Newborn Payment Policy for Acute Care General Hospitals [42 Pa.B. 1005]
[Saturday, February 18, 2012]The Department of Public Welfare (Department) is announcing its intent to amend the provisions of the Commonwealth's Medicaid State Plan and current Medical Assistance (MA) Program regulations in 55 Pa. Code Chapter 1163, Subchapter A (relating to acute care general hospitals under the prospective payment system).
On July 1, 2011, the General Assembly enacted the act of June 30, 2011 (P. L. 89, No. 22) (Act 22), which amended the Public Welfare Code (code) (62 P. S §§ 101—1503). Act 22 added several provisions to the code, including section 403.1 (62 P. S. § 403.1). Section 403.1(a)(4), (c) and (d) of the code authorizes the Department to promulgate final-omitted regulations under section 204(1)(iv) of the Commonwealth Documents Law (CDL)1 to establish or revise provider payment rates or fee schedules, reimbursement models or payment methodologies for particular services. In addition, to ensure that the Department's expenditures for State Fiscal Year (FY) 2011-2012 do not exceed the aggregate amount appropriated by the General Assembly, section 403.1 of the code expressly exempts these regulations from the Regulatory Review Act (71 P. S. §§ 745.1—745.12), section 205 of the CDL (45 P. S. § 1205) and section 204(b) of the Commonwealth Attorneys Act (71 P. S. § 732-204(b)).
Under section 403.1 of the code, the Department intends to submit a State Plan Amendment and promulgate final-omitted regulations amending 55 Pa. Code §§ 1163.2, 1163.51 and 1163.52 (relating to definitions; general payment policy; and prospective payment methodology) to revise the MA payment policy for normal newborn births as follows:
• Add a definition for a ''normal newborn.''
• Provide for the single MA payment for the inpatient care related to the mother's delivery of a normal newborn.
The Department currently makes two MA All Patient Refined-Diagnosis Related Groups (APR-DRG) payments to a hospital relating to a mother's admission for the delivery of a newborn: one APR-DRG payment for the mother's inpatient stay and another for the newborn's inpatient stay. For FY 2010-2011, on average, the Department made an MA APR-DRG payment of $5,712 for vaginal or cesarean section deliveries and an MA APR-DRG payment of $1,155 for the inpatient stays of the normal newborns, resulting in a total average MA APR-DRG payment to the hospital of $6,867.
Some commercial insurers, as well as several Medicaid programs in other states, pay hospitals a single payment for both the mother's obstetrical delivery and the normal newborn nursery care, rather than two separate payments for the mother and normal newborn. The Department surveyed three health plans that cover a large percentage of commercial lives throughout this Commonwealth. Two of these health plans typically pay only one DRG for the mother's delivery and the newborn care. Both health plans, however, pay separately for medically necessary newborn care in the neonatal intensive care unit (NICU), or when the newborn's stay exceeds 3 days or the DRG trim point for the mother's delivery. The third plan varies its payment and pays either a single DRG, or separate payments for the mother's delivery and newborn care, depending on the particular hospital contracts involved.
The Department also surveyed several states concerning their Medicaid payment methodology for these services. Some states make a global payment for both the mother's delivery and normal newborn care; however, these states make separate payments to the hospital for newborns who are detained in the NICU or newborn nursery after the mother is discharged. Other states make separate payments to the hospital for both the mother's delivery and newborn care, similar to the Department's current practice.
Depending on their provider specific contracts, the Department's MA managed care organizations (MCO) pay hospitals on average either an all-inclusive payment of $3,745 for the delivery and newborn care or separate payments with an average total payment of $4,884 ($3,578 for the delivery and $1,306 for the newborn care). Under either payment method, on average, the Department's MCO payment for delivery and newborn care is significantly less than the Department's current average MA fee-for-service payment for the mother's delivery alone.
The Department intends to eliminate the separate MA APR-DRG payment to hospitals for the normal newborn's care. Hospitals will instead receive a single APR-DRG payment for the mother's delivery and for the inpatient stay of a normal newborn. In the event the newborn stays in the NICU or experiences other complications not associated with normal newborn care, the hospital will receive separate APR-DRG payment for the delivery and newborn care.
The Department intends to make these changes effective with dates of discharge on and after April 1, 2012.
Fiscal Impact
The FY 2011-2012 fiscal impact, as a result of amending the newborn payment regulation is a savings of $0.964 million ($0.433 million in State funds and $0.531 million in Federal funds) upon approval by the Centers for Medicare and Medicaid Services.
Public Comment
Interested persons are invited to submit written comments regarding this notice to the Department of Public Welfare, Office of Medical Assistance Programs, c/o Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120. Comments received within 15 days will be reviewed and considered in the development of the State Plan Amendment and regulations.
Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
GARY D. ALEXANDER,
SecretaryFiscal Note: 14-NOT-740. No fiscal impact; (8) recommends adoption.
[Pa.B. Doc. No. 12-303. Filed for public inspection February 17, 2012, 9:00 a.m.] _______
1 The act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. § 1204(1)(iv)). Section 204(1)(iv) of the CDL authorizes an agency to omit or modify notice of proposed rulemaking when a regulation relates to Commonwealth grants or benefits. The MA Program is a Commonwealth grant program through which eligible recipients receive coverage of certain health care benefits, including inpatient hospital services.
