Wyo. Code R. 048-0037-30
Medicaid
Chapter 30: Reimbursement of Inpatient Hospital Services
Effective Date: 05/25/2021 to Current
Rule Type: Current Rules & Regulations
Reference Number: 048.0037.30.05252021
(a) The Wyoming Department of Health (Department) promulgates this Chapter pursuant to the Wyoming Medical Assistance and Services Act at Wyoming Statutes § 42-4-104(a)(iv).
(a) This Chapter shall apply to and govern Medicaid reimbursement of inpatient hospital services, other than specialty services.
(b) The Department may issue manuals or bulletins to providers to interpret the sections of this Chapter. Such manuals and bulletins shall be consistent with and reflect the rules contained in this Chapter. The provisions contained in manuals or bulletins shall be subordinate to the sections of this Chapter.
(c) This Chapter is subject to Wyoming Medicaid State Plan.
(a) The Department shall use the APR DRGs and relative weights developed by 3M Health Information Systems (3M) to assist in reimbursement calculations for inpatient hospital services. The Department shall update the APR DRG software, and update the version of DRGs assigned for reimbursement, as needed.
(b) The Department shall calculate reimbursement for all inpatient hospital services for Wyoming Medicaid recipients at participating and non-participating Wyoming Medicaid enrolled hospitals using a prospective per discharge system based-on APR DRGs for acute care services, a per diem-based reimbursement method for rehabilitation services, or a percent of billed charges for transplants, as applicable.
(c) The Department shall designate certain services to be reimbursed based on negotiated rates as specialty services. The Department shall notify providers of services that are reimbursed as specialty services.
(d) The Department shall distribute additional annual supplemental payments to disproportionate share hospitals pursuant to Wyoming Medicaid State Plan Attachment 4.19A.
(e) The Department shall distribute Qualified Rate Adjustment (QRA) payments to qualifying hospitals pursuant to 4.19A, Part 1, Addendum 1 of the Wyoming Medicaid State Plan.
(f) The Department shall distribute Private Hospital Supplemental (PHS) payments to qualifying hospitals pursuant to Wyoming Medicaid State Plan Attachment 4.19A, Addendum 3.
(g) The Department considers the following services and providers as exempt from APR DRG reimbursement:
(i) The Department shall continue to reimburse rehabilitation claims using a per diem payment.
(ii) The Department shall reimburse eligible transplant services at a level that covers the provider’s eligible costs as calculated using billed charges. The most recently available provider-specific cost-to-charge ratios developed annually by the Department as part of the Department’s Medicaid hospital supplemental payment policy calculations will also be used.
(iii) The Department may designate certain services to be reimbursed through negotiated rates or through other reimbursement methodologies.
(iv) Swing bed services are exempt from the APR DRG methodology.
(v) The Department shall not allow acute care hospitals to submit interim claims for APR DRG services.
(h) The Department shall require prior authorization for rehabilitation, psychiatric, transplant, and other services determined by the Department.
(a) “All Patients Refined Diagnosis Related Groups (APR DRGs).” A classification system that classifies inpatient services based on their reason for admission, severity of illness, risk of mortality, and resources used during treatment.
(b) “Extraordinary circumstances.” A catastrophic occurrence, beyond the control of a hospital, which results in substantially higher costs. An “extraordinary circumstance” includes, but is not limited to fire, earthquakes, floods, or other natural disasters.
(c) “Participating Providers.” All in-state Wyoming providers and out-of state providers that are currently enrolled in the Wyoming Medicaid program and/or Wyoming Medicaid providers that received at least eight-hundred thousand dollars ($800,000) in cumulative Wyoming Medicaid payments for inpatient services during state fiscal years 2015-2017.
“Present on Admission.” A patient’s health condition as defined by a diagnosis code that was identified at the time of a patient’s admission to a hospital.
“Rehabilitation Services.” Covered services furnished to an individual with a primary diagnosis for rehabilitation therapy.
