On April 14, the Hospital Advisory IPPS Subcommittee met and the Department of Community Health presented their plan to update the inpatient methodology for ICD 10 and other policy changes. The major guideline the Department must use is budget neutrality because there is no additional funding available for the current programs. The major changes within the rate calculations are:

  • updating the Tricare grouper,
  • moving capital cost from an add on item to be included with operating cost to establish the base rate,
  • moving medical education reimbursement into a separate pool outside of patient claim payments,
  • automating the outlier payment process,
  • adding an Indirect Medical Education factor to the base rate, and
  • adding a Medicaid utilization factor to the base rate.

These changes will be phased into the payment process throughout State Fiscal Years 2016 and 2017 beginning on July 1, 2015. During this phase in period, the Department will apply a Stop Gain or Loss factor to all providers to allow these changes to be understood without the direct financial impacts.

Around April 21, 2015, the Department will provide each hospital with an analysis of these impacts on their current Medicaid inpatient rates. As these changes could have a significant change in your future Medicaid payments, please let us know if you need our help reviewing or understanding the factors of your rate calculation.