Methodology for Reporting Relative Prices

(1) Relative Prices for Hospitals. (a) Payers must report Relative Price data separately by Medicare, Medicaid, Common­ wealth Care, and commercial (fully-insured and self-insured). (b) Payers shall report hospital categories separately for inpatient and outpatient. (c) Payers must report Relative Price data separately by hospital category for acute hospitals, chronic hospitals, rehabilitation hospitals, and psychiatric hospitals. (d) Notwithstanding 114.5 CMR 23.05(1)(c), Payers shall report additional behavioral health-only Relative Price data for acute hospitals with psychiatric or substance abuse units with the psychiatric hospital file. Payers must develop a standard definition of behavioral health services to be used for all acute hospitals impacted by this subsection. (e) Required Data Elements - Hospital Inpatient. 1. DHCFP Provider Number 2. OrgID or Payer's Internal Provider Number 3. Name of Hospital 4. Insurance Category (Medicare, Medicaid, Commonwealth Care, or commercial) 5. Product Type (HMO, PPO, Indemnity, POS, other) 6. Hospital-specific Base Rate: the negotiated rate per discharge, excluding any adjustments for case mix or severity of illness. Payers must note when Hospital-Specific Base Rates are derived from payment data. a. For acute hospitals that are not paid on diagnostic-related group (DRG) model, the Payer must calculate a hospital-specific base rate equivalent. Payers who are able to demonstrate significant hardship in developing acute hospital DRG base rates and obtaining DRG software may apply to the Division for a waiver to use a standard per unit rate. b. For chronic, rehabilitation, or psychiatric hospitals, Payers may use a per unit rate so long as a uniform unit is applied within each hospital category. 7. Network Average Base Rate: the simple average of the Hospital-specific Base Rate for all hospitals within a Payer's network. 8. Total Non-claims Payments: the sum of all Non-Claims Related Payments. The allocation method for non-claims payments is outlined in the Data Specifications Manual. 9. Total Payments: the sum of all medical claims payments. 10. Case Mix: the Payer's case mix index for the provider including all cases. 11. Number of Discharges: the total number of discharges associated with a provider. 12. Hospital-specific Product Mix: the proportion of the hospital's inpatient payments for HMO, PPO, Indemnity, POS, and other Massachusetts provider network products. 13. Network-wide Product Mix: the proportion of the Payer's payments for HMO, PPO, Indemnity, POS, and other Massachusetts provider network products. 14. DRG version and group number used in calculation. (f) Calculation of Relative Prices - Hospital Inpatient. Based upon the data specified in 114.5 CMR 23.05(1)(e) the Division shall calculate Hospital Inpatient Relative Prices by dividing Total Payments by the product of Case Mix and Number of Discharges to derive an Adjusted Base Rate. The sum of the products of the Adjusted Base Rate by the Network-wide Product Mix will produce the Hospital Product Adjusted Base Rate. The Hospital's Product Adjusted Base Rate divided by Payer's Network Average Product Adjusted Base Rate shall result in the Hospital's Inpatient Relative Price. Payers will be provided a copy of the calculation. (g) Required Data Elements - Hospital Outpatient. 1. DHCFP Provider Number 2. OrgID or Payer's Internal Provider Number 3. Name of Hospital 4. Insurance Category (Medicare, Medicaid, Commonwealth Care, or commercial) 5. Product Type (HMO, PPO, Indemnity, POS, other) 6. Hospital-specific Service Multipliers: the negotiated fee schedule multipliers for each hospital, for each fee schedule category as determined by the Payer, for each product. For hospitals paid on a non-fee schedule basis, multipliers shall be derived by dividing payments for a service category by the amount that would have been paid if the hospital was paid at a standard fee schedule or base rate for that service category. Payers must note when Hospital-specific Service Multipliers are derived from payment data. 7. Total Claims-based Payments: the sum of all medical claims payments. 8. Total Non-claims Payments: the sum of all Non-Claims Related Payments. The allocation method for non-claims payments is outlined in the Data Specifications Manual. 9. Hospital-specific Service Mix: the proportion of the hospital's revenue for outpatient categories established by the Payer in 114.5 CMR 23.05(1)(g)6. 10. Network-wide Service Mix: the proportion of the Payer's payments for outpatient categories established by the Payer in 114.5 CMR 23.05(1)(g)6. 11. Hospital-specific Product Mix: the proportion of the hospital's outpatient payments for HMO, PPO, Indemnity, POS, and other Massachusetts provider network products. 