(a) The Department shall calculate APR DRG base rates using historical claims data with dates of payment in at least two of the most recent state fiscal years for which complete data is available as the base periods for development. The Department shall:
(i) Assign each certified hospital providing inpatient hospital services to Wyoming Medicaid recipients to one of the following three base rate categories for APR DRG services:
(A) In-state Level II Trauma providers, for which hospital-specific base rates are determined;
(B) In-state free-standing psychiatric providers; or
(C) All other providers;
(ii) Establish base rates so that projected APR DRG payments maintain budget neutrality for claim payments in the base period for participating acute care providers;
(iii) Establish a base rate for free-standing psychiatric provider to include an additional $600,000 annual allocation to maintain funding at levels prior to APR DRG implementation. The following shall apply to such base rates:
(A) Only one base rate is available to each provider, per time period;
(B) The base rate represents a dollar amount used in the APR DRG calculation of reimbursement for a hospital stay;
(iv) Use transitional base rates for the first 12 months after the APR DRG implementation. The following shall apply to such transitional base rates:
(A) During this transition period, provider-specific APR DRG base rates shall be calculated so that estimated APR DRG inpatient hospital payments in the base period do not increase more than five percent or decrease more than four percent as compared to payments under the pre-DRG model;
(B) Following the 12-month transition period, providers shall receive the base rate from their assigned base rate category;
(C) During and after the APR DRG transition period non-participating providers shall be paid the “all other provider” base rate as specified in Section 5(c)(i) for APR DRG payment calculations;
(v) Post base rates for each provider category on the Department website. New rates shall be posted with a provider notice sent by the Department when any changes are made to the APR DRG base rates.
(b) The Department shall assign each claim an APR DRG code and Severity of Illness (SOI). APR DRG code is assigned a relative weight that reflects resources that are used to deliver the services associated with the assigned APR DRG categorization. Relative weights will be determined as follows:
(i) Calculated using a national dataset; and
(ii) Adjusted for anticipated documentation and coding improvement (DCI).
(c) During the rate modeling for the provider base rates used in the initial year of the APR DRG implementation, the Department shall apply a DCI factor of five percent to the relative weights to account for anticipated coding improvements made by providers following the implementation of APR DRGs.
(d) Following the first year of APR DRG implementation, the Department shall review coding improvement and may make future DCI adjustments to account for future provider coding improvements. Any future adjustments shall be reflected within the plan language and implemented upon approval by CMS.
(e) The Department shall allow only one policy or age adjustor to be applied per claim; the applicable adjustment factor with the highest value shall be applied to the APR DRG relative weight on the claim. The Department shall apply the following policy adjustors:
(i) A pediatric policy adjustor of 1.3 for pediatric claims where a recipient is younger than 19 on the date of admission;
(ii) A policy adjustor of 1.2 for Mental Health DRGs;
(iii) A policy adjustor of 1.2 for Substance Abuse DRGs;
(iv) A policy adjustor of 1.5 for Obstetrics DRGs;
(v) A policy adjustor of 1.9 for Normal Newborn DRGs;
(f) The Department shall make outlier payments for high cost claims that exceed a predetermined fixed loss threshold.
(i) The fixed loss threshold is specific to each of the below provider peer groups. Each provider peer group’s fixed loss threshold is equal to two times the standard deviation of claim cost for all APR DRG base period claims for the following four peer groups: acute care hospitals, critical access hospitals, freestanding psychiatric hospitals, and children’s hospitals. The following shall apply to the fixed loss threshold:
(ii) If a provider’s costs for a claim exceed a threshold the provider shall receive an outlier payment.
(iii) The outlier payment shall be calculated as follows:
(A) The Department shall identify the cost of each claim by multiplying allowable charges on the claim by a hospital-specific cost-to-charge ratio;
(B) Participating providers are assigned the most recently available provider-specific cost-to-charge ratios developed annually by the Department as part of the QRA supplemental payment program;
(C) Non-participating hospitals are assigned the statewide average cost-to-charge ratio for the outlier calculation;
(D) If the calculated allowable costs less the DRG base payment exceed the provider’s cost outlier fixed loss threshold, an outlier payment shall be added to the DRG base payment; and
(E) The outlier payment shall be 75 percent of the calculated allowable costs less the DRG base payment that exceed the provider’s fixed loss outlier threshold.
(g) The Department shall provide a discharge capital payment to participating providers. The following shall apply to a discharge capital payment:
(i) The Department shall set capital payments at $277.87 per discharge, as determined during the 2010 level of care rebasing, and may not be inflated
(h) The Department shall apply transfer payment adjustments to claims for services provided to a patient who is transferred after admission from one acute care hospital to another acute care hospital. The following shall apply to such transfer payment adjustments:
(i) The Department shall not apply transfer payment adjustments when a patient is discharged from an acute care hospital to a skilled nursing or rehabilitation facility, or when a patient is moved to or from a distinct part hospital unit of the hospital or from one unit to another within a hospital.
