) Late discharge — The medicaid program will not pay for a patient’s continued stay beyond the checkout time because of personal reasons on the part of the patient and/or physician’s negligence.

(d) Leave of absence — The day on which a patient begins a leave of absence cannot be counted as a covered day unless the patient returns to the hospital prior to midnight of the same day.

(e) Days waiting for placement and custodial care — Coverage is not available for hospital inpatient services for patients who no longer require acute short-term hospital care. This includes days waiting for transfer to a long-term care facility, days of inpatient care due to unnecessary delays in applying for court-ordered commitment, grace periods, administrative days, and custodial care. For purposes of this rule, “custodial care” is defined as maintenance, rather than curative care, on an indefinite basis, while grace periods and administrative days relate to days of care while waiting for placement elsewhere. This exclusion also applies to days spent as an inpatient at a transferring hospital on or after the effective date of a court commitment to another facility and inpatient days resulting from a hospital’s failure to timely request or perform necessary diagnostic studies, medical-surgical procedures, or consultations.

(f) Psychiatric admissions to hospitals not licensed by the department of mental health — Admissions of persons whose principal diagnosis is a mental disorder as described in Chapter 5122-14 of the Administrative Code into hospitals not licensed by the department of mental health will not be reimbursed by the medicaid program.

(C) Coverage conditions and limitations applicable to outpatient services only.

(1) When recipients use greater than forty-eight outpatient visits per year, information from paid claims will be reviewed by the department to determine whether the recipient should be referred to a managed care program. As a result of this review, the department or its contractual designee may also review hospital medical records in accordance with rule 5101:3-2-07.13 of the Administrative Code to determine whether services were medically necessary and appropriate to the recipient’s illness or injury as described in rule 5101:3-2-02 of the Administrative Code.

(2) For purposes of paragraph (C)(1) of this rule, a visit is defined as services provided on one date of service to one recipient.

(D) Coverage conditions and limitations applicable to hospitals eligible to provide services pursuant to paragraphs (C) , (D) and (F) of rule 5101:3-2-01 of the Administrative Code.

(1) Coverage of inpatient services provided in hospitals to eligible recipients shall be provided in accordance with Chapter 5122-14 of the Administrative Code or section 5119.20 of the Revised Code.

(2) Outpatient services provided in hospitals to eligible recipients are not coverable under the provisions set forth in Chapter 5101:3-2 of the Administrative Code.

HISTORY: Eff 4-7-77; 12-21-77; 12-30-77; 1-8-79; 2-1-80; 7-1-82; 10-1-83 (Emer.); 12-29-83; 10-1-84; 7-3-86; 11-1-86; 4-6-88 (Emer.); 6-24-88; 7-1-90; 7-1-92; 6-1-95; 8-1-02; 10-1-03

Rule promulgated under: RC 119.03

Rule authorized by: RC 5111.02

Rule amplifies: RC 5111.01, 5111.02

R.C. 119.032 review dates: 07/10/2003 and 10/01/2008

(A) Drugs.

(1) Drugs are classified as: administered inpatient (drugs administered to a patient while an inpatient); administered outpatient (drugs administered to a patient at the hospital in connection with outpatient services); take home (drugs dispensed on an outpatient basis for use away from the hospital).

(2) Administered inpatient drugs are considered inpatient services and are reimbursed as an inpatient service. Administered outpatient drugs are considered outpatient services and are reimbursed as an outpatient hospital service in accordance with rule 5101:3-2-21 of the Administrative Code. Take-home drugs must be billed in accordance with provisions in Chapter 5101:3-9 of the Administrative Code. Payment to hospitals for take-home drugs will be reimbursed according to the provisions of Chapter 5101:3-9 of the Administrative Code. ODJFS may periodically require hospitals to produce evidence of invoice costs supporting amounts billed for take-home drugs.

(B) Medical supplies and equipment.

(1) Inpatient: Supplies and equipment for the care and treatment of the recipient during an inpatient stay, including implants and devices that are part of a surgical, immediate post surgical, or early fitting procedure (e.g., pacemakers, halos, and prosthetic devices), appliances that are generally applied prior to discharge (e.g., initial prostheses), and other items that are medically necessary as described in rule 5101:3-2-02 of the Administrative Code to permit or facilitate the patient’s discharge from the hospital until such time as the recipient can obtain a permanent item or supply are covered inpatient hospital services and, as such, must be included in the hospital’s inpatient billing. In order to be reimbursed for supplies and equipment furnished to an inpatient for use solely outside the hospital, the hospital must be approved under the medicaid program as a medical supplies provider. See Chapter 5101:3-10 of the Administrative Code for coverage, limitation, billing, and reimbursement provisions relative to medical supplies providers.

(2) Outpatient: In order to be reimbursed for medical supplies and equipment on an outpatient basis, a hospital must be approved under the medicaid program as a medical supplies provider. Hospital outpatient departments that so desire may make application to provider enrollment. See Chapter 5101:3-10 of the Administrative Code for coverage, limitation, billing, and reimbursement provisions relative to medical supplies providers.

(C) Dental services: Except for dental services described in rule 5101:3-2-03 of the Administrative Code and emergency dental services provided in the emergency room, all outpatient dental services are covered and reimbursed as dental services under the provisions set forth in Chapter 5101:3-5 of the Administrative Code.

(D) Vision care services: All vision care services are covered and reimbursed as inpatient or outpatient hospital services. All vision care materials are covered and reimbursed in accordance with the provisions of Chapter 5101:3-6 of the Administrative Code.

(E) Ambulance and ambulette services: The services of hospital staff as attendents during transportation are covered and reimbursed as an inpatient or outpatient hospital service. Services related to the use and operation of the transport vehicle, including standard equipment and driver, are reimbursed as an ambulance or ambulette service. The provisions of this paragraph apply to ambulance and ambulette services provided to or from the hospital, including interhospital ambulance or ambulette services. See Chapter 5101:3-15 of the Administrative Code for coverage, limitation, billing, and reimbursement provisions relative to ambulance and ambulette services providers.

Effective: 11/01/2007

R.C. 119.032 review dates: 08/15/2007 and 11/01/2012

Promulgated Under: 119.03

Statutory Authority: 5111.02

Rule Amplifies: 5111.01, 5111.02, 5111.021

Prior Effective Dates: 4/7/77, 12/21/77, 12/30/77, 1/8/79, 2/1/80, 10/1/83 (Emer), 12/29/83, 10/1/84, 9/3/91 (Emer), 11/10/91, 8/1/02

All inpatient services associated with admissions occurring on and after October 1, 1984, and furnished by hospitals defined as eligible providers of hospital services in rule 5101:3-2-01 of the Administrative Code, are subject to the DRG prospective payment system described in this chapter except for services described in paragraphs (A) and (B) of this rule.

