OHIO MEDICAID OHA APR-DRG Rebase & EAPG Implementation Overview Sept.14, 2017
OHIO MEDICAID PAYMENTS Inpatient Hospital Based primarily on the All Patient Refined Diagnostic Related Grouping (APR DRG) and prospectively determined hospital payment rates. A small number of hospitals are paid on a reasonable cost basis. Outpatient Hospital Based on 3M Enhanced Ambulatory Patient Grouping System (EAPGs) and prospectively determined hospital payment rates. 2017 IPPS Rebase and OPPS Implementation July 2017 - ODM rebased IPPS hospital base rates, peer groups and GME with a 3 year -5% stop-loss/+5% stop-gain transition. August 2017 - ODM implemented EAPGs with a 3 year 0% stop-loss/+5 stop-gain transition. September 14, 2017 2
INPATIENT PAYMENT RATE SETTING Patient Classification System What are APR DRGs? All Patients Refined Diagnosis Related Groups (APR DRG) is a classification system that classifies patients according to their reason of admission, severity of illness (SOI) and risk mortality (ROM) The patient characteristics used in the definition of the DRGs are limited to information routinely collected on hospital abstract systems There are a manageable number of DRGs that encompass all patients seen on an inpatient basis Each DRG contains patients who are similar from a clinical perspective Each DRG contains patients with a similar pattern of resource intensity September 14, 2017 3
INPATIENT PAYMENT RATE SETTING Fundamental Principle of APR DRG Clinical Logic Severity of illness and risk of mortality are dependent on the patient s underlying condition (i.e., the base APR DRG) High severity of illness and risk of mortality are characterized by multiple serious diseases and the interaction of those September 14, 2017 4
WORKING WITH APR DRGS APR DRGs Characteristics APRs are transparent and statistically sound APRs have expanded payment categories to a total of 1,256 Every secondary diagnosis and all procedures are evaluated for their impact on a case Ohio Medicaid accepts 25 diagnosis and 25 procedures DRG Assignment Claims from the rate setting database were submitted to the grouper for classification using 3M s APR DRG algorithm 314 DRGs plus two error DRGs 4 Severity of Illness (SOI) levels under each DRG 314 DRGs x 4 SOI/DRG = 1,256 possible combinations for payment purposes Source: Ohio Department of Medicaid September 14, 2017 5
INPATIENT PAYMENT RATE SETTING Setting Hospital Base Rates in Ohio Peer groups are created to merge hospitals with similar cost structures to set base rates. The primary formula in the DRG system is Base Rate x DRG Relative Weight All current peer groups were examined to determine their appropriateness under the rebased system Peer groups defined as: Critical Access Hospitals Southeastern Hospitals Children s Hospitals Southwestern Hospitals Major Teaching Hospitals Out-of-State Hospitals Central Hospitals Northwestern Hospitals Rural Referral Center Hospitals Northeastern Hospitals Source: Ohio Department of Medicaid September 14, 2017 6
INPATIENT PAYMENT SYSTEM For the typical inpatient case the payment is calculated as follows: Total Inpatient Payment = Hospital Base Rate x DRG/SOI Relative Weight + Capital Add-on + (Graduate Medical Education Rate x DRG Relative Weight) (if applicable) September 14, 2017 7
INPATIENT PAYMENT SYSTEM Medical Education Add-on recognizes a portion of a hospital s cost by virtue of having Graduate Medical Education (GME) program Direct MedEd recognizes costs related to the actual training of interns and residents Indirect MedEd recognizes facility costs related to hospitals running a teaching program (does not include Direct MedEd costs) It is case-mix adjusted Capital Add-on recognizes costs associated with hospitals buildings and equipment It is not case-mix adjusted September 14, 2017 8
OUTPATIENT PAYMENTS Rationale for the use of EAPGs for payment 3M Enhanced Ambulatory Payment Groups (EAPGs) Designed for an all-patient population Cover all outpatient (e.g. therapies, clinical labs, chemotherapy drugs) Uses CPT/HCPCS & ICD-10 Diagnosis Codes Uses discounting, packaging & consolidation Weights and rates set by Ohio Department of Medicaid on most EAPGs Went live on Aug. 1, 2017 for Ohio Medicaid Source: Ohio Department of Medicaid September 14, 2017 9
