Transcript Coverage Institute Proposal - Wisconsin Hospital Association

Hospital Rate Setting Methods
for State Fiscal Year 2011
March 3, 2010
Department of Health Services
Division of Health Care Access and Accountability
Agenda
1)
Timeline/Process/Goals of Rate Setting
2)
Overview of Base Rate Setting Methodology
3)
Overview of Rate Setting Changes Implemented in FY
10
1)
2)
Rate Changes/Updates
Rate Reform 1.0
2
Agenda (cont.)
4)
Updates and Potential Changes to the FY 11 Hospital
Rates:



Rate Updates
Methodology changes
Rate Reform 2.0
5)
Core Plan/Basic Plan Updates
6)
Coleman & Williams Audit
7)
Questions
3
Timeline
12/11/2008
4
4
Process

March 3, 2010- Kickoff Meeting for FY11 Hospital Rate
Setting




Discussion of CY10 rate setting process
Overview of rate setting methodology
Overview of potential FY11 policy changes
March 31, 2010



Discussion of Hospital Budget
Discussion of UPL
Mid-year interim FY 10 preliminary assessment analysis
5
Process

April 28, 2010



May 26, 2010




Presentation of DRG weights
Presentation of Rate Reform 2.0 changes
Presentation of final rates
Rate Reform Proposals to be adopted
Discussion of future improvements
All meetings will be from 9:00-11:00 at WHA
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Goals

Better Communication Between DHS and Hospitals.

Transparency within the rate setting process.

Obtain feedback for hospital to eliminate administrative
burden associate with the hospital payment methodology

To discuss policy changes prior to implementation
7
Overview of Inpatient and
Outpatient Hospital Rate
Setting Methodology
8
8
Rate Setting Overview
1.
2.
3.
4.
5.
Analyze Prior Year Expenditures and Caseload
Determine Base Rate By Projecting Future
Caseload Growth and Case Mix
Obtain Most Recently Available Audited Cost
Report from HCRIS
Obtain MMIS data for Cost Reporting Periods
Recalibrate DRG Weights
9
Rate Setting Overview
6.
7.
8.
Calculate Inpatient Rates
a) DRG Reimbursement for ACHs
b) Provider Specific Cost Based Rates for CAHs
c) Per diem rates for Rehab and Psych Hospitals
Calculate Outpatient Rates
a) All inclusive hospital specific cost based per visit
rate methodology
Determine Access payments (inpatient & outpatient)
10
DRG Recalibration
1)
2)
3)
Adopt most recent available DRG grouper (V27
for 2011)
Aggregate 3 years of paid Medicaid claims and
group to new Medicare grouper (FY 07-FY 09)
Calculate median cost of each claim by DRG
code
a)
4)
Eliminate outlier claims (2 standard deviations above
the mean)
Calculate DRG weight for each DRG code
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Inpatient Rate Setting
Methodology
1)
2)
Calculate CAH provider specific cost based rates
and project payments to determine remaining
funding
Calculate budget neutral base rate for Acute
Care Hospitals, then apply provider adjustments
a)
b)
c)
d)
e)
3)
Wage Index
Capital
Direct and Indirect Medical Education
Rural Hospital Adjustment
DSH Adjustment
Trim Points
12
Inpatient Rate Setting
Methodology (continued)
4)
5)
6)
7)
Calculate budget neutral per diem rates for
psych and rehab hospitals.
Once rates established, project payments based
upon projected utilization and case mix.
Adjust rates as necessary to remain within
budget.
Project outcomes as a result of rate updates.
13
Outpatient Rate Setting
Methodology
1)
2)
3)
4)
Calculate OP Medicaid cost.
Project payments for CAHs, determine remaining
base funding budget.
Apply budget neutral factor to non CAHs.
Project payments using projected volume.
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Determine Access payments
(inpatient & outpatient)
1)
2)
3)
4)
5)
6)
Determine access payment funding levels from hospital
assessment. Withhold $5 million for pay for performance.
Apportion access payments between FFS / HMO and IP and OP
Evaluate utilization projections for ACH, Rehab providers, and
outpatient visits for FFS population
Compute per discharge and per visit access payments
Determine the level of Access payments attributable to HMO
through the per member per month
Determine P4P payment methodology to allocate the $5 million
P4P.
15
Upper Payment Limit (UPL)


In FY 10
 Inpatient- Payments account for 97% of Medicare UPL
 Outpatient- Payments account for 96% of Medicare UPL
With a CAH Assessment in FY 10
 Inpatient- Payments in FY 10 account for 99% of Medicare
UPL
 Outpatient- Payments in FY 10 account for 98% of
Medicare UPL
16
Upper Payment Limit (UPL)

For FY 11 looking at Cost-Based Calculation of UPL.