(A) Services provided by the following institutions:

(1) “Freestanding rehabilitation hospitals” which the department of health and human services has determined to be excluded from medicare prospective payment in accordance with 42 CFR 412.23(b) effective October 1,2003;

(2) “Freestanding long-term hospitals” which the department of health and human services has determined to be excluded from medicare prospective payment in accordance with 42 CFR 412.23(e) effective October 1, 2003;

(3) Hospitals that are excluded from medicare prospective payment due to providing services, in total, which are excluded due to a combination of the provisions of paragraphs (A)(1) and (A)(2) of this rule;

(4) Ohio hospitals which are owned and operated by health insuring corporations licensed by the Ohio department of insurance and which limit services to medicaid recipients (either to recipients enrolled in a health insuring corporation or to short-term services provided on an emergency basis).

(5) Cancer hospitals as defined in rule 5101:3-2-07.2 of the Administrative Code for discharges on and after July 1, 1992.

(B) Transplant services are subject to the DRG prospective payment system with the

following exceptions, as listed in paragraphs (B)(1) to (B)(3) of this rule.

(1) Heart/lung and pancreas transplantation services provided by eligible medicaid providers to eligible medicaid recipients;

(2) Single/double lung transplantation services by eligible medicaid providers to eligible medicaid recipients who are discharged on or after January 1, 1991 and prior to February 1, 2000.

(3) Liver/small bowel transplantation services for eligible medicaid providers to eligible medicaid recipients.

(4) Reimbursement for all organ transplant services, except for kidney transplants, is contingent upon review and recommendation by the “Ohio Solid Organ Transplant Consortium” based on criteria established by Ohio organ transplant surgeons and authorization from the department’s prior authorization unit.

(5) Reimbursement for bone marrow transplant and hematapoietic stem cell transplant, as defined in rule 3701-84-01 of the Administrative Code, is contingent upon review and the recommendation by the “Ohio Hematopoietic Stem Cell Transplant Consortium,” based on criteria established by Ohio experts in the field of bone marrow transplant and authorization from the department’s prior authorization unit. Authorization is contingent upon the transplant program’s approval by the Ohio department of health or a letter of nonreview ability from the Ohio department of health, or having had a bone marrow transplant program in operation prior to April 2, 1992. Reimbursement is further contingent upon:

(a) Membership in the “Ohio Hematopoietic Stem Cell Transplant Consortium”; or

(b) Compliance with the performance standards described in rules 3701-84-24 to 3701-84-29 of the Administrative Code, and the performance of ten autologous or ten allogeneic bone marrow transplants, dependent on which volume criteria is appropriate for the transplant requested.

HISTORY: Eff 10-1-84; 7-29-85; 7-3-86; 10-19-87; 7-1-89; 1-1-91; 9-3-91 (Emer.); 11-10-91; 7-1-92; 4-1-93; 8-1-93; 2-1-00; 8-1-02; 6-1-04

Rule promulgated under: RC 119.03

Rule authorized by: RC 5111.02

Rule amplifies: RC 5111.01, 5111.02

R.C. 119.032 review dates: 03/12/2004 and 06/01/2009

For purposes of setting rates and making payments under the “Diagnosis Related Group” (DRG) prospective payment system, the department classifies most hospitals into mutually exclusive peer groups.

(A) Definitions.

(1) “Teaching hospitals” are hospitals with major teaching emphasis that meet one of the following definitions: the hospital, regardless of number of beds has an intern- and resident-to-bed ratio of at least .35 or the hospital has greater than five hundred beds and has an intern- and resident-to-bed ratio of .25. For purposes of this paragraph, the intern- and resident-to-bed ratio for Ohio hospitals is that recognized by the hospital’s medicare fiscal intermediary for the hospital’s cost-reporting period described in paragraph (D) of rule 5101:3-2-07.4 of the Administrative Code. For non-Ohio hospitals, the internand resident-to-bed ratio used to make this determination is derived from the medicare cost report for the cost-reporting period used in setting rates for rate period beginning July 1, 1990.

(2) “Children’s hospitals” are those hospitals that primarily serve patients eighteen years of age and younger and that are excluded from medicare prospective payment in accordance with 42 C.F.R. 412.23(d) effective October 1, 2006.

(3) “Rural referral center hospitals” are those hospitals located in non-metropolitan statistical areas (MSAs) that are recognized by medicare as rural referral centers in accordance with 42 C.F.R. 412.96 effective October 1, 2006.

(4) “MSA hospitals” are those hospitals not defined in this rule as children’s or teaching hospitals that are located in MSAs as those areas are established by the federal office of management and budget.

(5) “Non-MSA hospitals” are those hospitals not defined in this rule as teaching, children’s, or rural referral centers that are not located in MSAs as those areas are established by the federal office of management and budget.

(6) “Cancer hospitals” are hospitals recognized by medicare that primarily treat neoplastic disease in accordance with 42 C.F.R. 412.23(f) effective October 1, 2006.

(7) For the purposes of this rule, the “number of beds” is the total number of beds reported in the December, 1986 “Directory of Registered Hospitals” published by the Ohio department of health.

(B) Ohio hospital prospective payment peer groups.

(1) For each Ohio children’s hospital, a prospective rate will be determined in accordance with rule 5101:3-2-07.4 of the Administrative Code using data specific to each hospital.

(2) Rural referral center hospitals are grouped together and a peer group average cost per discharge is developed in accordance with rule 5101:3-2-07.4 of the Administrative Code using data from these hospitals.

(3) Teaching hospitals are grouped together and a peer group average cost per discharge is developed in accordance with rule 5101:3-2-07.4 of the Administrative Code using data from these hospitals.

(4) Non-MSA hospitals with less than one hundred beds are grouped together and a peer group average cost per discharge is developed in accordance with rule 5101:3-2-07.4 of the Administrative Code using data from these hospitals.

(5) Non-MSA hospitals with one hundred beds or more are grouped together and a peer group average cost per discharge is developed in accordance with rule 5101:3-2-07.4 of the Administrative Code using data from these hospitals.

(6) MSA hospitals are peer grouped on the basis of wage index categories. MSA hospitals that have adjusted gross wage index categories in their area, as published in the March 1985 “Report on Hospital Wage Index” required by section 2316(a) of Public Law 98-369 within .01 (rounded values) of each other are grouped together for payment purposes. For each of the groups formed, a peer group average cost per discharge is developed in accordance with rule 5101:3-2-07.4 of the Administrative Code using data from hospitals in the group.

