DEPARTMENT OF PUBLIC WELFARE [ 55 PA. CODE CH. 1163 ] Newborn Payment Policy for Acute Care General Hospitals [42 Pa.B. 2023]
[Saturday, April 14, 2012]The Department of Public Welfare (Department) amends Chapter 1163 (relating to inpatient hospital services) to read as set forth in Annex A under the authority in sections 201(2), 403(b) and 403.1 of the Public Welfare Code (code) (62 P. S. §§ 201(2), 403(b) and 403.1), as amended by the act of June 30, 2011 (P. L. 89, No. 22) (Act 22).
Omission of Proposed Rulemaking
On July 1, 2011, the General Assembly enacted Act 22, which amended the code. Act 22 added several new provisions to the code, including section 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 act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. § 1204(1)(iv)), known as the Commonwealth Documents Law (CDL), to establish or revise provider payment rates or fee schedules, reimbursement models or payment methodologies for particular services. 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 Medical Assistance (MA) Program is a Commonwealth grant program through which eligible recipients receive coverage of certain health care benefits, including inpatient hospital 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)).
The Department is amending Chapter 1163 in accordance with section 403.1 of the code because this final-omitted rulemaking pertains to the revision of MA provider payment rates and methodologies for inpatient acute general hospital services.
Additionally, section 204(3) of the CDL provides authority for an agency to omit notice of proposed rulemaking when impracticable or unnecessary. Notice of proposed rulemaking is impracticable and unnecessary for the amendments to § 1163.57(a) and (b) (relating to payment policy for readmissions) because Act 22 statutorily amended the readmission time period to 30 days. See section 443.9 of the code (62 P. S. § 443.9). The Department is amending Chapter 1163 to conform the regulations to the Act 22 requirements for inpatient readmissions to acute care general hospitals.
Purpose
The purpose of this final-omitted rulemaking is to amend Chapter 1163, Subchapter A (relating to acute care general hospitals under the prospective payment system) to restructure the inpatient payment for normal newborn care for MA births in inpatient acute care general hospitals. For normal newborn care, the Department will make one payment for inpatient services related to the mother's obstetrical delivery using the All Patient Refined (APR) Diagnosis Related Group (DRG) payment.
Additionally, the Department is amending regulations regarding its payment policy for readmissions to an inpatient acute care general hospital to increase the readmission time period from 7 to 30 days of the date of previous discharge. See section 443.9 of the code.
Background
The Department administers the MA Program under Title XIX of the Social Security Act (act) (42 U.S.C.A. §§ 1396—1396w-5). The MA Program provides a continuum of physical and behavioral health services, including long-term care, inpatient hospital, pharmacy, outpatient services, such as physician, podiatry, medical and psychiatric clinics, chiropractic and dental service, and medical supplies and durable medical equipment to approximately 2.1 million MA recipients.
In an effort to address the current budget constraints, the Department has taken steps to implement a series of initiatives aimed at reducing costs while still providing needed care to MA recipients, including limiting pharmacy benefits for recipients 21 years of age and older and by limiting certain dental benefits for recipients 21 years of age and older. Despite these and other cost savings efforts, the Department was compelled to identify additional ways to achieve the necessary cost savings. The Department determined that changing the payment method for normal newborn care will produce savings with the least impact on services and care provided to MA recipients.
Public Process
The Department published advance public notice at 42 Pa.B. 1005 (February 18, 2012) announcing its intent to amend the MA payment policy for normal newborn births. The Department invited interested persons to comment. In addition, the Department discussed these payment amendments with the Medical Assistance Advisory Committee at its February 23, 2012, meeting.
The Department also posted the draft regulation on the Department's web site on February 24, 2012, with a 15-day comment period. The Department again invited interested persons to submit written comments regarding the regulation to the Department. The Department received 19 topically-related comments from 27 commentators. The Department also discussed the Act 22 regulations and responded to questions at the House Health Committee hearing on March 8, 2012.
The Department considered the comments received in response to the draft regulation. For the following reasons, the Department decided to maintain the policies as provided in the draft regulation.
Discussion of Comments
Following is a summary of the major comments received within the public comment period and the Department's response to the comments.
Comment
Several commentators stated that the elimination of a normal newborn payment will increase the chance of poor newborn outcomes, such as children who are impaired before or during birth. One commentator noted that eliminating the Fee-for-Service (FFS) payment for normal newborn births undermines the historical mission of the Medicaid program, which is a program for pregnant women and newborns.
