Wisconsin Medicaid Hospital Update

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Angelica Carson
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1 Rural Hospital Finance Workshop Division of Health Care Access and Accountability Bureau of Fiscal Management August 26, Agenda 1. SFY 2016 Hospital Medicaid Expenditures APR DRG Training Dates & Locations 4. Hospital Birth Claims Submission Policy 5. SFY 2016 Hospital Assessment Mid-Year Look 6. SFY 2017 Access Payments 7. Additional Updates 8. Questions Page 2 1

2 Rural Hospitals in Wisconsin Wisconsin has 58 Critical Access Hospitals (shown on the map) and another 16 Rural Hospitals. Page 3 SFY 2016 Hospital Expenditures Inpatient Fee For Service Claims Total Inpatient Expenditures Total Claim Payment (with P4P withold) $506,612,210 In-State Acute Care Hospitals $438,511,711 Critical Access Hospitals $25,256,552 Major Border, OOS, Psych & Rehab Hospitals $42,843,947 Total Inpatient Base + Inpatient P4P Withold $243,401,275 In-State Acute Care Hospitals $198,999,612 Critical Access Hospitals $15,318,886 Major Border, OOS, Psych & Rehab Hospitals $29,082,777 *Statistics are based on MMIS claims with date of discharge in SFY 2016 **Extract date: 07/18/2016 (does not account for claims lag) Total Outlier Payments $156,250,165 In-State Acute Care Hospitals $134,475,283 Critical Access Hospitals $8,140,266 Major Border, OOS, Psych & Rehab Hospitals $13,634,615 Total Access Payments $106,960,770 In-State Acute Care Hospitals $105,036,815 Critical Access Hospitals $1,797,400 Major Border, OOS, Psych & Rehab Hospitals $126,555 Inpatient Utilization Inpatient Discharges 40,639 In-State Acute Care Hospitals 36,412 Critical Access Hospitals 2,809 Major Border & OOS Hospitals 1,418 Page 4 2

3 SFY 2016 Hospital Expenditures Outpatient Fee for Service Claims Total Outpatient Expenditures Total Claim Payment (with P4P withold) $143,443,964 In-State Acute Care Hospitals $116,050,876 Critical Access Hospitals $26,025,284 Major Border, OOS, Psych & Rehab Hospitals $1,367,804 *Statistics are based on MMIS claims with date of discharge in SFY 2016 **Extract date: 04/25/2016 (does not account for claims lag) Total Inpatient Base + Inpatient P4P Withold $69,508,063 In-State Acute Care Hospitals $43,134,441 Critical Access Hospitals $25,005,818 Major Border, OOS, Psych & Rehab Hospitals $1,367,804 Total Access Payments $73,935,901 In-State Acute Care Hospitals $72,916,435 Critical Access Hospitals $1,019,466 Major Border, OOS, Psych & Rehab Hospitals $0 Outpatient Utilization Outpatient Visits 321,546 In-State Acute Care Hospitals 270,880 Critical Access Hospitals 43,582 Major Border & OOS Hospitals 7,084 Page 5 Status of RY 2017 Inpatient Reimbursement Development Wisconsin DHS is redesigning its inpatient prospective payment system and adopting the All Patient Refined Diagnosis Related Groups (APR DRG) patient classification model Implementation date is January 1, 2017 for both FFS and managed care payments for Medicaid and related programs o Rate calculation will be completed by October 2016 Page 6 3

4 Model Claims Dataset APR DRG modeling uses a combination of FFS and HMO claims to capture the entire Medicaid patient population: o FFS discharges in SFY 2015 o HMO discharges in SFY 2015 APR DRG budget pool will be based on simulated payments under RY 2016 MS-DRG rates, inflated to RY 2017, using both FFS and HMO discharges The most currently available Medicare cost report in the HCRIS, including as-submitted cost reports, will be used for RY 2017 modeling purposes Page 7 APR DRG Payment Parameters DRG Base Rates o For general acute hospitals, modeled base rates have a single statewide standardized amount, adjusted for Medicare IPPS wage index adjustment (including reclassifications) o For CAHs, modeled base rates are provider-specific and cost-based APR DRG v33 using national weights o Extremely strong correlation between National Weights and Wisconsinspecific weights indicate nominal difference between the two sets o Provides a consistent and comprehensive basis for determination of relative weights for all APR DRG classifications o National Weights used in several new APR DRG systems in States: AL, AZ, CA, FL, IL, MN, WA Page 8 4

5 APR DRG Payment Parameters cont. Wage Index is based upon FFY 2016 Medicare IPPS values, with reclassifications (There is no wage index adjustment for CAHs because they are paid cost) Claims are paid the lesser of APR DRG final payment calculation or submitted charges aligning with EAPG policy Introduction of service-specific policy adjusters Birth weight in grams must be reported for newborns (new requirement for payment) Page 9 APR DRG Payment Parameters cont. For acute-to-acute transfers, the transferring provider will be paid the lesser of APR DRG final payment or calculated APR DRG per diem (consistent with the Medicare IPPS approach) Outliers are paid in a similar fashion as under MS-DRG with updated outlier threshold and marginal payment percentage Page 10 5

6 Service Line Adjustments to Base DRG Payments Service line adjusters or factors will be implemented under APR DRG DRG Base Payment x Hospital DRG Base Relative Service Line = Adjuster Rate Weight x Service line adjusters enhances payment for key Medicaid services o Services receiving enhancement have service line adjuster greater than 1.0 o Services without enhancement have service line adjuster equal to 1.0 Page 11 Policy Adjusters Under APR DRG Policy Adjuster Claim Identification Basis Factor Neonate DRG 1.30 Normal Newborn DRG 1.80 Pediatric Age (17 and under) 1.20 Transplant DRG 1.50 Level I Trauma Services Provider trauma designation 1.30 Model applies highest applicable factor to each claim (for claims that qualify for multiple policy adjusters) Page 12 6

