masshealth reimbursement principles

1. Mar. 22, 2010 MA HDC Meeting 1

2. Mar. 22, 2010 MA HDC Meeting 2

3. Mar. 22, 2010 MA HDC Meeting 3 Encourage efficiency and economy Use sound reimbursement methods to reasonably compensate all hospitals Maintain access and quality of care Comply with all applicable state and federal payment requirements

4. Mar. 22, 2010 MA HDC Meeting 4 MassHealth Federal Limitations Upper Payment Limit (UPL) on Medicaid Rates � not to exceed amounts payable using Medicare payment principles Safety Net Care (SNC)� Replaces federal Disproportionate Share Hospital (DSH) Payments and Limits Budget Neutrality � Waiver costs cannot exceed costs absent a waiver

5. Mar. 22, 2010 MA HDC Meeting 5 Acute Inpatient Methodology: (Standard Payment Amount per Discharge) SPAD covers a 20 day stay The Hospital�Specific SPAD is based on hospital reported costs (submitted on the DHCFP 403 cost report) and consists of: Statewide average payment amount per discharge adjusted by an efficiency standard and then for wage area differences, hospital-specific casemix and an operating cost inflation factor A per discharge payment for hospital-specific expenses for malpractice insurance and organ acquisition A per discharge payment amount for capital cost, adjusted by hospital-specific casemix and by a capital inflation factor

6. Mar. 22, 2010 MA HDC Meeting 6 Acute Hospital Outpatient Methodology

7. Mar. 22, 2010 MA HDC Meeting 7 PAPE (Payment Amount Per Episode) Hospital Specific Episodic Payment Methodology Per Patient/Per Day Based on 3M Ambulatory Patient Group (APG) bundling Utilizes cost-based weights that capture resource intensity and applies a forcasted trend to the monthly average PAPE Covers most outpatient services Outpatient departments (OPDs) Hospital Licensed Health Centers (HLHCs) Hospital Satellite Clinics PAPE doesn�t cover Laboratory services, professional services and other specified services paid though DHCFP fee schedules

8. Mar. 22, 2010 MA HDC Meeting 8 PAPE The Statewide Standard is derived from the Total APG payment For Base Year Inflated to Hospital Rate Year Based on Ambulatory Patient Group (APG) Payment and Episodes Exclude Lab Services Utilize Cost-to-Charge Ratios (CCR) to Price Outliers 1-day Episodes PAPE = Forecasted Average APG Weight x Statewide Standard

9. Mar. 22, 2010 MA HDC Meeting 9 Interpreter Services Interpreter Services costs are captured in the payment methodologies, in the same manner as nurses, x-ray technologists, pharmacists, dieticians, and the costs of other hospital personnel, in support of providing patient care services These costs are reported on the hospital cost reports, are in the cost-based weights and are therefore included in the hospital specific payment rates.

10. Mar. 22, 2010 MA HDC Meeting 10 Coverage Consistent with other Payers Representatives of the payers in the workgroup also noted that their hospital contracted rates cover the provision of Interpreter services

11. Mar. 22, 2010 MA HDC Meeting 11 Future Decision Points for HDC (to-date) Sustainability of effort, ongoing monitoring. Potential for instituting registration process for medical interpreters. Registration would allow us to have, within the state�s domain, a repository of all certified medical interpreters who are practicing in MA, similar to the registry within the Commission for the Deaf and Hard of Hearing.� G.L. c.6 s.196. (interpreter referral service).

12. Mar. 22, 2010 MA HDC Meeting 12

13. Mar. 22, 2010 MA HDC Meeting 13 March � April 2010 Agenda March 24, 2010 � Mtg #7 (Reimbursement-Part II) Finalize reimbursement recommendation(s) April 28, 2010 � Mtg #8 Review, modify finalize full set of recommendations