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 Welcome 2. FY 2013 Hospital Policy Issues 3. DRG Grouper and Recalibration of Weights 4. Enhanced Ambulatory Patient Groupings (EAPGS) 5. FY 2013 and 2014 Hospital Rate Setting Timeline 6. FY 2012 Hospital Assessment and Assessment P4P Update 7. Cost Settlement Update 8. Future Meetings 9. Adjournment 2
Introduction and Welcome 2011-2013 Health Care Efficiencies 2013-2015 Department Budget Submission United HMO Contract Termination 3
2013 Policy Issues 4
FY 2013 Policy Issues 1. Eliminate Multiple Trimpoints for Acute Care Hospitals Trimpoint = amount of cost a hospital must incur before qualifying for an outlier payment. Current methodology recognizes different trimpoints for those hospitals that have less than 100 beds and those hospitals with 100 beds or greater. 30 hospitals currently have a trimpoint of $5,389 97 hospitals currently have a trimpoint of $32,337 2. Adjust Current Trimpoint Levels DHS implemented a modest adjustment of 2.95% to trimpoints in FY 2012. Facility Size FY 2011 FY 2012 < 100 Beds $ 5,235 $ 5,389 >= 100 Beds $ 31,410 $ 32,337 DHS proposes adjusting trimpoints for FY 2013, but the amount and methodology has not been finalized and DHS is open to feedback. 5
FY 2013 Policy Issues 3. Provider-Based Recognition DHS Recommendation Continue discussing this issue. No change at this time. 4. Rate Setting Process for New Hospitals DHS has not historically developed provider specific rate add-ons (capital & graduate medical education) for new hospitals, unless a provider appealed and submitted sufficient documentation for rate development. DHS proposes to implement a new policy to use the statewide average to provide a provider specific adjustment (capital & graduate medical education) instead of using unaudited cost report data, subject to final settlement. 6
FY 2013 Policy Issues 5. Elimination of WI Specific Enhanced Transplant Codes DHS is evaluating the need to continue the appropriateness to maintain DRG Code 9990 (Heart/Lung Transplant) and DRG Code 9991 (Pancreas Transplant). Since the implementation of Version 25 of the MS-DRG Grouper, Medicare maintains a robust listing of transplant codes (DRGs 1 17). 6. Additional Policy Initiatives DHS is interested in receiving feedback on the proposed initiatives, as well as additional policy initiatives. Feedback is due by October 29 th, please email feedback to: DHSHCAABFM@dhs.wisconsin.gov. 7
DRG Grouper and Recalibration of Weights 8
DRG Grouper Due to the changes in rate setting timeframes, DHS has elected to implement V30 of the Medicare grouper versus V29. No significant changes in the two versions of the grouper. Allows DHS to be more timely in the implementation of the latest grouper consistent with Medicare implementation. 9
DRG Grouper Changes of note from V30 to V28 of the MS-DRG Grouper. Eliminated DRG Code 15 - Autologous Bone Marrow Transplant Addition of DRG Codes 16 & 17 (replacement for DRG Code 15): DRG 16 - Autologous Bone Marrow Transplant W CC/MCC DRG 17 - Autologous Bone Marrow Transplant W/O CC/MCC Other New DRG Codes include: DRG 570 - Skin Debridement W MCC DRG 571 - Skin Debridement W CC DRG 572 - Skin Debridement W/O CC/MCC 10
Recalibration of DRG Weights 1. Aggregate three most recent state fiscal years of Medicaid claims data (SFY 2009, 2010, & 2011). 2. Assign each ICN to V30 by running claims through the CMS MS-DRG Grouper Software. 3. Reassign relevant DRGs to Wisconsin specific DRGs for Neonatal, Psychiatric, and Transplant services. Neonatal DRG Codes 9601 to 9680. Reassigned from MS-DRGs 789 to 795. Psychiatric DRG Codes 9861 to 9878. Psychiatric DRG Codes are equivalent to MS-DRG Codes 876 887 but differentiate based upon pediatrics versus adults to generate WI specific codes. Transplant DRG Codes 9990 & 9991. 11
Recalibration of DRG Weights 4. Calculate Medicaid cost per claim by ICN Provider specific cost is determined by using Medicare cost report data accessible through the Healthcare Cost Report Information System (HCRIS) maintained and published by CMS. Three specific cost to charge ratios (CCRs) calculated for each provider to determine the Medicaid cost per claim, which include accommodation, ancillary, and transplant service CCRs. Revenue codes are cross walked to determine which CCR should be applied for each claim line to calculate Medicaid cost. Adjust Medicaid cost to remove provider specific differences by applying Net Equivalent Cost Factor (adjusts costs to account for differences in wages, capital, and graduate medical education programs). Apply claim specific inflation factor. 12
