Similarities and Differences MaineCare vs. Medicare DRGs

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Similarities and Differences
MaineCare vs. Medicare
DRGs
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Maggie Fortin, Senior Manager

• What is an Inpatient
MaineCare
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– a patient who has been admitted to the hospital
and is receiving room, board and professional
services in the hospital on a continuous twentyfour
(24) hour-a-day basis
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• Effective 7/1/2011
Effective date
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– The Department reimburses acute care (noncritical
access hospitals) for inpatient services
using a Diagnostic Related Group (DRG) billing
methodology similar to that used by Medicare
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DRG Base
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• MaineCare’s DRG payment methodology
includes 3 components
– a statewide direct care rate
• DRG base case mix specific; not cost settled
• Unadjusted $4177.00
– a hospital specific estimated capital expense
• cost settled
– a medical education rate
• cost settled
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Fundamentals
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• Assuming MaineCare has adopted the same
policies used by Medicare
– The basis for payment is the classification system
referred to as MS-DRGs
– The MS-DRG (Medicare Severity) is a payment
classification system which provides a means of
relating types of patients a hospital treats (i.e., its
case mix) to the cost incurred by the hospital
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Fundamentals
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• To determine the appropriate MS-DRG
classification, the billing system must read the
age, gender, discharge status, principal
diagnosis, secondary diagnoses and
procedures performed and reported on the
claim.
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Fundamentals
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• Hospitals report detailed information on the
claim:
– Principal diagnosis is a key indicator
• Defined as the condition established after study to be
chiefly responsible for the admission
– Secondary diagnoses support complicating
factors
• Defined as a condition(s) that coexisted or develop(s)
and was managed medically during the course of
treatment
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DRG Relative Weight Calculation
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• The relative weighting factor for the DRGs was assigned by the
Department to represent the time and resources associated with
providing services for that diagnosis group.
– The Department calculates preliminary weights for each DRG, and then
normalizes each weight to ensure that the statewide case mix index for
applicable claims equals 1.0
– The Department calculates relative weights using claims from critical access
hospitals, non-critical access acute care hospitals and hospitals reclassified
to a different Medicare geographic area
• The weights do not include data from rehabilitation hospitals.,days awaiting
placement in swing beds were taken into account when calculating relative
weights
• Weights have not been published on the State’s website to date
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MaineCare vs. Medicare
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Comparison
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Medicare Code Editor/ MaineCare Code
Editor…Maybe?
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• To understand the process of assigning DRGs , Medicare employs a software
package called the Medicare Code Editor(MCE)
– This tool is similar to hospital scrubbing or interface programs used to verify
and validate claim data prior to claim submission to payer
• Examines a record for the correct use of ICD-9-CM codes that describe a patient's diagnoses
and procedures. The edits include basic consistency checks on the interrelationship among a
patient's age, sex, and diagnoses and procedures.
– Coverage Edits - Examines the type of patient and procedures performed to
determine if the services are covered.
– Clinical Edits - Examines the clinical consistency of the diagnostic and
procedural information on the medical claim to determine if they are clinically
reasonable and, therefore, should be paid
• It is likely that MaineCare uses some type of validation software but has not
published edit requirements
• The Software is routinely updated with logic publications issued thru transmittals
for hospital usage
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Hospital Acquired Conditions
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• This MaineCare DRG system precludes
payment for certain hospital acquired
conditions
– MaineCare /Medicare HAC the same
– Like Medicare, POA indicator reported with the
ICD-9-CM codes triggers the grouping software
to assign claim to a lower weighted DRG
• Positive indicators preclude diagnoses from being
considered a major or complicating co-morbidities
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Transfer DRG Payments
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• The State defines a transfer to mean a member is moved
from one hospital to the care of another hospital
– MaineCare will not reimburse for more than two
discharges for each episode of care for a member
transferring between multiple hospitals.
– MaineCare does recognize UB04 patient status codes
when movement occurs between separate provider
entities
• Ex: Small rural hospital to medical center transfer
– Transferring hospital will receive a percentage of
charges vs DRG based payment
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Hospital Discharge and Transfers
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• MaineCare defines a Discharge to be when a member is
formally released from the hospital, transferred from one
hospital to another, or dies in the hospital
• For purposes of DRG payment calculations, a member is not
considered discharged if they are transferred to any different
location or different unit, in the same hospital
• Effective July 1, 2011, for hospitals billing under DRG,
transferring a member to a distinct rehabilitation unit
within the same hospital for the same diagnosis will be
considered a discharge.