Response
The Department disagrees that restructuring the inpatient payment for normal newborns will increase the chance of poor newborn outcomes. Newborn outcomes are generally attributed to the quality of obstetrical and delivery services and the Department is not changing its payment policy for prenatal care or obstetrical deliveries. The Department will continue to pay for inpatient hospitalizations and high cost outliers for neonates that are not normal newborns. The Department will also pay for newborn inpatient hospitalizations when the Department does not make an APR-DRG payment for the mother's obstetrical delivery. The Department will monitor outcomes to ensure that there are not unintended consequences regarding the health of mothers and their newborns.
Comment
Several commentators noted that ''normal newborn'' is not defined consistent with the APR-DRG classification system.
Response
The Department disagrees. The Department believes that the regulatory definition of ''normal newborn'' is consistent with and specific to APR-DRG 640 with a severity of illness level 1.
Comment
One commentator noted that the payment change conflicts with the Federal requirement to pay for mandatory Medicaid services. Normal newborns covered by Medicaid are entitled to mandatory services. Inpatient hospital care is a mandatory service.
Response
MA coverage for eligible normal newborns includes inpatient hospital services, which is a mandatory class of service under Federal Medicaid rules. Federal rules allow states to establish limitations on payment under the state Medicaid Plan, subject to Federal approval.
Comment
Some commentators expressed access to care concerns in that the change in the inpatient newborn payment will continue the loss of access to obstetrical and newborn services. Another commentator expressed concern regarding the comparison of the Department's payment to other payers without an access to care analysis. The commentator also inquired whether the Department had historic access data concerning the availability of birthing services and newborn care for Medicaid recipients.
Response
The change in the payment for normal newborns will not create a loss of access to obstetrical and newborn services. Access to obstetrical and newborn inpatient care was maintained through the old DRG payment system, under which hospitals received less payment for both the mother's and newborn's care, than is currently paid under the APR-DRG payment system for the mother's obstetrical delivery. For years, under the ACCESS Plus Program and managed care delivery system, consumer responses to the Department's ''Consumer Assessment of Healthcare Providers and Systems'' (CAHPS) survey demonstrate sustained satisfaction regarding access to health care, satisfaction with specialist care, getting the appropriate needed care and obtaining care quickly. The Department's CAHPS surveys were completed, in part, by women who had obstetrical deliveries. Through the use of Healthcare Effectiveness Data and Information Set and similar tools, the Department has monitored obstetrical services for both the FFS ACCESS Plus Program and the HealthChoices Program, the Department's mandatory managed care program. The Department will continue to monitor both outpatient and inpatient obstetrical services, including access.
Even with the change to the normal newborn payment policy, the APR-DRG system provides a significant increase in the total payment for the episode of care as compared to the prior DRG payments for both the mother's delivery and the newborn's hospitalization.
Comment
Several commentators noted that the notice published at 42 Pa.B. 1005 did not include a substantive analysis of the costs of newborn care, which requires specifically trained staff, infant supplies and mandated testing and screening, all of which hospitals shall provide even absent payment.
Response
The current MA payment policy for inpatient services is not cost based and neither is the payment methodology under this final-omitted rulemaking. Based on the Department's findings, hospitals are accepting payments from the MA managed care plans for the mother's delivery and normal newborn care (whether separate or combined) that are lower than the total payments for both the mother's delivery and the normal newborn's care made under the FFS delivery system. The Department determined that even with the change in the normal newborn payment, the APR-DRG system provides a significant increase in the total payment for the episode of care as compared to the previous DRG payments for both the mother's delivery and the newborn's hospitalization.
Comment
Multiple commentators expressed concern regarding the impact of the policy change on the qualification for and payment of Disproportionate Share Hospital (DSH) payments for both the MA and Medicare Programs. Commentators expressed concern that the data associated with inpatient newborn care will not be considered in determining a hospital's DSH qualification or payments, shifting DSH payments to hospitals not providing birthing services. Commentators also noted that MA births represent a large category of MA admissions and the potential impact of the change can be substantial.
Response
The Department acknowledges the concern about DSH qualification and payment calculations regarding the MA Program. The Department does not foresee that this policy change will affect a hospital's DSH qualification or payment or that it will result in a shift of DSH payments to providers who do not provide birthing services. For those DSH payments in which normal newborn data was previously used, the Department will use cost reports and develop other data sources, as necessary, to ensure that normal newborn days and payments are appropriately accounted for in DSH eligibility and payment calculations. In addition, the majority of FY 2011-12 and FY 2012-13 DSH payment programs under MA will not be affected by this change in payment policy since eligibility and payment distribution methodologies rely on historic utilization data.