All Medicaid payments, including supplemental payments, are
included in the UPL calculation
17
Overview of FY10
18
Overview of Rate Setting
Changes Made in FY 10
General Changes
1)
2)
3)
4)
5)
6)
7)
8)
9)
Limited Capital
Reduced DSH Payments
Limited Appeals (Audited Reports)
Access Payments (AcuityVolume)
Used Grouper 26
Eliminated Hold Harmless
Supplemental Payments (Trauma, Rural, UW)
Critical Access Hospital Assessment (Proposed)
Updated P4P Methodology
19
Rate Reform 1.0 Update
Hospital Rate Reform Ideas
12/11/2008
Biennial Savings
Implementation Date
Create an ER triage fee
3.0
Not pursued
Discontinue payments for same-condition, hospital
readmissions within 30 days
1.0
7/1/10
Critical Access Hospitals payment reform
15.0
1/1/10
(SPA 3/1/10)
Reduce reimbursement for hospitalizations for
Ambulatory Care Sensitive Conditions
2.0
12/31/10
Pay for no more than one 24-hour period for ER visit,
regardless of arrival time
2.0
1/1/10
(SPA 3/1/10)
Implement a hospital never-events policy
0.1
Cancelled
Implement a hospital Present on Admissions (POA)
policy
0.1
3/1/10
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20
Overview of FY 11
21
SFY11 Rate Component
Changes
1)
Grouper 27
2)
Updated FY 11 P4P Requirements
3)
Start collecting HCPCs and CPT codes inorder to
implement APCs in FY 12
22
SFY11 Rate Methodology Changes
1)
2)
3)
4)
5)
6)
7)
8)
9)
Refine Access payment methodology due to South East
Region HMO RFP
Eliminate CAH Settlements
Align Rehab Rates to Psych Per Diem Calculations
Pay Labs on Max Fee Schedule
Move EACH payments into base rates
Rate Reform 2.0 Changes
Reform DSH payment methodology to pay DSH as a lump
sum payment
Revise rural hospital payment adjustment (eliminate WI wage
index criteria)
Other Suggested Changes ???
23
Rate Reform 2.0 Hospital Ideas
(Note: List currently includes ideas collected through 2/19/10. Ideas are not ranked or
endorsed by DHS)
Hospitals & HMOs
004 Advance directives
020 Medicare/Medicaid analysis for radiology
022 Medicare facility fee price differentials
030 One-time 2009 DSH claim
038 Increase PA for high utilizers
050 Co-pay for non-emergency ER use
054 Hold members responsible for the differential of using the ER instead of a PCP in non-emergency situations
056 End of life decision making
058 Nominal co-pays for all members
063
Crossover Claims Cost Containment: Strategy for inpatient and outpatient hospital services to reduce MA
liability
065
Increase current assessment to draw down remaining DSH allotment and provide additional DSH payments
to hospitals for uncompensated costs
085 Adopt Federal guidelines for classifying Critical Access Hospitals
118 Enroll clients into HMOs for at least 1 year
127 Implement HMO RFP in all rate regions across the State
133 Minimum $20 co-payment for ER visits
12/11/2008
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Core Plan and Basic Plan
Updates

Core Plan


25 outpatient visit limit
Basic Plan Hospital Benefit

Inpatient





Covers one initial inpatient stay per enrollment year prior to
application of the member’s $7,500 deductible
Authorization needed for payment
Transplants are non-covered services
Co-payment=$100
No Payment for outliers
Core Plan and Basic Plan
Updates (continued)

Outpatient




Emergency Room (ER) Visits





Covers 5 outpatient visits per enrollment year prior to
application of the member’s $7,500 deductible
Authorization needed for payment
Co-payment=$60
Covers 5 ER visits per enrollment year
After 5 visits, the benefit is considered exhausted and all
subsequent ER visits will not be covered
ER visits do not count towards the member’s deductible
Co-payment=$60
Training will be forthcoming
Coleman & Williams
Disproportionate Share Hospital Payment
Audit




CMS issued new regulation on December 19, 2009
requiring auditing and reporting requirements for DSH
payments.
DHS contracted with Coleman & Williams to complete
audit.
Audit will be completed on hospitals that received DSH
payments in FY 2005 and 2006.
Letters will be sent requesting information from hospitals
on March 5, 2010.
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CONTINUED PROCESS
IMPROVEMENTS

DHS staff available to work with individual
hospitals to address any specific concerns.
[email protected]
[email protected]
[email protected]
[email protected]

Next Meeting-March 31, 2010 from 9:00-11:00
at WHA
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Questions
29