12. Network-wide Product Mix: the proportion of the Payer's payments for HMO, PPO, Indemnity, POS, and other Massachusetts provider network products. (h) Calculation of Relative Prices - Hospital Outpatient. Hospital Outpatient Relative Prices shall be calculated by the Division by summing the products of the Hospital-specific Service Multiplier for each product type by the Network-wide Service Mix for that product type to derive a Base Service Weighted Multiplier. The sum of the products of the Base Service Weighted Multiplier for each product type and the Network-wide Product Mix shall produce the Base Service and Product Adjusted Multiplier. The Division shall derive a Non-Claims Multiplier of each product for each hospital by dividing non-claims payments by total claims payments and multiplying the result by the Base Service Weighted Multiplier. The sum of the products of the Non-claims Multiplier and the Network Average Product Mix shall produce the Product-adjusted Non-claims Multiplier. The sum of the Product-adjusted Non-claims Multiplier and the Base Service and Product Adjusted Multiplier divided by the Network Average Hospital Outpatient Multiplier shall result in the Hospital's Outpatient Relative Price. Payers will be provided a copy of the calculation. (2) Physician Groups (a) Payers must separately identify and report Relative Price data for physician groups who received 3% or more of a Payer's payments to Massachusetts physician group practices. (b) Payers shall report aggregate Relative Price data for all physician groups who received less than 3% of a Payer's physician group payments in the relevant reporting period but were not paid on the Payer's standard fee schedule. The Division may request additional information on such providers. (c) Payers shall report aggregate Relative Price data for all physician groups who received less than 3% of a Payer's physician group payments in the relevant reporting period and were paid on the Payer's standard fee schedule. The Division may request additional information on such providers. (d) Required Data Elements. 1. DHCFP Provider Number 2. OrgID or Payer's Internal Provider Number 3. Name of Physician Group Practice 4. Name of Local Practice Group 5. Pediatric Indicator 6. Insurance Category (Medicare, Medicaid, Commonwealth Care, or commercial) 7. Product Type (HMO, PPO, Indemnity, POS, other) 8. Physician Group-specific Service Multipliers: the negotiated fee schedule multipliers for each physician group, for each fee schedule category as determined by the Payer, for each product. For physician groups paid on a non-fee schedule basis, multipliers shall be derived by dividing payments for a service category by the amount that would have been paid if the physician group was paid at a standard fee schedule or base rate for that service category. Payers must note when Physician Group-specific Service Multipliers are derived from payment data. 9. Physician Group-specific Service Mix: the proportion of the physician group's revenue for service categories established by the Payer in 114.5 CMR 23.05(2)(d)8. 10. Network-wide Service Mix: the proportion of the Payer's payments to physician groups for service categories established by the Payer in 114.5 CMR 23.05(2)(d)8. 11. Physician Group-specific Product Mix: the proportion of the physician group's payments for HMO, PPO, Indemnity, POS, and other Massachusetts provider network products. 12. Network-wide Product Mix: the proportion of the Payer's payments for HMO, PPO, Indemnity, POS, and other Massachusetts provider network products. 13. Total Claims-based Payments: the sum of all medical claims payments. 14. Total Non-Claims Payments: the sum of all Non-Claims Related Payments. The allocation method for non-claims payments is outlined in the Data Specifications Manual. (e) Calculation of Relative Prices - Physician Groups. Physician Group Relative Prices shall be calculated by the Division by summing the products of the Physician Group-Specific Service Multiplier for each product type by the Network-wide Service Mix for that product type to derive a Base Service Weighted Multiplier. The sum of the products of the Base Service Weighted Multiplier for each product type and the Network-wide Product Mix shall produce the Base Service and Product Adjusted Multiplier. The Division shall derive a Non-claims Multiplier for each physician group by dividing non-claims payments by total claims payments and multiplying the result by the Base Service Weighted Multiplier. The sum of the products of the Non-claims Multiplier and the Network Average Product Mix shall produce the Product-adjusted Non-claims Multiplier. The sum of the Product-adjusted Non-claims Multiplier and the Base Service and Product Adjusted Multiplier divided by the Network Average Physician Group Multiplier shall result in the Physician Group's Relative Price. Payers will be provided a copy of the calculation. (3) Other Providers. (a) Payers must report the data separately for the following provider categories: 1. Ambulatory surgical centers; 2. Community health centers; 3. Community mental health centers; 4. Freestanding clinical labs; 5. Freestanding diagnostic imaging; 6. Home health agencies; and 7. Skilled nursing facilities. 