Code of Maine Rules › 10 - DEPARTMENT OF HEALTH AND HUMAN SERVICES › 144 - DEPARTMENT OF HEALTH AND HUMAN SERVICES - GENERAL › Chapter 101 - MAINECARE BENEFITS MANUAL (FORMERLY MAINE MEDICAL ASSISTANCE MANUAL) › Chapter III - Allowances for Services › Section 144-101-III-45 - HOSPITAL SERVICES › Appendix 144-101-III-45-A - DRG-BASED PAYMENT METHODOLOGY

Current through 2024-29, July 17, 2024
Effective July 1, 2011 (SFY 2012):
I. The Department has adopted the Medicare Severity
						Diagnosis Related Groups as described at
www.cms.gov/AcuteInpatientPPS/
.
II. The Department will calculate reimbursement for a
						covered inpatient service using the following formula:
(The hospital specific base rate multiplied by the DRG
						relative weight) plus an outlier payment (if applicable)
III.
Hospital Specific Base Rate
						Calculation
Each hospital specific base rate is the total of 3
						components:
statewide DRG direct care rate
											hospital-specific capital rate
											hospital-specific medical education rate
IV.
DRG Direct Care Rate Calculations
The statewide DRG direct care rate for all hospitals
						being paid under the DRG system is as follows:
Multiplies each hospital-specific base DRG rate by
						  the number of discharges of each hospital, resulting in a total direct care
						  payment for each hospital
											Sums the total direct care payment for each
						  hospital
											Divides this sum by the total number of
						  discharges
The hospital-specific DRG direct care rate used in the
						calculation of the statewide DRG direct care rate for July 1, 2011 is
						calculated as follows:
divides the hospital's SFY 10 discharge rate by the
						  hospital's case mix index (the average relative weight of a hospital's base
						  year claims, which equals the sum of the relative weights for all applicable
						  discharges divided by the total number of discharges calculated using calendar
						  year 2007 discharges)
											inflates this figure to SFY 11
The DRG direct care rate component of the DRG-based rate
						payment is not settled during the cost settlement process.
V.
Hospital Specific Capital Rate
						Calculation
The hospital specific capital rate is calculated by
						allocating estimated capital costs over estimated discharges. Using data from
						hospital fiscal year 2008 cost reports, estimated capital costs are derived by
						applying capital cost to charge ratios to total charges, and trending that
						amount to state fiscal year 2011 using a five and five tenths percent (5.5%)
						annual trend rate. These rates will be hospital specific for all years.
The capital rate component of the DRG-based rate payment
						is settled during the cost settlement process.
VI.
Hospital Specific Medical Education Rate
						Calculation
The hospital specific medical education rate (including
						direct and indirect medical education) is calculated by allocating estimated
						education costs over estimated discharges. Using data from hospital fiscal year
						2008 as filed Medicare cost reports, estimated costs are derived by trending
						medical education costs to state fiscal year 2011 using a two and five tenths
						percent (2.5%) annual trend rate. These rates will be hospital specific for all
						years.
The medical education rate component of the DRG-based
						rate payment is settled during the cost settlement process.
VII.
DRG Relative Weight Calculation
The relative weighting factor is assigned by the
						Department to represent the time and resources associated with providing
						services for that diagnosis related group. As described below, the Department
						calculated preliminary weights for each DRG, and then normalizes each weight to
						ensure that the statewide case mix index for applicable claims equals 1.0. The
						Department calculates relative weights using claims from critical access
						hospitals, non-critical access acute care hospitals and hospitals reclassified
						to a different Medicare geographic access area. The calculation does not
						include data from rehabilitation hospitals. Days awaiting placement in swing
						beds were taken into account when calculating relative weights.
a.
DRGs with at least 10 admissions
The Department calculates preliminary weights for DRGs
						with at least 10 admissions by:
Grouping base year claims for all hospitals
						  described above by DRG
											For each DRG, the Department
* Sums base year charges per claim
* Divides this sum by the number of claims in the DRG to
						obtain an average charge per claim for this DRG
* Divides this DRG-specific average by the average base
						year charge per claim for all applicable claims
b.
DRGs with fewer than 10 admissions
If there are fewer than 10 cases for a DRG, the
						Department adjusts the MS-DRG relative weight by multiplying the relative
						MS-DRG weight by an "adjustment factor." This adjustment factor is developed
						by:
Calculating the case mix index for all DRGs with at
						  least 10 admissions using MaineCare charges as described above (for example
						  1.5)
											Calculating the case mix index for all DRGs with at
						  least 10 admissions using MS-DRG (for example 1.2)
											Calculating the ratio of the MS-DRG derived weight
						  to the charged-based rate (in this example this factor would equal 1.5/1.2 or
						  1.25)
c.
Normalization
The resulting weights for all DRGs are then normalized to
						result in a weighted average case mix of 1.0. This is done by calculating the
						preliminary case mix index (CMI) for all applicable claims (for example 1.25)
						and then multiplying each individual case weight by the inverse of this global
						CMI (in this example equal to 0.8).
VIII. *
Transfer to a Distinct Unit in the Same
						Hospital
Effective July 1, 2023, notwithstanding the definition of
						a discharge in 45.01 above, a hospital may bill for two distinct episodes of
						care for a patient who is transferred between an acute care unit and a distinct
						rehabilitation, psychiatric, or substance use disorder unit in the same
						hospital. For a patient transferred to a distinct rehabilitation unit, the
						Department will reimburse the hospital one DRG-based discharge rate for the
						episode of acute care and one DRG based discharge rate for the rehabilitation
						episode of care. For a patient transferred to a distinct psychiatric or
						substance use disorder unit, the Department will reimburse the hospital one
						DRG-based discharge rate for the episode of acute care and one payment rate for
						Distinct Psychiatric Units and Distinct Substance Use Disorder Units for the
						distinct unit episode of care.
*
The Department shall submit to CMS and
						anticipates approval for a State Plan Amendment related to these
						provisions.
IX.
Outlier Adjustment Calculation
An outlier payment adjustment is made to the rate when an
						unusually high level of resources has been used for a case. An outlier payment
						is triggered when the result of the following equation is greater than
						zero:
(charges multiplied by the hospital-specific cost to
						charge ratio) minus the outlier threshold minus DRG-based discharge
						rate)
The payment is equal to eighty percent (80%) of the
						resulting value.
The outlier threshold is equal to the value that ensures
						that five percent (5%) of payments related to DRG-based discharge rates are
						outlier adjustment payments.
In no instance is a reduction made to the rates for cases
						with unusually low costs or charges.