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2012 Texas Medicaid Provider Procedures Manual

Inpatient and Outpatient Hospital Services Handbook : 3. Inpatient Hospital (Medical/Surgical Acute Care Inpatient Facility) : 3.7 Claims Filing and Reimbursement : 3.7.3 Inpatient Reimbursement : Outliers
TMHP makes outlier payment adjustments to DRG hospitals for admissions that meet the criteria for exceptionally high costs or exceptionally long lengths of stay for clients who are 20 years of age and younger as of the date of the inpatient admission. If a client’s admission qualifies for both a day and a cost outlier, the outlier resulting in the higher payment to the hospital is paid.
Providers can view their day and cost outlier payment information for inpatient hospital claims on the Electronic Remittance and Status (ER&S) Report. The R&S Report reflects the outlier reimbursement payment and defines the type of outlier paid. To view the day and cost outlier payment information, providers, facilities, and third party vendors may need to update their 835 electronic file format. For information about how to update the 835 electronic file format, refer to the revised electronic data interchange (EDI) companion guide (ANSI ASC X12N 835 Healthcare Claim Payment/Advice-Acute Care Companion Guide) on the TMHP website at Day Outliers
Effective September 1, 2011, the following criteria must be met to qualify for a day outlier payment:
Hospitals must use the following formula to calculate the day outliers. To calculate the day outlier payment amount, the number of outlier days must first be determined:
Number of Days Allowed-DRGs Threshold = Outlier Days Cost Outliers
To establish a cost outlier, TMHP determines the outlier threshold by using the full DRG payment amount multiplied by 1.5 or an amount determined by selecting the lesser of the universal mean of the current base year data multiplied by 11.14 or the hospital’s SDA multiplied by 11.14. The calculation that yields the greater amount is used in calculating the actual cost outlier payment. Effective September 1, 2011, the outlier threshold is subtracted from the amount of reimbursement for the admission established under TEFRA principles, and the remainder multiplied by 60 percent to determine the actual amount of the cost outlier payment.
Hospitals must use the following formulas to calculate the day outliers. Effective for claims with dates of admission on or after September 1, 2011, the Universal Mean is $5,888.63.
To calculate the cost outlier amount, the cost threshold must first be determined. Three calculations and two comparisons are necessary:
11.14 x SDA =
Comparison 1: Take lesser of A or B.
1.5 x DRG Relative Weight x SDA =
Comparison 2: Greater of number C and comparison 1 is the cost threshold.

Texas Medicaid & Healthcare Partnership
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