OUTPATIENT PAYMENTS EAPG Based Payment System Each EAPG has an associated relative weight for payment Weights indicate the relative resource utilization among all ambulatory services Resource intensive services have higher weights Incentive for efficient use of routine ancillary services is created by significant procedure consolidation and by the packaging of routine ancillaries into base visit payment No incremental payment for routine, low cost ancillaries (blood chemistry, chest x- ray, EKG, etc.) Source: Ohio Department of Medicaid September 14, 2017 10
OVERVIEW OF EAPGS: EAPG DEFINITIONS OP Claim A claim that represents services rendered to one eligible Medicaid beneficiary on one date of service OP Invoice A claim that represents services rendered to one eligible Medicaid beneficiary on one or more date(s) of service Procedure Code Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) Level of Care Determinations New vs. Established Patient Definitions September 14, 2017 11
OVERVIEW OF EAPGS: EAPG DEFINITIONS Packaging The inclusion of payment for certain services within payment for significant procedure or medical services Discounting A reduction in the standard EAPG payment rate when multiple significant procedures are performed Consolidation When a patient has multiple related significant procedures performed on the same date September 14, 2017 12
OVERVIEW OF EAPGS: IP ONLY LIST Ohio Medicaid EAPG system uses the Medicare IP Only List OP only procedures Medicare KEPRO September 14, 2017 13
OHIO POLICY DECISIONS: PAYMENT FORMULA A B C $ A = Hospital specific base rate adjusted for risk corridors B = EAPG relative weight C = Applicable discounting factor(s) $ = Payment (rounded to the nearest penny) September 14, 2017 14
OHIO POLICY DECISIONS: EAPG PAYMENT EXCEPTIONS Laboratory Services Codes 36415, 36416, 78267, 78268 and/or 80000-89999 Reimbursed the LESSOR OF charges or the assigned EAPG payment Radiology Services Codes 36251-36254, 62302-62305 and/or 70000-79999 Reimbursed the LESSOR OF charges or the assigned EAPG payment September 14, 2017 15
OHIO POLICY DECISIONS: EAPG PAYMENT EXCEPTIONS Pharmaceuticals Reimbursement for outpatient hospital pharmaceuticals will be LESSOR OF the charge or payment amounts from the provider-administered pharmaceutical fee schedule, when applicable Discounting factors apply http://medicaid.ohio.gov/providers/feescheduleandrates/schedulesandrate s.aspx#948343-provider-administered-pharmaceuticals September 14, 2017 16
OHIO POLICY DECISIONS: EAPG PAYMENT EXCEPTIONS Durable Medical Equipment (DME) Additional payments for DME may be made for EAPGs 01001 01020 Reimbursement will be the LESSOR OF the charge or payment amounts from the DME fee schedule Discounting factors still apply http://medicaid.ohio.gov/providers/feescheduleandrates/schedulesandrate s.aspx#948339-durable-medical-equipment September 14, 2017 17
OHIO POLICY DECISIONS: EAPG PAYMENT EXCEPTIONS Dental Services EAPGs 00350-00372 will have a special rate applied to calculate reimbursement during the interim period Interim Period - the initial time after EAPG implementation when data collection will occur to determine EAPG relative weights. The interim period will be the effective date of this rule and will last at least six months Children s Hospitals = $1,062 All other Hospitals = $1,192 Discounting factors apply September 14, 2017 18
OHIO POLICY DECISIONS: EAPG PAYMENT EXCEPTIONS Designated Free Vaccines Immunizations covered under the Vaccines for Children (VFC) program & non-designated vaccines (OAC 5160-4-12) Reimbursement for immunizations under the VFC program are $10 for patients 18 years old or younger, contingent upon EAPG grouper Discounting factors apply http://medicaid.ohio.gov/providers/feescheduleandrates/schedulesandrat es.aspx#948343-provider-administered-pharmaceuticals September 14, 2017 19
OHIO POLICY DECISIONS: EAPG PAYMENT EXCEPTIONS Observation Services Need to bill HCPCS G0378 for Traditional Ohio Medicaid EAPGs 00450, 00500, 00501 & 00502 limited to one per day with maximum of two consecutive days Payments will be made on G0378 for up to 24 units per day or 48 consecutive units (could extend over 3-day period) For Medicaid FFS, do not report more than 24 units on your scrubbed claims. Discounting factors apply September 14, 2017 20