(C) Non-Ohio prospective payment peer groups.

(1) For discharges on or after July 1, 1990, non-Ohio teaching hospitals will be reimbursed on the basis of a rate developed using data from Ohio teaching hospitals. The calculations used to develop this rate are described in paragraphs (C)(1)(a) to (C)(1)(b) of this rule.

(a) For each Ohio teaching hospital a fully adjusted, inflated peer group average cost per discharge is calculated as described in paragraphs (D) to (G)(3)(a) of rule 5101:3-2-07.4 of the Administrative Code except that the adjustment described in paragraphs (D)(9) to (D)(9)(b) of rule 5101:3-2-07.4 of the Administrative Code is not made.

(b) The fully adjusted, inflated peer group average cost per discharge described in paragraph (C)(1)(a) of this rule is multiplied by each hospital’s medicaid discharges as described in paragraph (D)(11)(a) of rule 5101:3-2-07.4 of the Administrative Code. The results of these computations are summed for all Ohio teaching hospitals, and then divided by the sum of medicaid discharges for all Ohio teaching hospitals. The result of this computation is rounded to the nearest whole penny.

(2) For discharges on or after July 1, 1990, non-Ohio children’s hospitals will be reimbursed on the basis of a rate developed using data from Ohio childrens hospitals. The calculations used to develop this rate are described in paragraphs (C)(2)(a) to (C)(2)(b) of this rule.

(a) For each Ohio children’s hospital a fully adjusted, inflated peer group average cost per discharge is calculated as described in paragraphs (D) to (G)(3)(b) of rule 5101:3-2-07.4 of the Administrative Code except that the adjustment described in paragraphs (D)(9) to (D)(9)(b) of rule 5101:3-2-07.4 of the Administrative Code is not made and except that the value of .12 is substituted for the value calculated in paragraph (F)(2)(e)(ii) of rule 5101:3-2-07.4 of the Administrative Code.

(b) The fully adjusted, inflated peer group average cost per discharge described in paragraph (C)(2)(a) of this rule is multiplied by each hospital’s medicaid discharges as described in paragraph (D)(11)(a) of rule 5101:3-2-07.4 of the Administrative Code. The results of these computations are summed for all Ohio children’s hospitals, and then divided by the sum of medicaid discharges for all Ohio children’s hospitals. The result of this computation is rounded to the nearest whole penny.

(3) For discharges on or after July 1, 1990, non-Ohio hospitals that are not teaching or children’s hospitals will be reimbursed on the basis of a rate developed using data from Ohio nonteaching and nonchildren’s hospitals. The calculations used to develop this rate are described in paragraphs (C)(3)(a) to (C)(3)(b) of this rule.

(a) For each Ohio nonchildren’s and nonteaching hospital, a fully adjusted, inflated peer group average cost per discharge is calculated as described in paragraphs (D) to (G)(3)(a) of rule 5101:3-2-07.4 of the Administrative Code except that the adjustment described in paragraphs (D)(9) to (D)(9)(b) of rule 5101:3-2-07.4 of the Administrative Code is not made.

(b) The fully adjusted, inflated peer group average cost per discharge described in paragraph (C)(3)(a) of this rule is multiplied by each hospital’s medicaid discharges as described in paragraph (D)(11)(a) of rule 5101:3-2-07.4 of the Administrative Code. The results of these computations are summed for all Ohio nonteaching and nonchildrens hospitals, and then divided by the sum of medicaid discharges for all Ohio nonteaching and nonchildrens hospitals. The result of this computation is rounded to the nearest whole penny.

(D) Classification procedures.

(1) A hospital is classified into a peer group at the beginning of each rate year based upon the data available to the department sixty days prior to the rate year. Once established, the classification of a hospital into a peer group remains in effect throughout the rate year unless the hospital is designated by medicare during the rate year to be a rural referral center hospital. In this instance the hospital must submit all documentation to the department that it has been designated as a rural referral center. After such documentation is received, the hospital will be reclassified into the rural referral center peer group effective for discharges occurring on or after the beginning of the rate year or the effective date of the designation, whichever is later.

(2) When an existing hospital is deleted or added to a peer group at a time other than when the department rebases the DRG system, the deletion or addition of a hospital from a peer group does not result in a redetermination of payment rates for the peer group except as otherwise provided in rule 5101:3-2-07.8 of the Administrative Code. If a new hospital is established at a time other than when the department rebases the DRG system, the department will assign that hospital to a peer group for payment purposes but will not recalculate any part of the prospective payment rate for that peer group.

(3) Facilities that close at a time other than rebasing of the DRG system and that notify the department of closure thirty days prior to the beginning of a rate year are not included in the peer groups defined in this rule for the purpose of setting payment rates. Closure notifications received less than thirty days prior to a rate year do not result in a redetermination of peer group payment rates for that year.

(4) In the case of hospital mergers when all facilities involved in the merger retain separate provider numbers for the medicare program, each facility will be treated separately following the procedures outlined in this rule. In the case of hospital mergers when the merged facility retains only one medicare provider number, the department will either follow the determinations made by the medicare program with regard to treatment of the merged facilities or will make a separate determination. Such separate determinations will be made, on a case by case basis, in instances when medicare’s determination would be appropriate in the context of medicare pricing and classification methods but inappropriate in the context of medicaid pricing methods and peer grouping logic as described in this rule.

Effective: 12/22/2007

R.C. 119.032 review dates: 09/26/2007 and 12/01/2012

Promulgated Under: 119.03

Statutory Authority: 5111.02

Rule Amplifies: 5111.01, 5111.02, 5111.021

Prior Effective Dates: 10/4/84, 7/29/85, 7/3/86, 10/19/87, 7/1/90, 9/3/91 (Emer), 11/10/91, 7/1/92, 8/1/02

(A) General description.

For hospitals subject to prospective payment for inpatient services, the Ohio department of job and family services, (“ODJFS”) will reimburse for inpatient hospital services an amount per discharge in each diagnostic category. The payment is reflective of the relative hospital resources used by each diagnostic category in comparison to the statewide average resource use for an admission. The method for determining the weight of a diagnostic category is based on its average charge compared to an average charge for all discharges. This rule describes the diagnostic categories and the method for determining the relative weights for each category. Special consideration is given to psychiatric diagnostic related groups (DRGs) 425 to 435 and neonatal DRGs 385 to 390 as described in this rule.

(B) Diagnostic related groupings.

