Lawriter - OAC - 5160-2-65 Inpatient hospital reimbursement.

5160-2-65 Inpatient hospital reimbursement.

This rule sets forth the payment policies for inpatient hospital services for discharges on or after the effective date of this rule.

(A) Hospitals defined as eligible providers of hospitals services in rule 5160-2-01 of the Administrative Code and are grouped in paragraph (B)(1) of rule 5160-2-05 of the Administrative Code are subject to the all patient refined diagnosis related groups (APR-DRG) prospective payment methodology as described in this rule.

(B) Hospital peer groups. For purposes of setting rates and making payments under the APR-DRG prospective payment system, the department classifies all hospitals not defined in paragraph (A) of this rule into one of the mutually exclusive peer groups defined in this paragraph.

(1) Teaching hospitals as defined in rule 5160-2-05 of the Administrative Code that are located in Ohio.

(2) Teaching hospitals as defined in rule 5160-2-05 of the Administrative Code that are not located in Ohio.

(3) Children's hospitals as defined in rule 5160-2-05 of the Administrative Code that are located in Ohio.

(4) Children's hospitals as defined in rule 5160-2-05 of the Administrative Code that are not located in Ohio.

(5) Rural hospitals as defined in rule 5160-2-05 of the Administrative Code that are located in Ohio.

(6) Urban hospitals as defined in rule 5160-2-05 of the Administrative Code that are located in Ohio.

(7) Critical access hospitals as defined in rule 5160-2-05 of the Administrative Code that are located in Ohio.

(8) All other hospitals that are not located in Ohio that are not classified in paragraph(B)(2) or (B)(4) of this rule.

(C) DRG/severity of illness assignment.

(1) Each discharge is assigned a DRG and one of four severity of illness (SOI) factors based upon the date of discharge.

(2) If a claim submitted by a hospital is deemed ungroupable because it does not contain valid values for one or more of the variables required by the APR-DRG grouper, then the claim will be denied payment by the department.

(D) Payment formula.

(1) The formula used in the APR-DRG prospective payment system is as follows: total payment, rounded to the nearest whole penny, equals (a) base payment plus (b) capital allowance plus (c) medical education allowance (if hospital is eligible) plus (d) outlier payment (if applicable) plus (e) other payments for organ transplants where;

(a) Base payment equals the hospital base rate as described in paragraph (G) of this rule multiplied by the corresponding relative weight for the DRG/ SOI as described in paragraph (H) of this rule.

(b) Capital allowance equals the per case add-on as described in paragraph (J)of this rule.

(c) Medical education allowance equals the per case add-on, case mix adjusted, as described in paragraph (K) of this rule.

(d) Outlier payment equals the eligible outlier costs multiplied by the outlier payment percentage as described in paragraph (I) of this rule.

(e) Other payments for transplant related services as described in paragraph (L)of this rule.

(E) Payments under the prospective payment system are made on the basis of a prospectively determined rate as provided in this rule. No year-end retrospective adjustment is made for prospective payments. Except as provided in rules 5160-2-24, 5160-2-07.13, and 5160-2-40 of the Administrative Code, a hospital may keep the difference between its prospective payment rate and costs incurred in furnishing inpatient services and is at risk for costs which exceed the prospective payment amounts.

(F) Sources for inputs in the payment formula.

(1) The dataset used as inputs in the determination of hospital base rates consists of:

(a) Inpatient hospital claims with dates of discharge from January 1, 2012 through December 31, 2014;

(b) Cost reports submitted by hospitals to the department on its medicaid cost report for the hospital years that end in state fiscal years 2013 (ODM 02930 rev. 4/2013), 2014 (ODM 02930 rev. 4/2014) and 2015 (ODM 02930 rev. 4/2015); and

(c) Inflation factors computed for Ohio by a nationally-recognized research firm that computes similar factors for the medicare program. The inflation factors were used to apply an inflationary value to the total cost computed for each case inflating it to June 30, 2017.

(2) The dataset used as inputs in the determination of relative weights consists of:

(a) Inpatient hospital claims with dates of discharge from October 1, 2015 through June 30, 2017;

(b) Cost reports submitted by hospitals to the department on its medicaid cost report for the hospital years that end in state fiscal years 2016 (ODM 02930 rev. 6/2016) and 2017 (ODM 02930 rev. 10/2017); and

(c) Inflation factors computed for Ohio by a nationally-recognized research firm that computes similar factors for the medicare program. The inflation factors were used to apply an inflationary value to the total cost computed for each case inflating it to December 31, 2018.

(G) Computation of hospital base rate.

(1) Except as described in paragraph ((G)(5) of this rule, the base rate for each Ohio children's hospital is equal to:

(a) Ninety-seven per cent of the total inflated costs for the cases assigned to a children's hospital divided by the number of cases assigned to the children's hospital; divided by

(b) The peer group case mix score as calculated in paragraph (G)(4) of this rule.