Recalibration of DRG Weights 5. Aggregate claim cost (less any outlier payments) by DRG and ICN 6. Calculate Geometric Mean and Standard Deviation for each DRG 7. Remove those claims that are determined to be outliners. An outlier is a claim that has a value either above/below 3 standard deviations from the mean. 8. Calculate Medicaid DRG weight for each DRG code Cost per DRG (for all claims accepted) / Average Cost for All DRGs (for all claims accepted) 13
Recalibration of DRG Weights 9. Regroup weights to align with Medicare DRG relationships within DRG service groups when it is not consistent with Medicare hierarchy Weights should be properly aligned based upon the acuity of the case: highest weight should be for services with major complications and comorbidities than those services with complications and comorbidities, and without complications and comorbidities. 10. Verify Statistical Significance of claims used to calculate weights for each DRG Default to Medicare weight for DRG if count is less than 30 claims per DRG. 14
Overview of Handouts DRG Weights Handout# 1 Example of DRG Recalibration Calculation) Handout # 2 - SFY 2013 DRG Weight Recalibration Process - V30 to V28 Comparison Analysis Handout # 3 V30 DRG Weights 15
Outpatient rate setting for 2013: Enhanced Ambulatory PATIENT Groupings (EAPGs) 16
Old Per Diem Methodology Critical access hospitals were paid a hospital-specific, prospective cost based per visit payment rate Acute care, children, rehabilitation and psychiatric hospitals were paid a prospective, hospital-specific rate per outpatient visit Based on a hospital s historical cost Adjusted to stay within the State s available funding for outpatient hospital services New hospitals and out-of-state hospitals are paid at the average percentage of allowed outpatient hospital charges 17
Old Per Diem Methodology Historically, to develop the hospital per diem rates the following process was used: 1. Outpatient Medicaid costs were computed from the last audited Medicare Cost Report and corresponding Medicaid utilization. 2. The total allowable outpatient Medicaid costs was divided by the number of WMP outpatient visits. 3. Then the average cost per visit was inflated to the upcoming State fiscal year. 4. The inflated average cost per visit was multiplied by a budget neutrality factor to determine the prospective, hospital-specific rate per outpatient visit 18
Why Move to EAPGs Currently, Wisconsin Medicaid reimburses for outpatient hospital services at a per diem rate. This per diem rate is not acuity based reimbursement system, but instead recognizes and rewards for cost differences amongst providers. The Enhanced Ambulatory Patient Groups used in the EAPG System categorize the amount and type of resources used in various outpatient visits. Under the EAPG System, DHS will reimburse hospital providers for outpatient hospital services based on the quantity and acuity of services they provide. The new system will ensure that both low and high cost services are reimbursed appropriately. 19
EAPG Policy Explaining EAPGs 1. Multiple Significant Procedure Discounting- when multiple significant procedures the first significant procedure will be reimbursed at 100%, second at 50% and subsequent procedures at 25% 2. Repeat Ancillary discounting- ancillary services provided repeated by the same provider, on same member, and same date of service, the first ancillary is reimbursed 100%, second 50%, and subsequent 25% 20
EAPG Policy Explaining EAPGs 3. Reimbursement of Laboratory Services- Laboratory services will be reimbursed on a max fee basis. 4. Unassigned Procedures- procedures that cannot be assigned to an EAPG due to lack of a HCPCs or CPT code will receive EAPG 999. This applies to revenue codes that are exempt from requiring a HCPCS or CPT code. Nonexempt revenue codes will be denied. 5. Bilateral Discounting- the first procedure will be at 100% and the second at 50%. 21
EAPG Policy Explaining EAPGs 6. Inpatient Only Procedures- Procedures only allowed in an inpatient hospital setting will be denied. 7. Professional Services must still be submitted on Professional Claim- Consistent with current policy professional services should not be billed on the outpatient claim form. 8. National Correct Coding Initiative- this is a CMS requirement to monitor for medically unlikely edits and procedure to procedure edits 22
EAPG Policy Explaining EAPGs 9. HMO Implementation of EAPGs- DHS will not require BadgerCare Plus and SSI HMOs to implement EAPGs until January 1, 2014. The department will reset per diem outpatient rates for CY 2013 for HMO use. These rates will be established and presented to the Hospitals as part of the rate setting process this fall. 23
EAPG Publication The EAPG Publication was posted to the ForwardHealth Portal on October 5 th. https://www.forwardhealth.wi.gov/kw/pdf/2012-55.pdf Providers with questions regarding EAPG may e- mail them to vedseapgsupport@wisconsin.gov. 24