8. The Division may specify additional provider categories for which Payers must submit Relative Prices by Administrative Bulletin. (b) Payers must separately identify and report Relative Prices for providers who received 3% or more of payments in a given provider category as identified in 114.5 CMR 23.05(2)(a) for the relevant reporting period. (c) Payers shall report aggregate Relative Price data for all providers who received less than 3% of payments in the relevant reporting period for a given provider category but were not paid on the Payer's standard fee schedule. The Division may request additional information on such providers. (d) Payers shall report aggregate Relative Price data for all providers who received less than 3% of payments in the relevant reporting period for a given provider category and were paid on the Payer's standard fee schedule. The Division may request additional information on such providers. (e) Required Data Elements. 1. DHCFP Provider Number 2. OrgID or Payer's Internal Provider Number 3. Name of Provider 4. Pediatric Indicator 5. Insurance Category (Medicare, Medicaid, Commonwealth Care, or commercial) 6. Product Type (HMO, PPO, Indemnity, POS, other) 7. Provider-specific Service Multipliers: the negotiated fee schedule multipliers for each provider, for each fee schedule category as determined by the Payer, for each product. For providers paid on a non-fee schedule basis, multipliers shall be derived by dividing payments for a service category by the amount that would have been paid if the provider was paid at a standard fee schedule or base rate. Payers must note when Provider-specific Service Multipliers are derived from payment data. 8. Provider-specific Service Mix: the proportion of the provider's revenue for service categories established by the Payer in 114.5 CMR 23.05(3)(e)7. Network-wide Service Mix: the proportion of the Payer's payments for service categories established by the Payer in 114.5 CMR 23.05(3)(e)7. Provider-specific Product Mix: the proportion of the provider's payments for HMO, PPO, Indemnity, POS, and other Massachusetts provider network products. 11. Network-wide Product Mix: the proportion of the Payer's payments for HMO, PPO, Indemnity, POS, and other Massachusetts provider network products. 12. Total Claims-based Payments: the sum of all medical claims payments. 13. Total Non-claims Payments: the sum of all Non-claims Related Payments. The allocation method for non-claims payments is outlined in the Data Specifications Manual. (f) Calculation of Relative Prices - Other Providers. Other Provider Relative Prices shall be calculated by the Division by summing the products of the Provider-specific Service Multiplier for each product type by the Network-wide Service Mix for that product type to derive a Base Service Weighted Multiplier. The sum of the products of the Base Service Weighted Multiplier for each product type and the Network-wide Product Mix shall produce the Base Service and Product Adjusted Multiplier. The Division shall derive a Non-claims Multiplier for each provider by dividing non-claims payments by total claims payments and multiplying the result by the Base Service Weighted Multiplier. The sum of the products of the Non-claims Multiplier and the Network Average Product Mix shall produce the Product-adjusted Non-claims Multiplier. The sum of the Product-adjusted Non-claims Multiplier and the Base Service and Product Adjusted Multiplier divided by the Network Average Provider Multiplier shall result in the Provider's Relative Price. Payers will be provided a copy of the calculation. (4) Due Dates. (a) Annual Reports. 1. Hospitals. Payers must submit required Relative Price data reports for Hospitals by June 1st each year for the prior Calendar Year. 2. Physician Groups. Payers must submit Relative Price data reports for Physician Groups by June 1st each year for the Calendar Year ending seventeen months prior. Other Providers. Payers must submit required Relative Price data reports for ambulatory surgical centers, community health centers, community mental health centers, freestanding clinical laboratories, freestanding diagnostic imaging centers, home health agencies, and skilled nursing facilities by June 1st each year for the prior Calendar Year. (b) Initial Filing. Payers must submit hospital Relative Price data for Calendar Years 2009 and 2010, and physician group Relative Price data for Calendar Year 2009 by June 1, 2011. Payers must submit other provider Relative Price data for Calendar Year 2010 by June 30, 2011.