(2) Except as described in paragraph (G)(5) of this rule, the base rate for each Ohio teaching hospital is equal to:

(a) Ninety-seven per cent of the total inflated costs for the cases assigned to a teaching's hospital divided by the number of cases assigned to the teaching's hospital; divided by

(b) The peer group case mix score as calculated in paragraph (G)(4) of this rule.

(3) Except as described in paragraph (G)(5) of this rule, the base rate for hospitals in Ohio peer groups other than Ohio children's or teaching hospitals is equal to:

(a) Seventy per cent of the total inflated costs for the cases assigned to a peer group; divided by the number of cases in the peer group; divided by

(b) The peer group case mix score as calculated in paragraph (G)(4) of this rule.

(4) The peer group case mix score is equal to:

(a) The sum of the relative weight values across all cases assigned to a peer group; divided by

(b) The number of cases in the peer group.

(5) For non-Ohio hospital peer groups, the peer group base rate is equal to the value assigned to the peer group effective January 1, 2013. For dates of service on or after the effective date of this rule, the amount will be equal to;

(a) For non-Ohio children's hospitals, eighty per cent of the base rate in effect on the effective date of this rule for Ohio children's hospitals.

(b) For non-Ohio teaching hospitals, eighty-two and two hundredths per cent of the base rate in effect on the effective date of this rule for Ohio teaching hospitals.

(c) For all other non-Ohio hospitals, seventy-seven and sixty-one hundredths per cent of the base rate in effect on the effective date of this rule of Ohio hospitals that are not considered teaching, children's and psychiatric hospitals.

(6) Peer group risk corridors.

Effective for discharges on or after the effective date of this rule, the department will apply the following:

(a) If a hospital is in the rural hospital or critical access hospital peer groups, then the hospital's base rate is equal to the greater of:

(i) The peer group base rate; or

(ii) Seventy per cent of the computed costs of the hospital's cases.

(b) For any other Ohio hospital, except those described in paragraph (G)(6)(a) of this rule, the hospital's base rate is equal to:

(i) The peer group base calculated in paragraph (G) of this rule, if the peer group base rate does not result in more than a five per cent reduction or gain in payments compared to the DRG prospective payment system in effect one calendar day preceding the effective date of this rule; or

(ii) A hospital-specific base rate established to ensure the new peer group base rate does not result in more than a five per cent reduction or gain in payments compared to the prior DRG prospective payment system.

(iii) For discharges on or after July 1, 2015 through the calendar day preceding the effective date of this rule, the risk corridor shall be as implemented on July 1, 2015.

(c) If the hospital is a psychiatric hospital owned and operated by the state of Ohio, regardless of peer group, then the hospital's base rate is equal to;

(i) The hospital base rate calculated in paragraph (G)(1) of this rule, if the peer group base rate does not result in a reduction in payments compared to the prior DRG prospective payment system; or

(ii) A hospital-specific base rate established to ensure the new peer group base rate does not result in a reduction.

(H) The computation of relative weights

(1) The average inflated cost per case within the DRG/SOI; divided by

(2) The average inflated cost per case across all DRG/SOIs.

(I) Computation of outlier payments.

(1) If a discharge is eligible for an outlier payment, the payment will be equal to ninety per cent of the value of eligible outlier costs.

(2) Eligible outlier costs are equal to the cost of the case minus an outlier threshold.

(a) When discharges are submitted for payment by hospitals, the cost of the case is computed as the product of covered billed charges and a hospital-specific medicaid inpatient cost-to-charge ratio as described in rule 5160-2-22 of the Administrative Code.

(b) The outlier threshold is equal to the base payment as described in paragraph(D)(1)(a) of this rule plus a fixed outlier threshold as described in paragraph (I)(2)(c) of this rule.

(c) The fixed outlier threshold varies and can be either DRG specific or peer group specific. The fixed outlier threshold for neonate and tracheostomy DRGs is twenty-five thousand dollars. The fixed outlier threshold for DRGs other than neonate and tracheostomy DRGs billed by hospitals in a children's peer group or the teaching peer group is sixty thousand dollars. The fixed outlier threshold for cases other than neonate and tracheostomy billed by hospitals among other peer groups is seventy-five thousand dollars.

(3) For any claim that qualifies for an outlier payment, the final claim payment shall be limited to the lesser of covered billed charges or the total payment calculated in paragraph (D)(1) of this rule.

(J) Computation of capital payments.

(1) For Ohio hospitals, a capital allowance will be paid as described in rule 5160-2-66 of the Administrative Code.

(2) For non-Ohio hospitals a capital allowance will be paid as described in rule 5160-2-66 of the Administrative Code.

(3) Hospitals serving recipients enrolled in a medicaid managed care plan shall be paid a capital allowance that it is determined based on a hospital's medicaid managed care service experience as published by the department. Non-Ohio hospitals shall be paid a capital allowance using the published statewide average managed care capital rate.

(K) Computation of medical education payments.

(1) For Ohio hospitals, a medical education allowance will be paid as described in rule 5160-2-67 of the Administrative Code.

