Hospital Payments Kevin Martin & Nancy Dolson 1
Our Mission Improving health care access and outcomes for the people we serve while demonstrating sound stewardship of financial resources 2
Agenda • Base Payments • Supplemental Payments • Comparisons of Total Payments 3
Who Gets Paid for Services? FY16-17 Data 4
Inpatient Hospital • Claims are paid based on Diagnosis Related Groups (DRGs) • Claims with similar diagnosis codes will be assigned to the same DRG • There are just over 300 different DRGs each with 4 different severity levels 5
Inpatient Example • If a diagnosis code on the claim indicates a delivery then it will be assigned to a delivery DRG • If the diagnosis codes indicate a complication in the delivery then it will be assigned to a higher severity level 6
Historical Outpatient Hospital • Interim payments are made based on a percentage of the amounts billed by the hospitals • Several years later interim payments are settled to a percent of costs using audited Medicare cost reports • This methodology incentivizes hospitals to drive costs up and also allows for them to retain large amounts of money for several years before settlements can be performed 7
Historical Outpatient Example 8
Current Outpatient Hospital • Claims are paid based on Enhanced Ambulatory Patient Groups (EAPGs) • EAPGs are a prospective payment system and no longer requires a cost settlement several years after the original claim is received • EAPGs are similar to DRGs except procedure codes are used instead of diagnosis codes • There are about 540 EAPGs that are currently being used 9
Current Outpatient Example • If the primary procedure on the claim indicates a routine surgery then the appropriate EAPG is assigned • In some cases there are several levels of EAPGs to indicate different severities • However, in very severe cases additional EAPGs may be assigned to the claim to indicate the additional procedures that were performed 10
Base Payment FFY2017 $1.6 Billions $1.4 Outpatient $1.2 Payments $1.0 Inpatient $0.8 Payments $0.6 Settlement Payments $0.4 $0.2 $- $(0.2) 11
Supplemental Payments • Inpatient Base Rate Supplemental Payment • Outpatient Supplemental Payment • Uncompensated Care Supplemental Payment • Disproportionate Share Hospital (DSH) Payment • Hospital Quality Incentive Payment (HQIP) • Other Supplemental Payments 12
Supplemental Payments FFY2016 $1.4 Billions Other Supplemental Payments $1.2 DSH Payment $1.0 $0.8 HQIP $0.6 OP Supplemental $0.4 $0.2 IP Supplemental $- 13
Total Department Payments FFY2017 $3.0 Other Supplemental Billions Payments $2.6 DSH Payment $2.2 HQIP $1.8 OP Supplemental $1.4 IP Supplemental $1.0 Outpatient Payments $0.6 Inpatient Payments $0.2 Settlement Payments $(0.2) 14
Hospital A Hospital B Millions Other Supplemental Millions Payments $220 $220 DSH Payment $180 $180 HQIP $140 $140 OP Supplemental $100 $100 IP Supplemental Outpatient Payments $60 $60 Inpatient Payments $20 $20 Settlement Payments $(20) $(20) 15
Questions 16
Contact Information Kevin Martin Fee For Service Rates Manager Kevin.Martin@state.co.us Nancy Dolson Special Financing Division Director Nancy.Dolson@state.co.us 17
Thank You! 18
Acronyms APC – Ambulatory Payment Classification APR – All Patient Related CICP – Colorado Indigent Care Program DME – Durable Medical Equipment DRG – Diagnosis Related Groups DSH – Disproportionate Share Hospital (payment) EAPG – Enhanced Ambulatory Payment Groups FQHC – Federally Qualified Health Clinic HCBS – Home & Community Based Services HQIP – Hospital Quality Incentive Payment IP – In-Patient MMIS – Medicaid Management Information System OP – Out-Patient RHC – Rural Health Clinic UPL – Upper Payment Limit 19
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