washington state hospital association the medicaid rebasing: what it will mean for your hospital...
TRANSCRIPT
Washington State Hospital Association
The Medicaid Rebasing: What It Will Mean For
Your Hospital
WebcastFebruary 24, 2014
Washington State Hospital Association
PresentersScott PalafoxHealth Care AuthoritySection ManagerHospital Finance & Premium Section
Dylan Oxford Health Care Authority
Hospital Rates Manager Hospital Finance & Premium Section
Claudia SandersWashington State Hospital AssociationSenior Vice PresidentPolicy Development
Andrew BuszWashington State Hospital Association
Policy Manager, FinancePolicy Development
Washington State Hospital Association
History
Institutional Payment Institutional Payment Rebase and ImplementationRebase and Implementation
February 24, 2014
TopicsTopics• Background
• Inpatient Services
• Outpatient Services
• Rebasing Issues
• System Changes
• Next Steps
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BackgroundBackground
• Why Rebase?– Update payment methods– Analyze current payment incentives– Improve specificity and reporting
• Goals– Budget neutrality– Establish stronger methods– Focus on Medicaid services
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Guiding PrinciplesGuiding Principles
Access Ensure Medicaid clients have access to quality care.
Quality Promote and reward high value, quality driven healthcare services.
Efficiency Provide incentives for efficient care.
Equity Recognize resource intensity for all providers.
Predictability Provide predictable, understandable payment methods.Ensure payments can be replicated.
Transparency Ensure payment methods and decisions are transparent.
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Taskforce MeetingsTaskforce Meetings
• Designed to seek hospital input and improve transparency
• Topics– Relative weights– Policy adjusters– Reviewing and refining payment models
HCA would like to thank all of the hospitals for participating!
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InpatientInpatient
• All Patient Refined Diagnosis Related Groups (APR-DRG)– ICD-10 Compliant– Severity of Illness (SOI)
• Increases specificity on services• Relies on service intensity to determine payment
• New targeted implementation date is July 1st, 2014
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OutliersOutliers
• Outliers will be determined based on a fixed loss threshold of $40,000– Loss is determined as the cost beyond base DRG
payment– Cost is estimated based on billed charges x RCC
• The outlier adjustment factor will vary based on SOI– SOI 1 or 2 will pay 80% of costs above threshold– SOI 3 or 4 will pay 95% of costs above threshold
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OutpatientOutpatient
• Enhanced Ambulatory Patient Grouping (EAPG)– Extend OPPS methodology to additional
services– Larger service groups
• Pays more for major services, less for ancillary
• Removes dependency on Medicare
• New targeted implementation date is July 1st, 2014
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Rebasing IssuesRebasing Issues
• Psychiatric Services– HCA shifted $3.5M from acute inpatient services
to inpatient psychiatric services at acute hospitals
• Indirect Medical Education (IME) on Outpatient– IME is currently applied to inpatient services– HCA did not incorporate this in the final rates
• Transfer payments– An issue was identified with transfers in the
claims baseline– HCA recalculated the baseline payment amounts
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Rebasing Issues (cont.)Rebasing Issues (cont.)
• Budget Neutrality– Caseload intensity– Population change– Claim coding
• Temporary Budget Neutrality Adjustment– HCA will apply a 3% downward adjustment to
FFS rates
• Measuring– HCA will begin analyzing neutrality six months
after implementation
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System ChangesSystem Changes
InpatientRelative Weights HCA will use standard 3M relative weights , instead of
Washington state specific rates.
DRG Exclusions Transplants, bariatric surgeries, and claims which group to psychiatric, detox, or rehab DRGs will not pay DRG.
Rate Updates HCA will update the rates annually, beginning July 2015. Rate updates will include new wage and education adjustments.
Medical Education HCA will not change the medical education adjustment in inpatient rates.
Charge Cap Payments will be limited to billed charges.
Caesarean delivery HCA will pay Caesarean deliveries at the corresponding relative weight(s).
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System ChangesSystem Changes
OutpatientRelative Weights HCA will use standard 3M relative weights.
Dental HCA will pay dental services through EAPG.
EAPG exclusions Durable Medical Equipment and Physical Therapy & Rehabilitation will not pay EAPG.
Pediatric Services HCA will apply an adjustment of 1.35 for EAPG services to children under the age of 18 at any hospital.
Cancer Drugs HCA will apply an adjustment of 1.10 for chemotherapy and pharmacotherapy EAPGs.
Consolidated and Ancillary EAPGs
HCA will pay at zero on procedures grouped to consolidated and ancillary EAPGs based on default EAPG settings.
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Next StepsNext Steps• Targeted implementation date of July 1st, 2014
• Hospital specific data requests
• Communication with MCOs
• Update Rules (WAC, SPA, MPG)
• System readiness
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Washington State Hospital Association
Questions and Comments
Washington State Hospital Association
For More Information
Scott Palafox Dylan OxfordHealth Care Authority Health Care AuthoritySection Manager Hospital Rates ManagerHospital Finance & Premium Section Hospital Finance & Premium Section(360) 725 1848 (360) 725 2130ScottPalafox [at] hca.wa [dot] gov DylanOxford [at] hca.wa [dot] gov
Andrew BuszWashington State Hospital AssociationPolicy Development TeamPolicy Director, Finance(206) 216 2533AndrewB [at] wsha [dot] org