(1) Except as otherwise specified in paragraph (E) of this rule, relative weights are calculated for each classification of inpatient hospital discharge classified by “grouper,” a software package distributed by, “3M Health Information Systems”, used by medicare during federal fiscal year 1998, and modified as described in this rule. Services are classified into one of the diagnostic categories based on:

(a) The International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM), principal and secondary diagnoses;

(b) The ICD-9-CM surgical procedures provided to the recipient during a hospital stay;

(c) The recipient’s sex;

(d) The recipient’s age; and

(e) The recipient’s discharge status.

(2) Cases which would be classified in DRG 385 or DRG 456 because of a transfer or death but which involve a length of stay greater than fifteen days are classified in the DRG which is appropriate in accordance with paragraphs (B)(1) to (B)(1)(e) of this rule if the transfer or death is not considered.

(3) For cases classified into DRG 386, three subgroups are identified and three different relative weights are calculated, based upon the ICD-9-CM codes and the level of the neonatal nursery. These levels are those recognized by the Ohio department of health as of March 29, 1987.

(a) One subgroup and relative weight is created based upon cases which have ICD-9-CM code 765.0 listed as one of its diagnoses.

(b) For cases which group as a DRG 386, and do not have ICD-9-CM code 765.0, two relative weights are calculated for this subgroup. One relative weight is calculated using data specific to hospitals with a level I or II nursery and a second relative weight is calculated using data specific to hospitals with a level III nursery.

(4) For cases classified into DRG 387, four subgroups are identified and four different relative weights are calculated, based upon the infant’s birthweight and the level of the neonatal nursery. These levels are those identified by the Ohio department of health as of March 29, 1987. These subgroups are described in paragraphs (B)(4)(a) and (B)(4)(b) of this rule.

(a) For cases which group into DRG 387 and have a birthweight of zero to one thousand seven hundred fifty grams, two subgroups are identified and two relative weights are calculated within each subgroup. One relative weight is calculated using data specific to hospitals with a level I or II nursery and a second relative weight is calculated using data specific to hospitals with a level III nursery.

(b) For cases which group into DRG 387 and have a birthweight of one thousand seven hundred fifty-one grams and above, two subgroups are identified and two relative weights are calculated within each subgroup. One relative weight is calculated using data specific to hospitals with a level I or II nursery and a second relative weight is calculated using data specific to hospitals with a level III nursery.

(C) Medicaid claim record.

For the purposes of determining the relative weight for each diagnostic category DRG, the sample includes all claims associated with discharges, as described in paragraphs (C)(1) and (C)(2) of this rule.

(1) Effective for discharges on January 1, 2006 through June 30, 2008: For the purposes of determining the relative weight for each DRG, the sample includes all claims associated with discharges on or after July 1, 2001 through June 30, 2003 and paid by December 31, 2003. Effective for discharges from July 1, 2008 through December 31, 2009: For the purposes of determining the relative weight for each DRG, the sample includes all claims associated with discharges on or after January 1, 2006 through December 31, 2006 and paid by June 30, 2007. All claims included in the sample were previously paid and passed through the edits created by the department’s prospective payment system. Claims were adjusted as described in paragraphs (C)(3) to (C)(4)(b) of this rule.

(2) Effective for discharges occurring during calendar year 2010, and every calendar year thereafter, relative weights shall be determined on an annual basis. For the purposes of determining the relative weight for each DRG, the sample includes all claims associated with discharges during the state fiscal year ending in the calendar year preceding the immediate past calendar year prior to January 1st of the calendar year to which the new relative weights shall apply. All claims included in the sample were previously paid and passed through the edits created by the department’s prospective payment system. Claims were adjusted as described in paragraphs (C)(3) to (C)(4)(b) of this rule.

(3) Claims deleted from computation.

(a) Claims that were submitted by an out-of-state provider.

(b) Claims that were submitted by hospitals excluded from the prospective payment system as described in rule 5101:3-2-07.1 of the Administrative Code.

(c) Claims that were originally grouped into DRG 000, 469 or 470.

(d) When two or more records existed with the same provider, same recipient number, and exact dates of services, the latest paid claim was retained and the earlier paid claim or claims were deleted.

(e) If multiple claims for the same provider, same recipient number, and overlapping dates of service occurred, and the date span of the most recently paid claim included the date span of any and all overlap claims, and none of the claims grouped into DRGs 425 to 435, the most recently paid claim was retained and all others were deleted.

(f) Claims associated with cases that were incorrectly billed to ODJFS, e.g., where third party covered the entire stay.

(g) Claims that were for an inpatient discharge but had charges of less than one hundred dollars, unless there were ten or fewer claims that grouped into the DRG.

(h) Transfer claims unless there were ten or fewer claims that grouped into the DRG.

(i) Nontransfer claims paid on a per diem basis.

(j) Claims with net charges equal to zero.

(4) Adjustments to claims.

(a) Claim-specific adjustments were included if processed by the Ohio department of job and family services on or before the last day of the medicaid claim record period as described in paragraphs (C)(1) and (C)(2) of this rule.

(b) Organ acquisition and transportation costs for heart, liver, and bone marrow transplants were removed from the claim prior to submission to the grouper.

(D) Development of the relative weights. The relative weights were calculated based upon the total allowable charge for each case for the sample of claims as described in paragraphs (C) to (C)(4)(b) of this rule, subject to the edits as described in paragraphs (D)(3)(a) and (D)(3)(b) of this rule.

(1) Computation of the geometric mean charge for each DRG.

(a) For DRGs 1 to 385, 391 to 424, and 439 to 503, the geometric mean charge was determined for each of these DRGs.

(b) For each subgroup in DRG 386 as described in paragraphs (B)(3) to (B)(3)(b) of this rule, and for each subgroup of DRG 387 as described in paragraphs (B)(4) to (B)(4)(b) of this rule, the geometric mean charge was calculated.

(c) For DRGs 388, 389, and 390, the geometric mean charge was calculated three times to determine a geometric mean charge specific to hospitals with a level I nursery, hospitals with a level II nursery, and hospitals with a level III nursery. For example, three geometric mean charges were calculated for DRG 388, one reflecting data from hospitals with a level I nursery; one reflecting data from hospitals with a level II nursery; and one reflecting data from hospitals with a level III nursery.

(d) For DRGs 425 to 435, two geometric mean charges were calculated for each DRG in this category. One geometric mean charge was calculated using the charge for each case within these DRGs from hospitals which have a psychiatric unit distinct part. A “psychiatric unit distinct part” is one which is recognized and excluded from the prospective payment system under medicare as described in rule 5101:3-2-02 of the Administrative Code and where the hospital has notified the department of medicare’s certification and the change was implemented in the system prior to December 31, 2003. A second geometric mean charge was calculated for each DRG 425 to 435 using data from all other hospitals (hospitals which do not have a recognized psychiatric unit distinct part under medicare). In accordance with rule 5101:3-2-03 of the Administrative Code, the department does not pay for DRG 436 and DRG 437.

