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December 2016 Texas Medicaid Provider Procedures Manual

Children’s Services Handbook : 2 Medicaid Children’s Services Comprehensive Care Program (CCP) : 2.17 Inpatient Rehabilitation Facility (Freestanding) (CCP) : 2.17.5 Reimbursement

2.17.5
Reimbursement for care provided in the freestanding inpatient rehabilitation facility is made under the Texas Diagnosis-Related Group (DRG) Payment System.
A new provider is given a reimbursement interim rate of 50 percent until a cost audit has been performed. Payment is calculated by multiplying the standard dollar amount (SDA) for the hospital’s payment division indicator times the relative weight associated with the DRG assigned by Grouper.
Important:
The DRG payment may be enhanced by an adjusted day or cost outlier payment, if applicable. For example, the limit per spell-of-illness under Texas Medicaid guidelines is waived for clients who are birth through 20 years of age. An outlier payment may be made to compensate for unusual resource utilization or a lengthy stay.
The following criteria must be met to qualify for a day outlier payment. Inpatient days must exceed the DRG day threshold for the specific DRG. Additional payment is based on inpatient days that exceed the DRG day threshold multiplied by 70 percent of the per diem amount of a full DRG payment. The per diem amount is established by dividing the full DRG payment amount by the arithmetic mean length of stay for the DRG.
To establish a cost outlier, TMHP determines the outlier threshold by using the greater of the full DRG payment amount multiplied by 1.5 or an amount determined by selecting the lesser of the universe 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. The outlier threshold is subtracted from the amount of reimbursement for the admission established under the TEFRA principles and the remainder multiplied by 70 percent to determine the actual amount of the cost outlier payment.
If an admission qualifies for both a day and a cost outlier, the outlier resulting in the highest payment to the hospital is paid.
The Remittance and Status (R&S) Report reflects the outlier reimbursement payment and defines the type of outlier paid, day or cost.
Providers should call the TMHP provider relations representative for their area with questions about the outlier payment.

Texas Medicaid & Healthcare Partnership
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