Special Ground Rules – Inpatient Hospital Services

(1) This section defines the reimbursement procedures and calculations for inpatient health care services by all hospitals. Hospital reimbursement is divided into four (4) groups based on type of admission: (a) Peer Groups: 1. Peer Group 1-surgical or non-surgical (medical); 2. Peer Group 2-rehabilitation; 3. Peer Group 3-psychiatric; 4. Peer Group 4-trauma, level 1 and: (b) Length of stay (less than eight (8) days/over seven (7) days). (2) General Information, Payments For each inpatient claim submitted, the provider shall assign a Diagnosis Related Group (MS- DRG) code which appropriately reflects the patient’s primary cause for hospitalization to determine average length of stay and for tracking purposes. Hospitals within each peer group are to be paid the maximum amount per inpatient day unless a contracted rate is less. An additional payment will be due if the total bill for the hospitalization exceeds the stop loss threshold as defined below. (a) The maximum per diem rates to be used in calculating the reimbursement rate is as follows: 1. Peer Group 1 $2,347 (surgical admission) daily for the first seven (7) days; $2,032 (surgical admission) per day for the 8th day and thereafter; Note: These rates include Intensive Care (ICU) & Critical and Cardiac Care (CCU) if not a trauma admission as defined above. $1,932 (medical admission) daily for first seven (7) days; $1,670 (medical admission) per day for the 8th day and thereafter; Note: These rates include Intensive Care (ICU) & Critical and Cardiac Care (CCU). 2. Peer Group 2 (Rehabilitation) $1,145 for the first seven (7) days and $935 per day thereafter. 3. Peer Group 3 (Psychiatric) $830 per day (applicable also to chemical dependency). 4. Peer Group 4 (Trauma level 1) All trauma care at any licensed Level 1 Trauma Center only shall be reimbursed at a maximum rate of $4,725 per day for INPATIENT HOSPITAL FEE SCHEDULE CHAPTER 0800-02-19 each day of the patient’s admission as defined in 0800-02-18- .02(16). (b) Surgical implants shall be reimbursed separately and in addition to the per diem hospital charges. (c) Reimbursement for trauma inpatient hospital services shall be limited to the lesser of the maximum allowable as calculated by the appropriate per diem rate, or the hospital’s billed charges minus any non-covered charges. Non-covered charges are convenience items or charges for services not related to the work injury/illness. (d) Implantables (i.e. rods, pins, plates and joint replacements, etc.) are not included in the per diem reimbursement to the facility and may be reimbursed in addition to the per diem when the invoice is included in the bill. Reimbursement for implantables is limited to a maximum of the hospital’s cost plus fifteen percent (15%)—capped at one thousand dollars ($1000)—of the original manufacturer’s invoice amount. This is applicable per item and is not cumulative. Implantables shall be billed using the appropriate HCPCS codes when available. (e) Billing for implantables shall be accompanied by an invoice. (f) The following additional items are not included in the per diem reimbursement to the facility and may be reimbursed separately. All of these items shall be listed with the applicable CPT®/HCPCS code. 1. Durable Medical Equipment; 2. Orthotics and Prosthetics; 3. Ambulance Services; 4. Take home medications and supplies. (g) The items listed in subsection (e) shall be reimbursed according to the Rules for Medical Payments (Chapter 0800-02-17), and the Medical Fee Schedule Rules (Chapter 0800-02-18) payment limits. Refer to the maximum rates set forth in Rule 0800-02-18 for practitioner fees. Items not listed in the Rules shall be reimbursed at the usual and customary rate as defined in Rule 0800-02-17, unless otherwise indicated herein. (h) Per-diem rates are all inclusive (with the exception of those items listed in subparagraph (e) above). (i) The Inpatient Hospital Fee Schedule allows for independent reimbursement on a case- by-case basis if the particular care exceeds the Stop-Loss Threshold. (j) Payments for implantables shall be made only to the facility and not to a supplier or distributor. (k) Charges for licensed/accredited Skilled Nursing Facilities shall be paid according to the CMS national unadjusted rates for urban or rural facilities in effect on the date of service, applicable carve outs, including adjustments made under “Patient-Drive Payment Model” (PDPM) or later CMS methodology. The bill shall include the applicable “Resource Utilization Group” (RUG) for each day. Hospital per-diem and stop loss calculations do not apply to these facilities. INPATIENT HOSPITAL FEE SCHEDULE CHAPTER 0800-02-19 (3) Reimbursement Calculations (a) Explanation 1. Each admission is assigned an appropriate MS-DRG. 2. The applicable Standard Per Diem Amount (“SPDA”) is multiplied by the length of stay (“LOS”) for that admission plus items listed under (e) above: Formula: (LOS) x (SPDA) + (items listed under (e) above) = WCRA 3. The Workers’ Compensation Reimbursement Amount (“WCRA”) is the total amount of reimbursement to be made for that particular admission and may include a stop loss payment (“SLP”) as calculated below. (4) Stop-Loss Method (a) Stop-loss is an independent reimbursement factor established to ensure fair and reasonable compensation to the hospital for services rendered during treatment to an injured worker. This stop-loss threshold is established to ensure compensation for services required during an admission. (b) Explanation 1. To be eligible for stop loss payment, the total Allowed Charges for a hospital admission shall exceed the hospital maximum payment, as determined by the hospital maximum payment rate per day, by at least $21,788 for Non-Trauma Admissions and $31,500 for Trauma Admissions. This does not include amounts for items set forth in Rule 0800-02-19-.03, such as implantables, DME, etc., which shall not be included in determining the total Allowed Charges for stop-loss calculations. 2. Once the allowed charges reach the stop-loss threshold, reimbursement for all additional charges shall be made based on a stop-loss payment factor of 80%. 3. The additional charges are multiplied by the Stop-Loss Reimbursement Factor (SLRF) and added to the maximum allowable payment. (c) Formula: (LOS) x (SPDA) + (Items listed under (2)(e) in this section) + (Additional Charges x SLRF) = WCRA (5) Billing for Inpatient Admissions (a) All bills for inpatient institutional services shall be submitted on the standard billing form or any revision to that form approved for use by the Medicare.