(e) If no cases were grouped by the medicare fiscal year 1998 grouper into any DRG, the geometric mean charge for these DRGs is the geometric mean charge that was used for these DRGs prior to the effective date of this rule.

(2) Calculation of the statewide geometric mean length of stay for each DRG.

(a) For DRGs 1 to 385, 391 to 424, and 439 to 503, the geometric mean length of stay was calculated using all cases within each of these DRGs as determined in paragraph (C) of this rule.

(b) For each subgroup in DRG 386 as described in paragraphs (B)(3) to (B)(3)(b) of this rule and for each subgroup of DRG 387 as described in paragraphs (B)(4) to (B)(4)(b) of this rule, the geometric mean length of stay was calculated.

(c) For DRGs 388, 389, and 390, the geometric mean length of stay was calculated three times to determine geometric mean length of stay specific to hospitals with a level I nursery, hospitals with a level II nursery, and hospitals with a level III nursery. For example, three geometric mean lengths of stay were calculated for DRG 388; one geometric mean length of stay was calculated using all cases in DRG 388 within a hospital which has a level I nursery; one geometric mean length of stay was calculated based on data from hospitals with a level II nursery; and one geometric mean length of stay was calculated based on data from hospitals with a level III nursery.

(d) For DRGs 425 to 435, the geometric mean length of stay was calculated two times for each of these DRGs to reflect the difference in the geometric mean length of stay in hospitals with and without psychiatric unit distinct parts. To determine the geometric mean length of stay for cases treated in hospitals with no distinct part psychiatric unit, the geometric mean length of stay was calculated using all cases in these hospitals. To determine the geometric mean length of stay for cases in hospitals with psychiatric unit distinct parts, the geometric mean length of stay was calculated using all cases in these hospitals.

(e) If no cases were grouped by the medicare fiscal year 1998 grouper into any DRG, the geometric mean length of stay for these DRGs is the geometric mean length of stay that was used for these DRGs prior to the effective date of this rule.

(3) Deletion of outlier cases.

(a) For each DRG and each subgroup within DRGs 386 to 390 and 425 to 435, a standard deviation for charge and length of stay was calculated based upon the cases used in the calculation of the geometric mean as described in paragraphs (D)(1) to (D)(2)(d) of this rule.

(b) Cases which had charges or reflected a length of stay that was two standard deviations above the geometric mean as calculated in paragraphs (D)(1) to (D)(2)(d) of this rule were deleted except for DRGs 385 to 390. For DRGs 385 to 390 cases which had charges or reflected a length of stay that is one standard deviation above the geometric mean as calculated in paragraphs (D)(1) to (D)(2)(d) of this rule were deleted.

(4) Recalculation of geometric mean length of stay and geometric mean charge for each DRG and subgroups in DRGs 386 to 390 and 425 to 435 was done excluding outlier cases as described in paragraphs (D)(3)(a) and (D)(3)(b) of this rule.

(5) Computation of the arithmetic mean charge for each DRG. Computation of the arithmetic mean charge for each DRG and subgroups was calculated using all cases as described in paragraphs (C)(1) to (C)(2)(4)(b) of this rule, excluding outlier cases, as described in paragraphs (D)(3)(a) and (D)(3)(b) of this rule.

(a) For DRGs 1 to 385, 391 to 424, and 439 to 503, the arithmetic mean charge was determined for each of these DRGs using the total charge per case for each DRG for all hospitals excluding outlier cases.

(b) For each subgroup in DRG 386 as described in paragraphs (B)(3) to (B)(3)(b) of this rule, and for each subgroup of DRG 387 as described in paragraphs (B)(4) to (B)(4)(b) of this rule, the arithmetic mean charge was determined excluding outlier cases.

(c) For DRGs 388, 389, and 390, three separate arithmetic means were calculated for each DRG using data specific to either hospitals with a level I nursery, with a level II nursery, or hospitals with a level III nursery unit. In each instance, the claims used within a DRG, and within a specific level nursery, excluded outlier cases.

(d) For DRGs 425 to 435, two arithmetic mean charges were calculated for each DRG in this category. One arithmetic mean charge was calculated using the total charge for each case within these DRGs, excluding outlier cases, from hospitals which had a psychiatric unit distinct part. A second arithmetic mean charge was calculated for DRGs 425 to 435 using data, excluding outlier cases, from all other hospitals (hospitals which did not have a recognized psychiatric unit distinct part under medicare).

(e) If no cases were grouped by the medicare fiscal year 1998 grouper into any DRG, the arithmetic mean charge for these DRGs is the arithmetic mean charge that was used for these DRGs prior to the effective date of this rule.

(6) Calculation of the statewide arithmetic mean charge per discharge. The statewide arithmetic mean charge per discharge was calculated using the total allowable charge for all cases used in the calculation described in paragraphs (D)(5) to (D)(5)(d) of this rule.

(7) Computation of the relative weight for each DRG and DRG subgroups. The relative weight of each DRG is a function of the relationship between the arithmetic mean charge per DRG and DRG subgroups and the arithmetic mean charge across all cases. To determine the relative weight, the arithmetic mean charge for each DRG and DRG subgroup calculated as described in paragraphs (D)(5)(a) to (D)(5)(d) of this rule was divided by the statewide arithmetic mean charge per discharge as described in paragraph (D)(6) of this rule.

(E) Relative weights for small cell DRGs. When ten or less claims grouped into a DRG, the department established relative weights taking into consideration the weights that previously were used for the DRG, as well as the DRG case mix. When ten or less claims grouped into a new DRG, the department used relative weights currently used by medicare.

Effective: 03/12/2007

R.C. 119.032 review dates: 10/01/2010

Promulgated Under: 119.03

Statutory Authority: 5111.02

Rule Amplifies: 5111.01, 5111.02, 5111.021

Prior Effective Dates: 10/4/84, 7/3/86, 10/19/87, 9/3/91 (Emer), 11/10/91, 1/20/95, 1/1/98, 2/1/00, 10/13/05

(A) General description.

