Alaska Administrative Code › Title 7 - Health and Social Services › Part 8 - Medicaid Coverage and Payment › Chapter 150 - Prospective Payment System; Other Payment › 7 AAC 150.250 - Inpatient prospective payment based on Diagnosis Related Groups (DRG)

Current through May 31, 2024
(a) For discharges
				on or after January 1, 2024, the department will reimburse inpatient hospital
				services provided by general acute care hospitals on a per-stay basis using a
				Diagnosis Related Groups (DRG) payment methodology. The department will apply
				the DRG payment methodology to in-state general acute care hospitals, except
				hospitals listed in (b) of this section, and to all out-of-state hospitals. The
				department will designate certain out-of-state hospitals with a high volume of
				Medicaid claims for this state as border hospitals for reimbursement purposes.
				Components of the DRG payment methodology are as follows:
(1) the department will determine and assign
				hospital-specific DRG base rates to in-state general acute care hospitals
				subject to the DRG payment methodology and to designated border hospitals; the
				department will determine and assign a single DRG base rate to all other
				out-of-state hospitals;
(2) the DRG
				grouper used to assign inpatient stays to a DRG is an All Patient Refined
				Diagnosis Related Groups (APR DRG) grouper; the APR DRG system classifies each
				inpatient stay based on information contained in the Medicaid inpatient claim,
				including diagnosis codes, procedure codes, discharge status codes, and patient
				characteristics;
(3) DRG relative
				weights are derived from an APR DRG national hospital-specific relative value
				(HSRV) weight set for the version of the grouper that is in place; the
				department may scale the DRG relative weight values to represent Medicaid
				claims experience for this state to achieve a case mix index of 1.0;
(4) average lengths of stay are derived from
				an APR DRG national weight set for the version of the grouper that is in
				place;
(5) a Healthcare Acquired
				Conditions (HAC) utility is used to remove HACs from consideration in an APR
				DRG assignment;
(6) the department
				may multiply DRG relative weights by policy adjustors based on patient age or
				the patient's APR DRG assignment to increase or decrease reimbursement; each
				APR DRG is assigned to a service category determined by the
				department;
(7) the DRG base
				payment before the application of other payment adjustments is calculated as
				follows:
DRG base rate * APR DRG relative weight * policy adjuster =
				  DRG base payment;
(8)
				transfer adjustments that are based on uniform billing discharge status codes,
				as set out in the American Hospital Association's
Official UB-04 Data
				Specification Manual,
2024 edition, adopted by reference in
				7 AAC 160.900(a), and that are based on
				length of stay, prorate payments as follows:
(A) transfer adjustments apply in cases where
				a patient is transferred to another hospital before completing the expected
				full course of treatment as determined by the national length of stay for the
				APR DRG assigned to a case;
(B) the
				transfer payment policy applies to the hospital making the transfer; the
				hospital receiving the patient is not subject to the transfer payment
				policy;
(C) APR DRGs that are
				specifically described to apply to transferred patients are exempt from
				transfer payment adjustments;
(D)
				in the transfer adjustment calculation, one day is added to the actual length
				of stay to reflect the higher costs of care that typically occur on the first
				day of an inpatient stay;
(E) the
				discharge status codes triggering a transfer payment are discharge status codes
				02, 05, 62, 63, 65, 66, 82, 85, 90, 91, 93, and 94;
(F) if the actual length of stay plus one is
				less than the national average length of stay and the discharge status code on
				the claim is one specified by the department to trigger the transfer
				adjustment, the transfer adjustment calculation is as follows:
(DRG base payment / national average length of stay) *
				  (actual length of stay + 1) = transfer-adjusted allowed
				  amount;
(9) the
				department will make outlier payments for high-cost cases; in order to receive
				an outlier payment, the estimated financial loss to a hospital must exceed a
				threshold, calculated by the department, that aims to result in outlier
				payments between five percent and 15 percent of total payments; the department
				will multiply amounts in excess of that threshold by a marginal cost
				percentage, as follows, to calculate outlier payments:
(A) estimated cost is calculated as: charges
				* cost-to-charge ratio = estimated cost;
(B) estimated gain or loss is calculated as:
				DRG base payment (or transfer-adjusted allowed amount if applicable) -
				estimated cost = estimated gain or loss;
(C) if estimated loss is greater than the
				cost outlier threshold, the claim qualifies for an outlier payment; the
				department will publish the cost outlier threshold value on the department's
				website;
(D) the outlier payment is
				calculated as: (estimated loss - cost outlier threshold) * outlier payment
				percentage = cost outlier payment;
(E) outlier payments are added to the DRG
				base payment, or transfer-adjusted allowed amount if applicable;
(10) the department will utilize a
				cost-to-charge ratio in the calculation of outlier payments; the department
				will assign a hospital-specific cost-to-charge ratio to in-state general acute
				care hospitals and designated border hospitals; the department will assign the
				in-state average cost-to-charge ratio to all other out-of-state
				hospitals;
(11) the department will
				adjust the DRG base rate for an in-state teaching hospital for direct medical
				education costs reported on the Medicare hospital cost report; the specific
				criteria and methodology for teaching hospital base rate adjustments are
				described in the
Alaska Provider Billing Manual,
adopted by
				reference in
				7 AAC 160.900;
(12) the APR DRG base payment is calculated
				by multiplying the hospital's base rate by the relative weight and each policy
				adjustor; transfer adjustments and outlier payment calculations follow this
				initial calculation;
(13) the
				department will reimburse all services, supplies, and devices provided during
				an inpatient stay through the DRG payment; however, the department may make a
				payment in addition to the DRG payment for
(A)
				a quality incentive program; or
(B)
				another initiative adopted by regulation under the Administrative Procedure Act
				(AS 44.62).