EAPG Rate Setting Methodology Critical access hospitals will be paid using the EAPG system but will still be paid based on their prospective hospital-specific costs Using hospital-specific base rates Acute care, children, rehabilitation and psychiatric hospitals will be paid using the EAPG system Using a statewide base rate, adjusted to stay within the State s available funding for outpatient hospital services New hospitals and out-of-state hospitals will be paid using the EAPG system and statewide base rate 25
EAPG Reimbursement Reimbursement Calculation: 1. Hospital specific base rate X EAPG weight = Base reimbursement for the visit. 2. Base reimbursement for the visit + access payment = Final payment. 3. The Remittance and Status will be adjusted to include EOB codes for each claim. 26
Fee-For-Service EAPG Implementation Timeline DHS Releases Implementation/Policy EAGP Publication DHS To Present Final CY 2013 Hospital Rates/Modeling July 1, 2012 October 2012 January 1, 2013 DHS Begins Internal Testing EAPG Software Rate Setting Vendor Begins Modeling Outcome of EAPG Rates Late Sept/Early December 2012 Oct 2012 DHS to Hold Training Sessions Thoughout State for Hospitals Including: 3M EAGP Presentation DHS Policy/Technical Presentation Rate Setting Presentation Implement EAPG System for Dates of Service 1/1/2013 and beyond 27
EAPG Provider Training Trainings Available: Refer ForwardHealth Provider Update 2012-45 for instructions on how to attend one of the following provider trainings: October 17: Holiday Inn Campus Area, Eau Claire. October 18: The Plaza Hotel and Suites, Wausau. October 19: Crowne Plaza, Madison. October 31: The Meadows at Country Inn and Suites, Green Bay. November 1: Country Springs Hotel, Pewaukee. A Virtual Room session is available and will be split between two dates: November 13: Module 1. November 14: Module 2. 28
FY 2013 AND 2014 HOSPITAL RATE SETTING TIMELINE 29
FY 2013 Hospital Rate Setting July 1, 2012 Timeline All Hospital Rates and Weights are frozen at the FY 2012 levels. DHS updated Hospital/CAH Access Payment Amounts. January 1, 2013 New Inpatient DRG Weights and Rates will be set for fee-forservice and HMO claims for Dates of Service (DOS) on or after 1/1/2013. Outpatient EAPG Weights and Rates will be set for fee-forservice claims for DOS on or after 1/1/2013. New Outpatient Per Visit Rates will be set for HMO claims for DOS on or after 1/1/2013. 30
FY 2014 Hospital Rate Setting July 1, 2013 Timeline FY 2014 Hospital/CAH Access Payment Amounts will updated effective for DOS on or after 7/1/2013. October 1, 2013 New Inpatient DRG Weights and Rates will be set for fee-forservice and HMO claims for DOS on or after 10/1/2013. Outpatient EAPG Weights and Rates will be set for fee-forservice claims for DOS on or after 10/1/2013. January 1, 2014 Implementation of EAPGs by HMOs for DOS on or after 1/1/2014, using Outpatient EAPG Weights and Rates set by 10/1/2013. 31
FY 2013 State Plan Amendment Submission DHS submitted a State Plan Amendment that will be effective July 1, 2012. Included in this amendment will be: 1. Updated Hospital and CAH Access Payment Amounts. 2. Requirements under the Patient Protection and Affordable Care Act (PPACA) of 2010 (42 CFR Part 447, Subpart A, and sections 1902 (a) (4), 1902 (a), and 1903) with respect for non-payment for providerpreventable conditions. 32
FY 2012 Hospital Assessment and Assessment P4P Update Acute Care and Critical Access Hospital (CAH) Access Payments for FY 2012 claims will be shut off on November 1, 2012. DHS will complete the reconciliation for the FY 2012 Acute Care Hospital and CAH Assessments in December and will make the reconciliation payments to HMOs at the end of December. DHS has received the metrics related to the 2012 $5 million P4P payment from WHA and is currently calculating payments for hospitals. These payments will likely occur in November/December. 33
Cost Settlement Update Critical Access Hospital Settlement Complete through 2008 Will do 2009-2010 once audited cost reports are available. Acute Care Lab Settlements 2005 Complete 2000-2004 and 2006 will be sent out shortly 34
Future Rate Setting Meetings November 16 th 10:00am-12:00pm Discussion of Outpatient EAPG Weights and Rates December 12 th 9:00am-12:00pm Present Final Inpatient DRG Base Rates, and HMO Outpatient Per Visit Rates The Department will provide notification by email regarding the specific agendas for these future meetings. 35
Questions Curtis Cunningham, Director Division of Health Care Access and Accountability Bureau of Fiscal Management Phone: (608) 261-6858 Krista Willing, Deputy Director Division of Health Care Access and Accountability Bureau of Fiscal Management Phone: (608) 266-2469 All Questions can be sent by EMAIL to: DHSDHCAABFM@dhs.wisconsin.gov 36