Except as provided in paragraph (B) of this rule, in computing the payment rate, the average cost per discharge determined and adjusted as described in paragraphs (D) to (G)(3)(b) of this rule is multiplied by the relative weight as described in rule 5101:3-2-07.3 of the Administrative Code for the diagnosis related group (DRG) as defined in rule 5101:3-2-02 of the Administrative Code. Applicable allowances for capital and medical education, as described in this rule, are added after the average cost per discharge component is multiplied by the relative weight. The components of the prospective payment rates for each recipient discharged from a hospital are:

(1) The DRG assigned to that discharge;

(2) The adjusted inflated average cost per discharge component described in paragraphs (D) to (G)(3)(b) of this rule;

(3) Relative weights defined in rule 5101:3-2-07.3 of the Administrative Code for each DRG;

(4) An allowance for capital described in rule 5101:3-2-07.6 of the Administrative Code; and

(5) For certain hospitals, a medical education allowance as described in rule 5101:3-2-07.7 of the Administrative Code.

(B) Payment rates.

Payment rates consist of the components described in paragraphs (A) to (A)(5) of this rule, subject to special payment provisions for certain types of cases, as described in rules 5101:3-2-07.9 and 5101:3-2-07.11 of the Administrative Code.

(C) Determination of average cost per discharge component.

(1) For children’s hospitals as defined in rule 5101:3-2-07.2 of the Administrative Code, the average cost per discharge component is one hundred per cent hospital specific and is determined in accordance with paragraphs (D) to (G)(3)(b) of this rule.

(2) For out-of-state hospitals for discharges on or after July 1, 1990, the average cost per discharge component is determined in accordance with the methodology described in paragraphs (C)(1) to (C)(3)(b) of rule 5101:3-2-07.2 of the Administrative Code.

(3) For hospitals other than those identified in paragraphs (C)(1) and (C)(2) of this rule, the average cost per discharge component will be one hundred per cent of the peer group average costs per discharge determined in accordance with paragraphs (E) to (G)(3)(a) of this rule using the peer groups defined in rule 5101:3-2-07.2 of the Administrative Code.

(D) Calculation of hospital-specific adjusted average cost per discharge.

Unless otherwise indicated, two types of source documents are used to obtain information needed to calculate the hospital-specific average cost per discharge defined in this rule. Those documents are the ODHS 2930 “Cost Report” and the HCFA 2552-85, as submitted to the department (ODHS or JFS as appropriate) as required in rule 5101:3-2-23 of the Administrative Code. The ODHS 2930 will be adjusted by the department in accordance with rules 5101:3-2-22, 5101:3-2-23, and 5101:3-2-24 of the Administrative Code using data made available to the department as of June 15, 1987. The documents used are those reflecting costs associated with the hospital’s 1985 or 1986 fiscal year reporting period. For purposes of this rule, the 1985 cost report will be used for those hospitals with fiscal periods ending September thirtieth, October thirty-first, or December thirty-first; the 1986 cost report will be used for those hospitals with fiscal periods ending March thirty-first, May thirty-first, June thirtieth, or August thirty-first. The hospital-specific average cost per discharge component is calculated in accordance with the provisions set forth in paragraphs (D)(1) to (D)(13) of this rule.

(1) For those hospitals that have merged since the end of the fiscal year period specified in paragraph (D) of this rule and had the same fiscal reporting period, the cost reports for the hospitals will be combined. The department will combine the total cost, total charges, total days, medicaid charges, and medicaid discharges for the hospitals. A new report will be prepared by the department for the merged hospital.

(2) For those hospitals that have merged since the end of the fiscal year period specified in paragraph (D) of this rule and had different fiscal reporting periods, the procedures described in paragraphs (D)(3) to (D)(13)(d) of this rule will be followed. At that point, the average cost per discharge for the hospitals will be combined by:

(a) Multiplying the average cost per discharge for each hospital derived from paragraph (D)(12)(g) of this rule, as applicable, by the number of discharges for each hospital derived from paragraph (D)(11)(a) of this rule. Round the result to the nearest whole dollar.

(b) Sum the products.

(c) Divide the resulting sum by the sum of the hospital’s discharges. Round the result to the nearest whole penny.

(3) The case-mix computation for merged providers will be performed by combining the hospital’s claim records as described in paragraphs (D)(13) to (D)(13)(d) of this rule.

(4) Determination of medicaid inpatient cost adjusted to remove the cost of blood replaced by patient donors.

(a) Identify medicaid inpatient service cost on ODHS 2930, schedule H, section I, line 1, column 12.

(b) Identify cost of blood replaced by donor for medicaid inpatients on ODHS 2930, schedule H, section I, line 2, column 12.

(c) Subtract the amount identified in paragraph (D)(4)(b) of this rule from the amount identified in paragraph (D)(4)(a) of this rule.

(5) Determination of medicaid inpatient cost adjusted to include PSRO/UR cost separately identified.

(a) Identify PSRO/UR cost on ODHS 2930, schedule H, section I, line 3, column 12.

(b) Add the amount derived from paragraph (D)(5)(a) of this rule to the amount described in paragraph (D)(4)(c) of this rule.

(6) Determination of medicaid inpatient cost adjusted to include the cost of malpractice insurance.

(a) Identify the hospital’s malpractice insurance premium cost on HCFA 2552-85, worksheet D-8, part II, line 11, for the hospital’s fiscal reporting period ending in 1986.

(b) Compute the hospital’s per cent of medicaid inpatient charges to total charges.

(i) Identify medicaid inpatient charges on ODHS 2930, schedule H, section I, line 11, column 12.

(ii) Identify total charges for all patients on ODHS 2930, schedule A, line 101B, column 1.

(iii) Divide the amount identified in paragraph (D)(6)(b)(i) of this rule by the amount identified in paragraph (D)(6)(b)(ii) of this rule. Round the result to six decimal places.

(c) For those hospitals whose fiscal year ends on or prior to December 31, 1985, divide the amount identified in paragraph (D)(6)(a) of this rule by the appropriate deflation factor described in paragraph (G)(1) of this rule. Round to the nearest whole dollar.

(d) Multiply the amount identified in paragraph (D)(6)(a) or (D)(6)(c) of this rule, as applicable, by the percentage derived from paragraph (D)(6)(b)(iii) of this rule. Round the result to the nearest dollar.

(e) Add the amount computed in paragraph (D)(6)(d) of this rule to the amount derived in paragraph (D)(5)(b) of this rule.

(7) Determination of medicaid inpatient cost adjusted to remove the direct cost of medical education.

(a) Identify the hospital direct medical education on the HCFA 2552-85, worksheet B, part I, line 95, columns 20, 21, 22, 23, and 24.

(b) Multiply the sum of the amounts in paragraph (D)(7)(a) of this rule by the percentage derived from paragraph (D)(6)(b)(iii) of this rule. Round the result to the nearest dollar.

