Code of Massachusetts Regulations › 114 CMR - DIVISION OF HEALTH CARE FINANCE AND POLICY › Title 114.5 CMR 23.00 - PAYER REPORTING OF TOTAL MEDICAL EXPENSES AND RELATIVE PRICES › Section 23.05 - Methodology for Reporting Relative Prices

Current through Register 1525, July 5, 2024
(1)
Relative Prices for Hospitals.
(a) Payers must report Relative Price data
			 separately by Medicare, Medicaid, Commonwealth Care, and commercial
			 (fully-insured and self-insured).
(b) Payers shall report hospital categories
			 separately for inpatient and outpatient.
(c) Payers must report Relative Price data
			 separately by hospital category for acute hospitals, chronic hospitals,
			 rehabilitation hospitals, and psychiatric hospitals.
(d) Notwithstanding 114. 5 CMR 23.05(1)(c),
			 Payers shall report additional behavioral health-only Relative Price data for
			 acute hospitals with psychiatric or substance abuse units with the psychiatric
			 hospital file. Payers must develop a standard definition of behavioral health
			 services to be used for all acute hospitals impacted by this
			 subsection.
(e)
Required Data Elements - Hospital Inpatient
.
1. DHCFP Provider Number
2. OrgID or Payer's Internal Provider
			 Number
3. Name of
			 Hospital
4. Insurance Category
			 (Medicare, Medicaid, Commonwealth Care, or commercial)
5. Product Type (HMO, PPO, Indemnity, POS,
			 other)
6.
Hospital-specific Base Rate
: the negotiated rate per
			 discharge, excluding any adjustments for case mix or severity of illness.
			 Payers must note when Hospital-Specific Base Rates are derived from payment
			 data.
a. For acute hospitals that are not paid
			 on diagnostic-related group (DRG) model, the Payer must calculate a
			 hospital-specific base rate equivalent. Payers who are able to demonstrate
			 significant hardship in developing acute hospital DRG base rates and obtaining
			 DRG software may apply to the Division for a waiver to use a standard per unit
			 rate.
b. For chronic,
			 rehabilitation, or psychiatric hospitals, Payers may use a per unit rate so
			 long as a uniform unit is applied within each hospital category.
7.
Network Average
			 Base Rate
: the simple average of the Hospital-specific Base Rate
			 for all hospitals within a Payer's network.
8.
Total Non-claims
			 Payments
: the sum of all Non-Claims Related Payments. The
			 allocation method for non-claims payments is outlined in the Data
			 Specifications Manual.
9.
Total Payments
: the sum of all medical claims
			 payments.
10.
Case
			 Mix
: the Payer's case mix index for the provider including all
			 cases.
11.
Number of
			 Discharges
: the total number of discharges associated with a
			 provider.
12.
Hospital-specific Product Mix
: the proportion of the
			 hospital's inpatient payments for HMO, PPO, Indemnity, POS, and other
			 Massachusetts provider network products.
13.
Network-wide Product
			 Mix
: the proportion of the Payer's payments for HMO, PPO,
			 Indemnity, POS, and other Massachusetts provider network products.
14. DRG version and group number used in
			 calculation.
(f)
Calculation of Relative Prices - Hospital Inpatient
.
			 Based upon the data specified in 114. 5 CMR 23.05(1)(e) the Division shall
			 calculate Hospital Inpatient Relative Prices by dividing Total Payments by the
			 product of Case Mix and Number of Discharges to derive an Adjusted Base Rate.
			 The sum of the products of the Adjusted Base Rate by the Network-wide Product
			 Mix will produce the Hospital Product Adjusted Base Rate. The Hospital's
			 Product Adjusted Base Rate divided by Payer's Network Average Product Adjusted
			 Base Rate shall result in the Hospital's Inpatient Relative Price. Payers will
			 be provided a copy of the calculation.
(g)
Required Data Elements -
			 Hospital Outpatient
.
1. DHCFP
			 Provider Number
2. OrgID or Payer's
			 Internal Provider Number
3. Name of
			 Hospital
4. Insurance Category
			 (Medicare, Medicaid, Commonwealth Care, or commercial)
5. Product Type (HMO, PPO, Indemnity, POS,
			 other)
6.
Hospital-specific Service Multipliers
: the negotiated
			 fee schedule multipliers for each hospital, for each fee schedule category as
			 determined by the Payer, for each product. For hospitals paid on a non-fee
			 schedule basis, multipliers shall be derived by dividing payments for a service
			 category by the amount that would have been paid if the hospital was paid at a
			 standard fee schedule or base rate for that service category. Payers must note
			 when Hospital-specific Service Multipliers are derived from payment
			 data.
7.
Total
			 Claims-based Payments
: the sum of all medical claims
			 payments.
8.
Total
			 Non-claims Payments
: the sum of all Non-Claims Related Payments.
			 The allocation method for non-claims payments is outlined in the Data
			 Specifications Manual.
9.
Hospital-specific Service Mix
: the proportion of the
			 hospital's revenue for outpatient categories established by the Payer in 114. 5
			 CMR 23.05(1)(g)6.
10.
Network-wide Service Mix
: the proportion of the
			 Payer's payments for outpatient categories established by the Payer in 114. 5
			 CMR 23.05(1)(g)6.
11.
Hospital-specific Product Mix
: the proportion of the
			 hospital's outpatient payments for HMO, PPO, Indemnity, POS, and other
			 Massachusetts provider network products.
12.
Network-wide Product
			 Mix
: the proportion of the Payer's payments for HMO, PPO,
			 Indemnity, POS, and other Massachusetts provider network products.
(h)
Calculation of
			 Relative Prices - Hospital Outpatient
. Hospital Outpatient
			 Relative Prices shall be calculated by the Division by summing the products of
			 the Hospital-specific Service Multiplier for each product type by the
			 Network-wide Service Mix for that product type to derive a Base Service
			 Weighted Multiplier. The sum of the products of the Base Service Weighted
			 Multiplier for each product type and the Network-wide Product Mix shall produce
			 the Base Service and Product Adjusted Multiplier. The Division shall derive a
			 Non-Claims Multiplier of each product for each hospital by dividing non-claims
			 payments by total claims payments and multiplying the result by the Base
			 Service Weighted Multiplier. The sum of the products of the Non-claims
			 Multiplier and the Network Average Product Mix shall produce the
			 Product-adjusted Non-claims Multiplier. The sum of the Product-adjusted
			 Non-claims Multiplier and the Base Service and Product Adjusted Multiplier
			 divided by the Network Average Hospital Outpatient Multiplier shall result in
			 the Hospital's Outpatient Relative Price. Payers will be provided a copy of the
			 calculation.