Comment
Several commentators noted that the current APR-DRG relative payment for obstetrical and newborn care already is lower than payment made under the previously used Centers for Medicare and Medicaid Services (CMS) DRGs and that the Department is actually paying less for the delivery and newborn care inpatient services relative to other inpatient services. Further, the relative value for what has been defined as normal newborn care under the APR-DRG is less than the relative value for this care under the CMS DRG system. Commentators suggest that not paying for the care hospitals provide to newborns removes the actuarial soundness of the entire DRG system by removing payment without adjusting payments or costs made for the mother.
Response
The payment made under the APR-DRG system is not calculated solely using the relative weight of the APR-DRG. Along with the implementation of APR-DRGs, hospitals received an increase in their base payment rates which also affects payment for inpatient services
The change in the payment for newborn inpatient services does not remove the actuarial soundness of the entire APR-DRG system. The Department determined that even with this payment change, the APR-DRG system provides a significant increase in the total payment for the episode of care from payment under the CMS DRG-based system. The Department will monitor the APR-DRG payments and the relative values for unintended consequences.
Comment
Several commentators also expressed concern regarding the relative value calculation for the APR-DRG system. Because births are the most prevalent DRG and the relative value assigned to APR-DRG 640.1 is an integral component of the calibration of APR-DRG relative values, the Department must recalibrate remaining APR-DRGs to account for this change. Otherwise, the Department will realize significant additional savings by underpaying all other cases.
Response
The Department recognizes the concern and will continue to monitor the appropriateness of relative weights moving forward. The assignment of relative weights, however, is distinct from the newborn payment policy.
Comment
Several commentators noted that the APR-DRG system enables the MA Program to group care categories and develop payments based on resource use and patient intensity, as well as to enable the Department to monitor care. The removal of the normal newborn payment inappropriately distorts the classification system that was designed to match resource use with patient needs.
Response
The Department's analysis shows that under the FFS delivery system, the MA Program is paying significantly more for the mother's delivery and normal newborn care than the global or separate payments made for the mother's delivery and normal newborn care under the MA managed care delivery system.
Comment
Several commentators suggested that the Department surveyed a limited number of health plans and states and that a single payment for the care of the mother during delivery and postpartum and the newborn are not common place. Rather, MA managed care organizations (MCO) and commercial health plans use a variety of payment means, including separate payments. When payments are combined in a singular case rate, there are clear criteria for what costs are incorporated into the single rate and what criteria constitute normal newborn.
Commentators also noted that the Department compares the combined payment for a delivery and normal newborn made under the MA FFS program, with the total payment made by MA MCOs. Commentators state this comparison is faulty because MCO payments were not based on the higher FFS rates or the APR-DRG grouping system. Commentators further added that MCO payments for hospital care would be higher than that of the MA FFS program, in recognition that patients would be managed more effectively.
Response
While the payment change will result in smaller MA FFS payment for the inpatient stay of a mother and her normal newborn, based on the Department's findings, hospitals are accepting payments from the MA MCOs for the mother's delivery and normal newborn care (whether separate or combined) that are lower than the MA FFS payments for mother's delivery alone. Even with the change in the normal newborn payment, the APR-DRG system provides a significant increase in the total payment for the episode of care as compared to the prior DRG payments for both the mother's delivery and the newborn's hospitalization. This new payment policy more closely aligns payment into the range of MA MCOs.
With the change to APR-DRGs, the per-admission average inpatient payment increased 33% under the FFS delivery system. After restructuring the normal newborn payments, the FFS payments will still be, on average, 31% higher on a per admission basis than under the DRG system. Over the same period of time, the MCO per admission payments increased by 0.65%.
Comment
Several commentators noted that the newborn payment policy does not address the interrelationship of the FFS program and the State's mandatory MA MCO program. The MA MCO programs are required to adhere to the FFS program payment policies. Commentators stated that removing the newborn payment will result in a further negative financial impact for hospitals providing care under the MA MCO program.
Response
The MA MCOs are not required to pay in the same manner as the MA Program and there is not a requirement for the MA MCOs to adopt any aspect of this payment change.