(c) Subtract the amount computed in paragraph (D)(7)(b) of this rule from the amount computed in paragraph (D)(6)(e) of this rule.

(8) Determination of medicaid inpatient cost adjusted to remove capital-related cost.

(a) Identify the hospital capital-related cost on the HCFA 2552-85, worksheet B, part II, line 95, column 25.

(b) Multiply the amount in paragraph (D)(8)(a) of this rule by the percentage derived from paragraph (D)(6)(b)(iii) of this rule. Round the result to the nearest dollar.

(c) Subtract the amount derived from paragraph (D)(8)(b) of this rule from the amount derived from paragraph (D)(7)(c) of this rule.

(9) Determination of medicaid inpatient cost adjusted to remove the indirect cost of medical education.

(a) Identify the hospital’s indirect medical education percentage described in rule 5101:3-2-07.7 of the Administrative Code. Add 1.00.

(b) Divide the amount derived from paragraph (D)(8)(c) of this rule by the factor derived in paragraph (D)(9)(a) of this rule. Round the result to the nearest dollar.

(10) Determination of medicaid inpatient cost adjusted to remove the effects of wage differences for hospitals in the teaching hospital peer group defined in rule 5101:3-2-07.2 of the Administrative Code.

(a) The labor portion of hospital cost is .7439.

(b) Multiply the amount derived from paragraph (D)(9)(b) of this rule by the labor portion of hospital cost identified in paragraph (D)(10)(a) of this rule. Round the result to the nearest whole dollar.

(c) Subtract the amount derived from paragraph (D)(10)(b) of this rule from the amount derived in paragraph (D)(9)(b) of this rule.

(d) Divide the labor portion of medicaid inpatient cost derived from paragraph (D)(10)(b) of this rule by the wage index for urban areas as published in Federal Register, Volume 51, Number 170, Wednesday, September 3, 1986, as applicable for the geographic area in which the teaching hospital is located. Round the result to the nearest whole dollar.

(e) Add the amount derived from paragraph (D)(10)(c) of this rule to the amount derived from paragraph (D)(10)(d) of this rule.

(11) Determination of medicaid inpatient hospital-specific average cost per discharge.

(a) Identify total medicaid discharges on adjusted ODHS 2930, schedule D, section II, line 6.

(b) Divide the adjusted medicaid inpatient cost derived from paragraph (D)(10)(e) or (D)(9)(b) of this rule, as applicable, by the discharges identified in paragraph (D)(11)(a) of this rule. Round the result to the nearest whole penny.

(c) For hospitals exceeding the limits described in section (III)(A) or (III)(B) of appendix A of this rule, the average cost per discharge is reduced by multiplying the amount derived from paragraph (D)(11)(b) of this rule is multiplied by .97.

(12) Determination of medicaid average cost per discharge adjusted to account for varying fiscal year ends.

(a) Compute a daily inflation factor by dividing the inflation factor for 1986 or 1987, as applicable, described in paragraph (G)(1) of this rule, by three hundred sixty-five. Round the result to six decimal places.

(b) With the exception of those hospitals whose fiscal years end on August thirty-first, compute the number of days between the hospital’s fiscal year end and June 30, 1986.

(c) With the exception of those hospitals whose fiscal years end on August thirty-first, multiply the applicable daily inflation factor from paragraph (D)(12)(a) of this rule by the days computed in paragraph (D)(12)(b) of this rule. Round the result to six decimal places, then add 1.0 to yield an inflation adjustment factor.

(d) With the exception of those hospitals whose fiscal years end on August thirty-first, multiply the medicaid average cost per discharge derived from paragraph (D)(11)(b) or (D)(11)(c) of this rule by the inflation factor derived from paragraph (D)(12)(c) of this rule, as applicable. Round the result to the nearest whole penny.

(e) For those hospitals whose fiscal year ends on August thirty-first, determine the number of days from June 30, 1986 to the hospitals’ fiscal year-end.

(f) For those hospitals whose fiscal year ends on August thirty-first, multiply the applicable daily inflation factor derived from paragraph (D)(12)(a) of this rule by the days derived from paragraph (D)(12)(e) of this rule. Round the result to six decimal places, then add 1.0 to yield an inflation adjustment factor.

(g) For those hospitals whose fiscal year ends on August thirty-first, divide the hospital-specific average cost per discharge derived from paragraph (D)(11)(b) or (D)(11)(c) of this rule, as applicable, by the inflation adjustment factor derived from paragraph (D)(12)(f) of this rule, as applicable. Round the result to the nearest whole penny.

(13) Determination of medicaid average cost per discharge adjusted for case mix.

For each hospital the average cost per discharge, adjusted as described in paragraphs (D)(12)(a) to (D)(12)(g) of this rule, is adjusted to remove the effects of the hospital’s case mix. The data used to compute the hospital’s case mix index are the hospital’s claim records for discharges occurring during the hospital’s fiscal period as described in paragraph (D) of this rule and paid as of May 1, 1987. For purposes of this paragraph, case mix is determined using the DRG categories and relative weights described in rule 5101:3-2-07.3 of the Administrative Code and includes outlier cases described in rule 5101:3-2-07.9 of the Administrative Code.

(a) For each hospital the number of cases in each DRG is multiplied by the relative weight for each DRG. Round the result to five decimal places. The relative weights are those described in rule 5101:3-2-07.3 of the Administrative Code.

(b) Sum the result of each computation in paragraph (D)(13)(a) of this rule.

(c) Divide the product from paragraph (D)(13)(b) of this rule by the number of cases in the hospital’s sample as described in paragraph (D)(13) of this rule. Round the result to five decimal places. This produces a hospital-specific case mix index.

(d) Divide the medicaid inpatient hospital-specific average cost per discharge derived from paragraphs (D)(12)(a) to (D)(12)(g) of this rule by the hospital-specific case mix index computed in paragraph (D)(13)(c) of this rule. Round the result to the nearest whole penny.

(E) Computation of peer group average cost per discharge.

(1) Within each peer group (except for the children’s hospital peer group as defined in rule 5101:3-2-07.2 of the Administrative Code), multiply each hospital’s average cost per discharge from paragraph (D)(13)(d) of this rule by each hospital’s number of medicaid discharges from paragraph (D)(11)(a) of this rule.

(2) Sum the results of each computation in paragraph (E)(1) of this rule.

(3) Sum the number of medicaid discharges described in paragraph (E)(1) of this rule.

(4) Divide the result derived from paragraph (E)(2) of this rule by the result derived from paragraph (E)(3) of this rule. Round the result to the nearest whole penny.

