Hospital Payments Kevin Martin & Nancy Dolson 1 Our Mission - - PowerPoint PPT Presentation

Hospital Payments

Kevin Martin & Nancy Dolson

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Our Mission

Improving health care access and

• utcomes for the people we serve

while demonstrating sound stewardship of financial

resources

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Agenda

• Base Payments
• Supplemental Payments
• Comparisons of Total Payments

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FY16-17 Data

Who Gets Paid for Services?

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

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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

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Historical Outpatient Hospital

• Interim payments are made based on a percentage
• f 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

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Historical Outpatient Example

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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

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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

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$(0.2) $- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 Billions

Base Payment FFY2017

Outpatient Payments Inpatient Payments Settlement 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

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Supplemental Payments

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$- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4

Billions

Supplemental Payments FFY2016

Other Supplemental Payments DSH Payment HQIP OP Supplemental IP Supplemental

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$(0.2) $0.2 $0.6 $1.0 $1.4 $1.8 $2.2 $2.6 $3.0

Billions

Total Department Payments FFY2017

Other Supplemental Payments DSH Payment HQIP OP Supplemental IP Supplemental Outpatient Payments Inpatient Payments Settlement Payments

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$(20) $20 $60 $100 $140 $180 $220

Millions

Hospital A

Other Supplemental Payments DSH Payment HQIP OP Supplemental IP Supplemental Outpatient Payments Inpatient Payments Settlement Payments

$(20) $20 $60 $100 $140 $180 $220

Millions

Hospital B

Questions

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Contact Information

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Kevin Martin Fee For Service Rates Manager Kevin.Martin@state.co.us Nancy Dolson Special Financing Division Director Nancy.Dolson@state.co.us

Thank You!

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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