Comment
Multiple commentators suggested the payment policy does not clearly reflect the total potential financial impact (including State and Federal funds) on hospitals. Several commentators also noted that it is not clear how the Department arrived at the estimated savings. There is concern that the fiscal impact will be far greater than the Department's estimate of $18 million.
Response
The Department's analysis shows that MA is paying significantly more for the mother's delivery and normal newborn care than other payers. The new payment policy more closely aligns payment into the range of MA MCOs.
The Department calculated the number of newborns who met ''normal'' definition in recent historical claims data, projected the number of normal newborns for current and next fiscal year and multiplied by the average current normal newborn payment.
Comment
One commentator noted that this policy unfairly impacts safety net hospitals, both in rural and urban areas. Hospitals will need to evaluate their ability to continue providing birthing services.
Response
The Department disagrees that this policy unfairly targets those hospitals in rural Pennsylvania and that there is any disproportionate impact on safety net hospitals. This payment policy applies to all acute care general hospitals. The Department's analysis shows that under the FFS delivery system, the MA Program is paying significantly more for the mother's delivery and normal newborn care than other payers. The new payment policy more closely aligns payment into the range of MA MCOs.
Comment
One commentator noted concern about the Department's authority under Act 22 to continue the proposed change beyond July 1, 2012.
Response
Act 22 authorizes the Department to promulgate final-omitted regulations that revise payment rates. To ensure that the Department's expenditures for State FY 2011-2012 do not exceed the amount appropriated by the General Assembly, these regulations are exempt from the Regulatory Review Act, section 205 of the CDL and section 204(b) of the Commonwealth Attorneys Act. There is nothing in Act 22 that precludes the promulgation of final-omitted regulations that will have an impact in State FY 2011-2012 and in future years.
Comment
Several commentators stated that the Department did not allow sufficient time for review and comment of the regulations.
Response
The Department engaged in a transparent public process through which the Department solicited and received numerous comments and input from stakeholders and other interested parties.
As previously mentioned, the Department published advance public notice at 42 Pa.B. 1005 announcing its intent to amend the MA payment policy for the inpatient care related to the mother's delivery of a normal newborn. The Department invited interested persons to comment. The Department also posted the draft regulation on the Department's web site on February 24, 2012. The Department again invited interested persons to submit written comments, on or before March 9, 2012, regarding the regulations to the Department. To comply with Federal law and to encourage transparency and public input, the Department provided an opportunity for comment by publishing the notice and posting the draft regulation on the Department's web site. This public comment process provided sufficient opportunity for interested parties to submit comments, as supported by the number of comments that were submitted.
Comment
One commentator suggested that the expedited rulemaking violates Federal law. Under section 1902(a)(13)(A) of the Social Security Act (42 U.S.C.A. § 1396a(a)(13)(A)), a state agency may not materially change payment methods for hospital services without first publishing the change as a proposal and soliciting and considering public comment. Federal law is not satisfied by publishing a ''final'' rule, subject to after the fact comments, because rulemaking parameters are deemed finalized when they are adopted in final-form and comments on final rules are considered by the courts to be window dressing. Under the Supremacy Clause, State law permitting the Department to forego notice and comment does not eliminate the public process obligations imposed by Federal law.
Response
Contrary to the commentator's contention and as required under Federal law, the Department published notice of its intent to change its payment for inpatient services at 42 Pa.B. 1005. The Department discussed the intended change and provided for a public comment period. The change will not be effective prior to the date on which the Department published its notice of the intended change.
Related Readmission Payment Policy
The Department implemented the 30-day readmission time period effective July 1, 2011, as required under Act 22, and announced the change at 41 Pa.B. 4818 (September 3, 2011).
The Department received written comments from two hospitals and the Urban Health Care Coalition of Pennsylvania regarding the readmission payment policy as published in the Pennsylvania Bulletin. The majority of these comments did not relate to the 30-day readmission time period. Instead, the comments related to the Department's operational review procedures for review of readmissions and the inability of hospitals to control patient behavior. Although the Department appreciates the comments received, the Department is codifying the 30-day readmission time period as required under Act 22.
Requirements
The following is a summary of the major provisions of the final-omitted rulemaking.
§ 1163.2. Definitions
The Department is adding a definition for ''normal newborn'' as ''a liveborn neonate whose diagnosis is categorized into severity of illness level 1 of the newborn APR-DRG 640 as of July 1, 2011.''
§ 1163.51. General payment policy
This section is amended by adding subsection (v) to provide that the Department will not make a separate APR-DRG payment for an inpatient acute care general hospital stay for a normal newborn.