(ii) The type of transfer-to facility is determined using the patient discharge status billed on the institutional claim. Acute-to-acute transfer claims are identified using a distinct list of patient discharge status codes. The Department shall list these codes in related provider policy manuals.
(iii) For a provider transferring a Medicaid recipient, the DRG base payment is calculated as the lesser of the calculated APR DRG base payment or the calculated APR DRG transfer per diem payment.
(iv) The APR DRG per diem is calculated as APR DRG base payment divided by APR DRG average length of stay.
(v) APR DRG transfer per diem payment is calculated as APR DRG per diem multiplied by (Length of Stay plus one).
(vi) Claims from providers transferring a patient and from providers receiving transfers can receive outlier payments.
(vii) Transfer payments do not impact the claim payment for the provider receiving a patient in cases where that provider does not in-turn transfer the patient.
(viii) Transfer status is not considered for certain neonate transfer DRGs. In these cases, the transferring provider will receive the full APR DRG payment instead of a transfer adjusted payment.
(i) Reimbursement for less than one-day stays shall be based on an APR DRG per-diem and shall not include outlier reimbursement or capital payments. The Department shall review all inpatient stays lasting less than one day.
(j) The Department shall use the 3M APR DRG grouper to review for hospital acquired conditions (HACs) based on present on admission (POA) indicators required for hospitals' submission on all APR DRG claims.
(i) Hospitals shall document a valid POA indicator for each inpatient diagnosis, pursuant to CMS regulations in 42 CFR §412.
(ii) The Department shall use POA definitions as outlined by CMS.
(iii) The Department shall not provide additional reimbursement for the treatment of an acquired condition if the presence of a HAC would increase payment.
(k) The final APR DRG claim payment is calculated as follows:
(i) Claim Payment = APR DRG Base Payment or (APR DRG Per Diem X (actual length of stay + 1)) + Outlier Payment (if applicable) + Capital Payment (if applicable).
(ii) Final reimbursement amounts shall be equal to a claim’s allowed amount minus any deductions for recipient cost sharing, patient responsibility, third-party liability or HACs.
(a) Payment of a rehabilitation claim shall include a per diem operating cost payment and a per diem capital cost payment, as determined for purposes of the 2010 rehabilitation level of care rebasing.
(b) The Department shall calculate the allowable cost of each rehabilitation claim for each participating hospital using each hospitals’ as-filed Medicare cost reports for hospital fiscal years ending in state fiscal years 2005 and 2006 and each hospitals’ inpatient claims paid in state fiscal years 2006 and 2007 (base period).
(c) Medical education costs are not considered allowable.
(d) The Department shall identify base period allowable costs as the sum of routine per diem costs and ancillary service costs. The following shall apply to such base period allowable costs:
(i) Base period allowable costs shall be inflated forward from the date of service to the midpoint of SFY 2007 using the CMS-PPS Hospital Market Basket.
(ii) The Department shall determine the number of days of rehabilitation services provided by each hospital from the adjusted base period claims data.
(iii) The Department shall calculate a cost per day for each hospital for rehabilitation services. The following shall apply to such calculations:
(A) For each hospital, the Department shall divide total costs for rehabilitation services in the base period by total days from the base period claims data.
(B) High and low-cost Medicaid outlier costs shall be identified for rehabilitation costs per diem.
(iv) The Department shall determine the base period allowable Medicaid cost per diem for rehabilitation services for each hospital by subtracting high and low-cost Medicaid outliers from the costs determined in subparagraph (A) of this Section.
(v) The Department shall calculate a ventilator payment per day for qualifying services not to exceed a fixed amount per diem. The ventilator payment shall be calculated as an incremental cost of rehabilitation services when a patient is receiving ventilator services. The Department shall calculate the ventilator payment per day to reflect the difference in resources used to provide rehabilitation services to patients with more intensive rehabilitation needs, as measured by an examination of prior year’s claims, the relative weights for rehabilitation services under the Medicare MS-DRG methodology and research about other states' payment methodologies.
(e) The Medicaid payment rate for the rehabilitation services shall be the average payment rate for all participating providers. The Medicaid payment rate for non-participating hospitals shall not include reimbursement for capital costs.
(f) The Department shall accept interim claims for inpatient rehabilitation services.
