December 2016 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 : 3.7.3.4 Outliers

3.7.3.4 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 www.tmhp.com.

3.7.3.4.1

• Additional payment is based on inpatient days that exceed the DRG day threshold multiplied by 60 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.In compliance with 1 TAC §355.8052, all DRG inpatient hospital day outlier payments must not exceed the allowed cost for the service. All hospitals except in-state children’s hospitals, both day and cost outlier payments have been reduced by 10 percent.Calculate the allowed cost for the service (i.e., the cap amount) by taking the difference between the Tax Equity and Fiscal Responsibility Act (TEFRA) and DRG-payable amounts.Reimbursement is made for day or cost outliers on claims that qualify. 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.

Example amount Calculate the allowed cost for the service (i.e., the cap amount) by taking the difference between the TEFRA and DRG payable amounts (in this example, $600.00).Take the lesser of the day outlier or the cap amount (in this example it would be the day outlier of $500.00).Reduce by 10 percent. 11.14 x Universal Mean ($6,505.52) = <amount A>11.14 x SDA = <amount B>1.5 x DRG Relative Weight x SDA = <amount C>Cost threshold = The greater of <amount C> compared with (the lesser of <amount A> and <amount B>) Allowed amount x reimbursement rate = TEFRA amount

• If the claim qualifies for both the day outlier and cost outlier payment, the payment will be made up to $495.00, which is the greater of the day outlier or the cost outlier payment.

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