§ 1163.52. Prospective payment methodology
This section is amended by adding subsection (e) to provide the nonpayment conditions for newborns when the following occur:
• The hospital receives an APR-DRG payment for the mother's obstetrical delivery.
• The newborn meets the definition of a ''normal newborn'' under § 1163.2 (relating to definitions).
• The normal newborn is discharged from the hospital before or on the same date as the mother.
• The normal newborn is not discharged to another acute care inpatient setting.
Currently, the Department makes two separate MA APR-DRG payments to a hospital for the inpatient acute care general hospital admission related to a mother's obstetrical delivery and the admission related to her newborn's care. For FY 2010-2011, the average MA APR-DRG payment for vaginal and cesarean section deliveries was $5,712 and the average MA APR-DRG payment for normal newborn care was $1,155, for a total average payment of $6,867.
Some commercial insurers, as well as several Medicaid programs in other states, pay hospitals a single payment for both the inpatient stay related to the mother's obstetrical delivery and to the normal newborn nursery care, rather than 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 the three health plans typically pay one DRG for the mother's delivery and the newborn care, but 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 health plan varies its payments. It makes either a single payment for the mother's and newborn's inpatient stay or separate payments for the mother's delivery and newborn care depending on the particular hospital contracts involved. In addition, the Department's contracted MA managed care plans pay hospitals, on average, either an all-inclusive payment of $3,745 for the delivery and newborn care or separate payments that on average total $4,884 ($3,578 for the delivery and $1,306 for the newborn care), depending on their provider specific contracts. Both these average payment amounts are significantly less than the current average MA APR-DRG payments for the mother's delivery alone.
The Department also surveyed several states concerning their Medicaid payment methodology for these services. Some states pay 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 the mother's delivery and newborn care, similar to the Department's current practice.
In an effort to address the current budgetary constraints, the Department is changing its policy of making a separate APR-DRG payment to the hospital for the normal newborn's care. Instead, the hospital will receive a single APR-DRG payment for the mother's delivery. In the event the newborn stays in the NICU or experiences other complications not associated with normal newborn care, the hospital will receive two APR-DRG payments for the delivery and newborn care.
§ 1163.57. Payment policy for readmissions
This section is amended to conform the regulation to the Act 22 requirements for readmissions. Act 22 amended section 443.9 of the code by increasing the readmission time period from 14 days to 30 days from the date of previous discharge.
The Department also implemented the 30-day readmission time period effective July 1, 2011, as required under Act 22, and announced the change in the Pennsylvania Bulletin at 41 Pa.B. 4818.
Affected Individuals and Organizations
The newborn and readmission payment policies affect MA payments to acute care general hospitals. As a result of the change to the Department's methodology for payments related to the delivery of normal newborns, hospitals will not receive a separate APR-DRG payment for the inpatient stay of a normal newborn. The readmission requirement, however, was implemented through Act 22. Therefore, the amendment to § 1163.57 merely codifies existing law.
Accomplishments and Benefits
This final-omitted rulemaking changes MA Program payment policy for normal newborn admissions. This change will enable the Department to preserve vital benefits to the greatest number of MA recipients while reducing costs in accordance with the goals in section 403.1 of the code. The amendments to § 1163.57 also codifies current payment polices as required under section 443.9 of the code.
Fiscal Impact
The changes are anticipated to result in savings of $1.029 million ($0.463 million in State funds) in the MA Program in FY 2011-2012.
Paperwork Requirements
There are no additional reports, paperwork or new forms needed to comply with the final-omitted rulemaking.
Regulatory Review Act
Under section 403.1 of the code, this final-omitted rulemaking is not subject to review under the Regulatory Review Act.
Findings
The Department finds that:
(1) Notice of proposed rulemaking is omitted in accordance with section 204(1)(iv) and (3) of the CDL, 1 Pa. Code § 7.4(1)(iv) and (3) and section 403.1(a) of the code because this final-omitted rulemaking relates to Commonwealth grants and benefits.
(2) The adoption of this final-omitted rulemaking in the manner provided by this order is necessary and appropriate for the administration and enforcement of the code.
(3) Notice of proposed rulemaking is impracticable and unnecessary for the amendments to § 1163.57(a) and (b) because Act 22 statutorily amended the readmission time periods to 30 days.