OHIO POLICY DECISIONS: EAPG PAYMENT EXCEPTIONS Independently Billed Services Drugs or Medical Supplies & Devices Hospital must initiate request for independently billed payment Report all services provided no more stripping services from claims The UB modifier is placed on the primary procedure Payment is made on independently billed item; all other lines paid zero Supplies & Devices 027X With or without HCPCS 60% of your specific Medicaid outpatient cost-to-charge ratio September 14, 2017 21
OHIO POLICY DECISIONS: EAPG PAYMENT EXCEPTIONS Behavioral Health Redesign Billing as a Hospital Outpatient Department The New Redesign Rates, Codes and Billing went into effect for Ohio Hospital Outpatient Department Providers on Aug. 1, 2017 Redesign Codes & Billing Guidelines can be found on Ohio Medicaid Under: Provider/Fee Schedules & Rates/Outpatient BH Services The SE modifier is utilized when hospitals want to carve the BH service out from grouping to an EAPG and pay under the new redesign weights Testing with MyCare Plans started and still continues with MyCare Plans. If you have not reached out to the plans to test the new redesign codes, you must before getting paid for those services through them and should do so right away. Ohio Medicaid Managed Care Carve-in, outside of the MyCare services is expected to go-live on July 1, 2018 September 14, 2017 22
EAPG GO-LIVE UPDATE MEDICAID & MANAGED CARE September 14, 2017 33
TRADITIONAL MEDICAID: EAPG CLAIMS PROCESSING Go-live: Aug. 1 Successful implementation overall for ODM FFS ODM has reported an issue with the discounting functionality within the EAPG grouper within their system. The grouper is currently paying multiple procedures at 100% of reimbursement when it should be discounting to 50% reduction on the second procedure at times. ODM has also reported that there have been issues with the EAPG Grouper paying some bilateral imaging and lab charges appropriately. ODM policy has stated that claims will be adjusted in the near future when impact has been accessed and reprocessing can be completed. Please stay tuned on a reprocessing date. September 14, 2017 24
MANAGED CARE PLANS: EAPG CLAIMS PROCESSING Issues with 3M s EAPG Ohio Payer Exception File have posed claim processing challenges for Ohio Medicaid s Managed Care Plans. The following are the MCP s course of action to process claims until the file is corrected and testing is completed on Oct. 1, 2017: Molina & AETNA Better Health will be assigning additional staff to process claims manually under the EAPG Grouper until the fix is in place on Oct. 1 United Health Community Plan will be assigning additional staff to process claims manually under the EAPG Grouper until their fix is in place on Sept. 23. After UHC has secured their system fix, they will sweep their system for claims denied/paid incorrectly in the first couple of weeks of August to reprocess them at the corrected EAPG rates. September 14, 2017 25
MANAGED CARE PLANS: EAPG CLAIMS PROCESSING Issues with 3M s EAPG Ohio Payer Exception File have posed claim processing challenges for Ohio Medicaid s Managed Care Plans. The following are the MCP s action plans to process claims until Oct. 1: CareSource will be processing claims from Aug. 1 Oct. 1 under the previously utilized July Medicaid Fee Schedule. It is not CareSource s plan to reprocess claims paid during this period under the new EAPG Grouper logic when testing is complete on Oct. 1. Any Observation G codes billed in the interim period will deny and will need to be rebilled to CareSource under the old 9 codes. September 14, 2017 26
MANAGED CARE PLANS: EAPG CLAIMS PROCESSING Buckeye Health Plan will be processing claims from Aug. 1 Oct. 1 under the previously utilized July Medicaid Fee Schedule. It is not Buckeye s plan to reprocess claims paid during this period under the new EAPG Grouper logic when testing is complete on Oct. 1 Paramount will be processing claims from Aug. 1 Oct. 1 under the previously utilized July Medicaid Fee Schedule. It is not Buckeye s plan to reprocess claims paid during this period under the new EAPG Grouper logic when testing is complete on Oct. 1 September 14, 2017 27
QUESTIONS? September 14, 2017 28
OHA collaborates with member hospitals and health systems to ensure a healthy Ohio Shawn Stack, Health Economics & Policy Director Shawn.Stack@ohiohospitals.org Ohio Hospital Association 155 E. Broad St., Suite 301 Columbus, OH 43215-3640 T 614-221-7614 ohiohospitals.org HelpingOhioHospitals @OhioHospitals www.youtube.com/user/oha1915