7 Outlier Payment Modeled outlier payments are determined using a cost-based methodology with new factors, with the goal of reducing the current outlier payment portion of inpatient payments (approximately 40% of total) in half Criteria Trimpoints Trimpoint Critical Access $300 In-State, <100 Beds $11,270 In-State, 100 Beds & Border Providers $22,539 LTACs $25,000 Outlier Payment Percentage* Severity of Illness % 1 or 2 80% 3 or 4 95% *Not applicable to CAHs, which are paid cost Page 13 Transitional Corridor, excluding CAHs which are paid cost A transitional corridor will be implemented in the first year, with a +5% increase ceiling and -5% decrease floor, based on modeled estimated payment change o Providers with less than a -5% estimated decrease would have an upward transitional adjustment to the allowable floor o Providers with greater than a +5% estimated increase would have a downward transitional adjustment to the allowable ceiling o Providers within the 5% corridor would have no adjustment Transitional adjustments will be applied prospectively based on APR DRG model estimates, with no future settlements or retroactive adjustments Page 14 7

8 APR DRG Training Dates and Locations The Department is holding 5 trainings in October on the APR DRG implementation, scheduled for 8:30 a.m. to 12:00 p.m. Pre-registration will begin in early September. o o o o o October 12: Crowne Plaza Madison October 13: Holiday Inn South Eau Claire October 18: Country Springs Hotel Pewaukee October 19: Country Inn and Suites Green Bay October 26: Virtual Training 15 Hospital Birth Claims Submission Policy When a woman gives birth, the hospital is required to submit separate claims for the hospital stay of the woman and the hospital stay of her newborn. The newborn s birth weight must only be recorded on the newborn s claim, using Value Code 54. o DHS will monitor claims and adjustments for births with dates of discharge through December 31, During this transition period, hospitals will continue to be reimbursed for claims or adjustments that do not meet these requirements. o Effective January 1, 2017, claims that do not meet these requirements will no longer be reimbursed. o For more information, see ForwardHealth Update :

9 SFY 2016 Hospital Assessment Mid-Year Look For critical access hospitals, FFS inpatient and outpatient access payments are trending slightly lower than projected. Hospitals are strongly encouraged to submit any remaining claims with dates of service July 1, 2015 through June 30, 2016, so that access payments can be paid on all eligible claims before SFY 2016 access payments are turned off. DHS will continue to monitor payments. A retroactive FFS payment may be necessary to hit the expenditure target. Critical Access Hospitals Provider Assessment Projection Projected Remaining Payments to be Budgeted Payments Per Assessment Funding Actual Access Payments YTD* made* Total Projected Access Payments Model** Projected (Underspend)/ Overspend IP FFS Access Payments $1,458,345 $514,710 $1,973,055 $ 2,330,336 ($357,281) OP FFS Access Payments $1,252,531 $421,773 $1,674,304 $ 1,906,638 ($232,334) Managed Care Payments $7,515,335 $673,690 $8,189,024 $ 8,044,109 $144,915 Total Access Payments to Date $10,226,211 $1,610,173 $11,836,383 $ 12,281,083 ($444,700) *Claims with payment through 3/31/2016 (fee for service inpatient and outpatient) and through 6/30/2016 for HMOs. YTD numbers reflect total payments and utilization paid to date. Taking into effect a claims lag, remaining projections assume only nine months of SFY 2015 fee for service claims have been fully processed to date and the June/July fifty percent HMO withhold will be paid out. ** These payments do not reflect other supplemental payments made related to the hospital assessment, only access payments. 17 SFY 2017 Access Payments Last week DHS sent hospitals provider-specific tax amounts for the SFY 2017 Hospital and Critical Access Hospital Assessment. Hospitals have until today to provide feedback on the accuracy of the data. DHS will then incorporate any necessary changes and finalize the tax amounts next week. SFY 2017 Tax Amounts Provider Type Provider Charges* Tax Rate Tax Amount Tax Amount as a % Rate Increases *Total hospital charges for acute care and rehab providers, inpatient charges for critical access Rate Increase Acute Care/Rehab $ 39,742,375, % $ 414,507, % $ 672,028,697 Critical Access $ 722,774, % $ 7,538, % $ 12,221,846 Total $ 40,465,149, % $ 422,045, % $ 684,250,543 New access payment rates effective July 1, 2016, will be set in late August/early September. As in past years, acute care, rehab and critical access hospitals will experience a lag in access payments during July and August until the new rates are set. Claims eligible for an access payment with dates of service from July 1, 2016, until the date new rates are set will be adjusted accordingly. 18 9

10 Additional Updates Next Medicaid Hospital Rate Advisory Group Meeting (MHRAG) Thursday, Sept. 15 (10:00am 12:00pm), DHS Madison Central Office, Conference Call and Skype Outpatient EAPG Rates to be Released at Next MHRAG Outpatient EAPG rates are currently being calculated. Draft rates will be released at the next MHRAG meeting. 19 Questions Christian Moran, Hospital Rate Setting and Policy Section Chief Bureau of Fiscal Management Division of Health Care Access and Accountability Phone: (608) All Questions can be sent by to: 20 10

Medicaid Hospital Rate Advisory Group

Medicaid Hospital Rate Advisory Group Wisconsin Department of Health Services Division of Health Care Access and Accountability Bureau of Fiscal Management October 16, 2012 1 Agenda 1. Introduction and