– MaineCare will allow one medical DRG and one
rehab DRG
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Readmissions
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• When a patient is discharged and readmitted to the
same hospital on the same day, or
• When a patient is readmitted to the same hospital
within 72 hours of an inpatient discharge for a
diagnosis within the same DRG, excluding new
complications or co-morbidities
– An additional DRG will not be paid for
subsequent admission
– Providers will submit claims, MaineCare will pay
but recover post payment (monthly)
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Post Acute Care Transfers
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• Medicare rule regarding transfers to other
provider types for continuum of care
– Hospital to SNF, HHA, Hospice, etc.
• Payment is reduced based on a % of the DRG as
calculated using the mean length of stay but capped at
the full DRG
– No rule exists in ,Chapter II or III, Section 45
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Outliers
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• MaineCare Outlier Adjustment
– An outlier payment adjustment is made to the rate when an unusually
high level of resources has been used for a case.
– An outlier payment is triggered when the result of the following
equation is greater than zero:
• Charges multiplied by the hospital-specific cost to charge ratio minus the
outlier threshold* minus DRG-based discharge rate
– The payment is equal to 80% of the resulting value
• Medicare also recognizes an outlier for excessive cost
– Medicare allows for an outlier reconciliation review based on time
value (date of settlement)
*Outlier Threshold: has not been released
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The 72-Hour Rules
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• Medicare requires all hospital outpatient diagnostics
and non diagnostics related to an inpatient
admission for the same hospital to be billed as
inpatient when provided within 72 hours of
admission
– Also those entities considered “wholly owned” or
“operated by”
• MaineCare’s rendition is to require bundling of all
outpatient services rendered only when patient is
admitted directly to the hospital as an inpatient from
a clinic or emergency room. •
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DRG Versions
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• MaineCare is processing under the 2010
DRG Grouper Version 28
• Medicare currently operating under the
Grouper Version 29
– ICD-9-CM Coding effective after 10/1/11 not
supported by MaineCare
• Out of synch, working toward synchronization
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Differences and Unknowns
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• Medicare add-on technology payments
– No MaineCare reference
• Medicare hemophiliac add-on payments
– No MaineCare reference
• Payment rules; Commercial to MaineCare
eligibility and entitlement PPS payment rules
– PPS payment based on admission or discharge
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•
To the Future
APCs
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MaineCare APCs
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• Ambulatory Payment Classifications (APC)
– Classification of outpatient services clinically
similar; for use in determining facility
reimbursement as defined in the Medicare APC
system
• MaineCare outpatient claims are paid via PIP and
adjudicated for reporting on remittance under APCs
• State planning with anticipation of approval for a 7/1/12
implementation
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MaineCare APCs
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• Recognition of Medicare Addendum B as the
basis for acceptable reimbursable APCs
– https://www.cms.gov/HospitalOutpatientPPS/AU/itemdetai
l.asp?filterType=none&filterByDID=-
99&sortByDID=3&sortOrder=descending&itemID=CMS12
52388&intNumPerPage=10
• Some CPT/HCPC codes not approved by Medicare
are accepted by MaineCare; currently under analysis
by State
• State planning to stay current with CMS maintenance
schedule
– Annual with quarterly updates •
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MaineCare APCs
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• The MaineCare APC payment is determined
by:
– Medicare national unadjusted APC Rate x
Conversion Factor of 86%
• Not wage adjusted
• State planning and anticipating approval for a
7/1/12 implementation
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MaineCare APCs - Claims Processing Usage
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• Currently outpatient coding verification using the Molina system
with proprietary software
– Medicare uses 3M software referred to as the Outpatient Code
Editor(OCE)
• Federally mandated National Correct Coding Initiative (NCCI )
editing on code pairs and exclusions
– MaineCare recognition of CPT modifiers
• Modifiers affect reimbursement/benefits calculation
• Technical and Professional Coding
• Medically unlikely edits (MUES) currently in test but
implementation planned soon
– Medicare tables establishing utilization parameters
• Inpatient Only Coding (Status indicator C) recognized by
MaineCare
– Medicare exception logic(Modifier CA) has not been addressed
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MaineCare APCs
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• MaineCare is producing an electronic
remittance; ANSI V 4010 4a.1
– Translations remain challenging, inconsistencies
in reason code, remark code and group code
usage
– Inconsistencies noted in line level detail
• HCPC vs Revenue code reporting
• Version 5010 is HIPAA mandated 1/1/2012
– Upgrade should clarify and support
standardization
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Contact Information
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Maggie Fortin, CPC, CPC-H, CHC
Senior Manager
Baker Newman Noyes
280 Fore Street
Portland, ME 04112
(207) 791-7547 (direct line)
(800) 244-7444
(207) 774-1793 (fax)
mfortin@bnncpa.com
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