Order
The Department, acting under the code, orders that:
(a) The regulations of the Department, 55 Pa. Code Chapter 1163, are amended by amending §§ 1163.2, 1163.51, 1163.52 and 1163.57 to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(b) The Secretary of the Department shall submit this order and Annex A to the Office of General Counsel for approval as to legality and form as required by law.
(c) The Secretary of the Department shall certify and deposit this order and Annex A with the Legislative Reference Bureau as required by law.
(d) This order shall take effect for dates of discharge on and after May 1, 2012, and upon publication in the Pennsylvania Bulletin with the exception of § 1163.57. Section 1163.57 is effective July 1, 2011.
GARY D. ALEXANDER,
SecretaryFiscal Note: 14-528. No fiscal impact; (8) recommends adoption.
Annex A TITLE 55. PUBLIC WELFARE PART III. MEDICAL ASSISTANCE MANUAL CHAPTER 1163. INPATIENT HOSPITAL SERVICES Subchapter A. ACUTE CARE GENERAL HOSPITALS UNDER THE PROSPECTIVE PAYMENT SYSTEM GENERAL PROVISIONS § 1163.2. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
APR-DRG—All Patient Refined Diagnosis Related Group.
Buildings—The basic structure or shell and additions thereto.
* * * * * Institutionalized individual—A person who is detained or confined under one of the following:
(i) A civil or criminal statute in a correctional, rehabilitative or mental retardation facility, psychiatric hospital or other facility for the care and treatment of mental illness or mental retardation.
(ii) Voluntary commitment in a psychiatric hospital, mental retardation facility or other facility for the care and treatment of mental illness or mental retardation.
Normal newborn—A liveborn neonate whose diagnosis is categorized into severity level 1 of the newborn APR-DRG 640 as of July 1, 2011.
Outlier—An inpatient hospital case having either an extremely long length of stay or extraordinarily high costs in comparison to most discharges for the same DRG.
* * * * * PAYMENT FOR HOSPITAL SERVICES § 1163.51. General payment policy.
* * * * * (u) Capital and operating costs related to new or additional beds are nonallowable for purposes of this subchapter unless a Certificate of Need or letter of nonreviewability related to those beds was issued by the Department of Health prior to July 1, 1993.
(v) The Department will not make a separate APR-DRG payment for inpatient acute care general hospital services of a normal newborn.
§ 1163.52. Prospective payment methodology.
(a) The Department will base payment for inpatient hospital services on the classification of inpatient hospital discharges by DRGs used by the Medicare Program.
(b) The Department will assign a DRG to each MA discharge. The assignment of a DRG is based on:
(1) The recipient's diagnoses.
(2) The procedures performed during the recipient's hospital stay.
(3) The recipient's sex.
(4) The recipient's age.
(5) The recipient's discharge status.
(c) For a DRG, the Department will determine a relative value which reflects the cost of hospital resources used to treat cases in that DRG relative to the Statewide average cost of hospital cases. The Department will determine the relative value under § 1163.122 (relating to determination of DRG relative values).
(d) The Department will base payment for compensable inpatient hospital services under the DRG payment system on the hospital's base DRG rate determined under § 1163.126 (relating to computation of hospital specific base payment rates).
(e) The Department will not make a separate APR-DRG payment for a normal newborn when the following occur:
(1) The hospital receives an APR-DRG payment for the mother's obstetrical delivery.
(2) The newborn meets the definition of a ''normal newborn'' under § 1163.2 (relating to definitions).
(3) The normal newborn is discharged from the hospital before or on the same date as the mother.
(4) The normal newborn is not discharged to another inpatient setting.
§ 1163.57. Payment policy for readmissions.
(a) Except as specified in subsection (c), if a recipient is readmitted to a hospital within 30 days of discharge, the Department makes no payment in addition to the hospital's original DRG payment. If the combined hospital stay qualifies as an outlier, an outlier payment will be made.
(b) If a patient is readmitted within 30 days of discharge for the treatment of conditions that could or should have been treated during the previous admission, the Department makes no payment in addition to the hospital's original DRG payment.
(c) Except as specified in subsection (b), if a patient is readmitted to the hospital due to complications of the original diagnosis and this results in a different DRG with a higher payment rate, the Department pays the higher DRG payment rate rather than the original DRG rate.
(d) Except as specified in subsection (b), if a patient is readmitted to the hospital due to conditions unrelated to the previous admission, the Department considers the readmission a new admission for payment purposes.
[Pa.B. Doc. No. 12-647. Filed for public inspection April 13, 2012, 9:00 a.m.]