(a) The Medicaid APR DRG base payment rate for new hospitals shall be the APR DRG base payment rate for other providers as described in Section 5(c)(i)(C). Rates shall remain in effect until the APR DRG system or the rehabilitation per diem payment is rebased.
(b) The Medicaid rehabilitation payment rate for new hospitals is the average rehabilitation per diem payment for all participating providers and includes reimbursement for capital costs.
(a) When two hospitals merge the rate will be the APR DRG and rehabilitation payment rates of the surviving hospital and a capital payment add on.
(b) The capital payment shall be the statewide capital payment per diem amount.
(a) The Department shall reimburse an exempt hospital for its reasonable costs using all-inclusive per diem rates determined on an annual basis, based upon the following:
(i) At the beginning of each state fiscal year, the Department shall determine an interim rate using the costs reported in the most recent available Medicare cost report. The rate is calculated by dividing total allowable costs by total days.
(ii) The final rates shall cover one hundred per cent of the total allowable costs to treat Medicaid clients. If final rates are greater than the interim rates, the Department shall pay each hospital the difference between the final and interim rates. If final rates are less than the interim rates, the Department shall recover any overpayments.
(a) The Department shall calculate capital payment for eligible APR DRG services as follows:
(i) Using the per discharge capital payment rate determined for non-rehabilitation levels of care during the 2010 level of care rebasing;
(ii) Calculating the allowable capital cost for each participating hospital using hospitals' as-filed Medicare cost reports for hospital fiscal years ending in state fiscal years 2005 and 2006 and hospitals' inpatient claims paid in state fiscal years 2006 and 2007;
(iii) Calculating a capital cost per discharge for each participating hospital by dividing total capital costs by total discharges; and
(iv) Arraying the average capital cost per discharge of all participating hospitals and selecting the median capital cost per discharge for the capital payment rate for all participating hospitals.
(b) Capital payment for eligible rehabilitation services shall be calculated as follows:
(i) The Department shall use the per discharge capital payment rate determined for the rehabilitation level of care;
(ii) The Department shall identify the per diem capital payment by dividing the median capital cost per discharge by the average length of stay of all participating hospitals with rehabilitation services discharges; and
(iii) The capital payment amount for rehabilitation services may not exceed the per discharge amount calculated.
(c) An adjustment to a provider's capital rate shall not result in the redetermination of the statewide average prospective capital rate.
(d) The Department shall not make a capital payment to a non-participating provider.
(e) A provider may request an adjustment of its capital rate only to compensate for capital expenditures resulting from extraordinary circumstances.
(f) A redetermination pursuant to this subsection is effective 30 days after the Department issues a notice of rate adjustment.
(g) The statewide base year capital rate shall not be adjusted to reflect adjustments to hospital-specific rates pursuant to this subsection.
(h) Capital rates shall not be inflated.
(a) The Medicaid payment for a claim for which third party liability exists shall be the difference between the Medicaid allowable payment and the third party payment.
(a) A hospital shall submit a complete cost report to the Medicare intermediary in accordance with Medicare requirements.
(b) A hospital shall prepare cost reports in conformance with Medicare requirements.
(c) The Department may request, in writing, that a hospital submit information to supplement its cost report. The hospital shall submit the requested information within 30 days after the date of the request.
(d) The failure of a hospital to comply with reporting requirements shall immediately result in suspension of all Medicaid payments to the hospital.
(i) All Medicaid payments under review shall be repaid by the hospital to the Department within ten days of the suspension.
(ii) The suspension of payments shall continue until the hospital complies with this Section.
(iii) Upon the Department’s receipt of all information required, payments shall be reinstated, without interest.
(e) Reinstatement of payment shall not affect the Department’s right to withhold payments, terminate provider participation, or invoke other remedies permitted by applicable statutes and rules.
(f) If the hospital cannot comply with this Section because of delay caused by the intermediary, the hospital must submit verification of the delay from the intermediary on or before the designated date. In such a case, the Department shall not withhold payments.
(a) The Department shall rebase operating costs when the rates determined no longer meet the requirements of the Social Security Act.
(b) The Department may update rates based on changes to hospital peer groups, hospital billing practices, or changes in hospital operations.
(a) The Department shall maintain a partial eligibility policy in which providers may only submit claims for days the recipient is an eligible Medicaid recipient.
(b) The claim admit date shall be the actual admit date, and the number of days billed to the Department shall include only the dates for which the recipient is eligible even if s/he stayed longer.