(2) For non-Ohio hospitals, the calculated base rate as described in paragraph (G)(5) of this rule includes an allowance for medical education.

(L) Other payments for transplant related services.

(1) 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.

(2) Reimbursement for bone marrow transplant and hematopoietic stem cell transplant 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. Reimbursement is further contingent upon:

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

(b) Compliance with the performance standards described in agency 3701 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.

(3) Organ acquisition and transportation costs for heart, heart/lung, liver, pancreas, single/double lung, and liver/small bowel transplant services will be reimbursed at one hundred per cent of billed charges.

(4) For harvesting costs for bone marrow transplant services, the prospective payment amount will be either:

(a) The DRG amount as described in this rule if the donor is a medicaid recipient or if the bone marrow transplant is autologous.

(b) The product of the covered billed charges times the hospital-specific, medicaid inpatient cost-to-charge ratio as described in rule 5160-2-22 of the Administrative Code, if the donor is not a medicaid recipient.

(M) Other payment policies.

(1) In accordance with rule 5160-2-03 of the Administrative Code, no coverage is available for days of inpatient care which occur solely for the provision of rehabilitation services related to a chemical dependency.

(2) A claim for inpatient services qualifies for interim payment on the thirtieth day of a consecutive inpatient stay and at thirty-day intervals thereafter. Under interim payment, hospitals will be paid on a percentage basis of charges. The percentage will represent the hospital-specific medicaid inpatient cost-to-charge ratio as described in rule 5160-2-22 of the Administrative Code. For those hospitals which are not required to file a cost report under the provisions of rule 5160-2-23 of the Administrative Code, the statewide average medicaid inpatient cost-to-charge ratio as described in rule 5160-2-22 of the Administrative Code will be used. Interim payments are made as a credit against final payment of the final discharge bill. Amounts of difference between interim payment made and the prospective payment described in paragraph (A) of this rule for the final discharge will be reconciled when the final discharge bill is processed.

(3) Payments for transfers as defined in rule 5160-2-02 of the Administrative Code are subject to the following provisions. If a hospital paid under the prospective payment system transfers an inpatient to another hospital or receives an inpatient from another hospital and that transfer is appropriate as defined in rule 5160-2-07.13 of the Administrative Code, then each hospital is paid a per diem rate for each day of the patient's stay in that hospital, plus capital, medical education and outlier allowances, as applicable, not to exceed, for nonoutlier cases, the final prospective payment rate that would have been paid for the appropriate DRG/SOI as described in paragraph (D) of this rule. When a patient is transferred, the department's payment is based on the DRG/SOI under which the patient was treated at each hospital.

The per diem rate is determined by dividing the product of the hospital's base rate multiplied by the DRG/SOI relative weight as described in this rule by the statewide average length of stay calculated for the specific DRG/SOI into which the case falls.

For inpatient services provided to patients who are discharged, within the same hospital, from an acute care bed and admitted to a bed in a psychiatric unit distinct part, payment will be made based on the DRG representing services provided in the acute care section and the services provided in the psychiatric unit distinct part.

Transfers received by or discharging from a freestanding psychiatric hospital are not subject to the provisions of paragraph (M)(3) of this rule. For transfers from one unit of a hospital to another distinct unit of the same hospital, the claim with an admit source indicating that the transfer results in a separate claim to medicaid is not subject to the provisions of paragraph (M)(3) of this rule, provided that the discharge status does not indicate transfer.

(4) In instances when a recipient's eligibility begins after the date of admission to the hospital or is terminated during the course of a hospitalization, payment will be made on a per diem basis as described in paragraph (M)(3) of this rule plus the allowance for capital, medical education and outliers, as applicable.

(5) Readmissions are defined in rule 5160-2-02 of the Administrative Code. A readmission within one calendar day of discharge, to the same institution, is considered to be one discharge for payment purposes so that one DRG payment is made. If two claims are submitted, the second claim processed will be rejected. In order to receive payment for the entire period of hospitalization, the hospital will need to submit an adjustment claim reflecting services and charges for the entire hospitalization.

(6) In the case of deliveries, the department requires hospitals to submit separate claims based respectively on the mother's individual eligibility and the child's individual eligibility.

(N) Adjustments to relative weights . In accordance with section 5164.721 of the Revised Code, long-acting reversible contraceptive (LARC) devices may be billed and paid separately when provided during an inpatient hospitalization. To facilitate separate payment, the relative weights for DRGs 540-542 and 560, as calculated in paragraph (H) of this rule, were reduced three and eight hundredths per cent.

Effective: 9/1/2018
Five Year Review (FYR) Dates: 7/6/2022
Promulgated Under: 119.03
Statutory Authority: 5164.02
Rule Amplifies: 5164.02 , 5164.70
Prior Effective Dates: 07/01/2013 (Emer.), 09/27/2013, 12/31/2013 (Emer.), 03/27/2014, 07/01/2016, 01/01/2017, 07/06/2017