(F) Adjustments to the peer group average cost per discharge component described in paragraphs (E)(1) to (E)(4) of this rule and each children’s hospital average cost per discharge component described in paragraph (D)(13)(d) of this rule are those described in paragraphs (F)(1) to (F)(3) of this rule.

(1) Disproportionate share payments will be made in accordance with rules 5101:3-2-09 and 5101:3-2-10 of the Administrative Code.

(2) An outlier set-aside is determined for each peer group except the teaching hospital and children’s hospitals peer groups as described in rule 5101:3-2-07.2 of the Administrative Code. For teaching hospitals and children’s hospitals identified in rule 5101:3-2-07.2 of the Administrative Code, an amount is calculated using each hospital’s information to determine a hospital-specific group set-aside amount. This set-aside amount is calculated using the methodology described in paragraphs (F)(2)(a) to (F)(2)(f) of this rule.

(a) The additional payments that would be paid for outlier cases for discharges on and after July 1, 1985 to June 30, 1986 is determined using payment rates developed in accordance with this rule except that payment rates do not reflect the adjustment described in paragraph (F)(2)(f) of this rule. Relative weights as described in rule 5101:3-2-07.3 of the Administrative Code, and the day thresholds, cost thresholds, and geometric mean length of stay, excluding outliers, for each DRG as described in rule 5101:3-2-07.9 of the Administrative Code are used.

(b) For each hospital, the total additional payments made for outlier cases is divided by the sum of the total payment amount for all cases in that hospital, less payment amounts for teaching and capital allowances as described in paragraphs (H)(1) and (H)(2) of this rule and payments made for day outliers as described in paragraph (F)(2)(a) of this rule. The resulting per cent is rounded to four decimal places and represents the hospital-specific outlier per cent.

(c) For all hospitals, the total additional payment for outlier cases is calculated by summing each hospital’s additional payments described in paragraph (F)(2)(a) of this rule and is divided by the summed total payment amounts for all cases in all hospitals, less payment amounts for teaching and capital allowances as described in paragraphs (H)(1) and (H)(2) of this rule, plus total payments in all hospitals for day outliers. The resulting per cent is rounded to four decimal places and represents the statewide average outlier per cent.

(d) For hospitals that have a hospital-specific outlier per cent (as described in paragraph (F)(2)(b) of this rule) over the statewide average outlier per cent as described in paragraph (F)(2)(c) of this rule, the outlier payments that are used in the peer group calculation described in paragraph (F)(2)(e) of this rule are capped by multiplying the hospital-specific additional payment amount described in paragraph (F)(2)(a) of this rule by seventy-five per cent.

(e) The outlier set-aside amount is calculated on a peer group basis using the following methodology:

(i) For each peer group except the teaching hospital and children’s hospital peer groups as described in rule 5101:3-2-07.2 of the Administrative Code and for each teaching hospital and children’s hospital (identified in rule 5101:3-2-07.2 of the Administrative Code), sum the total additional payments for outliers as described in paragraph (F)(2)(a) or (F)(2)(d) of this rule, as applicable.

(ii) For each peer group except the teaching hospital and children’s hospital peer groups and for each teaching and children’s hospital, divide the sum from paragraph (F)(2)(e)(i) of this rule by the sum of the total payment amount, less payment amounts for teaching and capital allowances as described in paragraphs (H)(1) and (H)(2) of this rule, plus total day outlier payments.

(f) The outlier adjustment amount is calculated by multiplying the percentage described in paragraph (F)(2)(e)(ii) of this rule by the applicable average cost per discharge component for each peer group as described in paragraphs (E) to (E)(4) of this rule and for each children’s hospital as described in paragraph (D)(13)(d) of this rule. Round the result to the nearest whole penny to determine the outlier adjustment amount. Subtract the outlier adjustment amount from the applicable average cost per discharge component described in paragraph (F)(1)(a) of this rule for discharges occurring on and after July 1, 1988 and prior to February 1, 1989. For discharges occurring on and after February 1, 1989, subtract the outlier adjustment amount from the average cost per discharge component for each peer group as described in paragraph (E)(4) of this rule and for each children’s hospital as described in paragraph (D)(13)(d) of this rule. Round the result to the nearest whole penny.

(3) For purposes of coding adjustment, the applicable average cost per discharge component described in paragraph (F) of this rule is divided by 1.005. Round the result to the nearest whole penny.

(4) For Ohio hospitals meeting the teaching hospital peer group criteria defined in rule 5101:3-2-07.2 of the Administrative Code, the peer group average cost per discharge described in paragraph (F)(3) of this rule is multiplied by a wage factor and rounded to the nearest whole penny. The wage factor is determined by dividing the amount derived from paragraph (D)(9)(b) of this rule by the amount derived from paragraph (D)(10)(e) of this rule, rounded to six decimal places.

(G) Adjustments for inflation.

In calculating the prospective payment rate, it is necessary to adjust costs to reflect inflation at various points in the calculation.

(1) In order to assure hospitals an annual allowance for inflation except as provided in paragraph (G)(2) of this rule, an inflation factor is developed. The Ohio specific “inflation factor” is a weighted average of twenty-three price and wage indexes, either regional or national. The weights are those published weights shown in this paragraph. Price growth increase values for these weighted items are determined by “Global Insight” for the department. Annual inflation factors are derived from summing the result of the following calculation for each item and adding one to produce a factor:

“Factor X Weight X Projected Price Increase”

The categories and indexes are those identified in paragraphs (G)(1)(a) to (G)(1)(t) of this rule. When more than one period is being inflated, annual factors are multiplied by one another to produce a composite factor.

(a) Wages: average hourly earnings (AHE), general medical and surgical hospitals, midwest region. The weight is .4339.

(b) Benefits: supplements to wages and salaries per employee, east north central (ENC). The weight is .0949.

(c) Professional fees, nonmedical: “Employment Cost Index” (ECI) wages and salaries, midwest region. The weight is .0213.

(d) Malpractice insurance: Health care financing administration, professional liability insurance premium index. The weight is .0119.

(e) Utilities: producer price index (PPI) – electricity, commercial sector, ENC (the weight is .0093); price of natural gas for the commercial sector, ENC (the weight is .0037); “Consumer Price Index – All Urban” CPIU – water and sewerage maintenance, U.S. (the weight is .0025). The combined weight is .0155.

(f) Prescription pharmaceuticals: PPI – pharmaceutical preparations, prescription (chemicals), U.S. The weight is .0416.

(g) Food: direct purchase, PPI – processed foods and feeds, U.S. (the weight is .0231); contract purchase, CPIU