Section 148.280  Reimbursement Methodologies for Children's Hospitals and Hospitals Reimbursed Under Special Arrangements

a)         Children's Hospitals

1)         Initial Rate Period

A)        For purposes of reimbursement, all children's hospitals, as defined in 89 Ill. Adm. Code 149.50(c)(3), are grouped into one peer group.

B)        Each hospital's costs for the base period shall be derived from audited cost reports (see 42 CFR 447.260 and 447.265 (1982)) for hospital fiscal years ending during calendar year 1989.

C)        These base period costs shall be updated, trended forward from the midpoint of each hospital's base period to the midpoint of the rate period for which rates are being set, according to the methodology of the national total hospital market basket price proxies, (DRI).

D)        The children's hospitals' base period trended rates shall be used as the basis for calculating the group's median trended rate.  Each individual hospital's trended rate is then compared to the group's median trended rate.  Hospitals whose individual trended rates are higher than the median rates shall receive as a final inpatient payment rate their trended rate minus half the difference between their trended rate and the group's median trended rate.  Hospitals whose trended rates are lower than the group's median trended rate shall receive as final inpatient payment rate their individual trended rate plus half the difference between their trended rate and the group's median trended rate.

2)         Subsequent Rate Periods

For the rate period beginning on October 1, 1992, as described in Section 148.25(g)(1)(A), and for subsequent rate periods, as described in Section 148.25(g)(1)(B), the initial rate, as calculated under subsection (a)(1) above, shall be updated from the midpoint of the base cost reporting period to the midpoint of the rate period using the national hospital market basket price proxies (DRI).

b)         Hospitals Reimbursed Under Special Arrangements

Hospitals that, on August 31, 1991, had a contract with the Department under the ICARE Program, pursuant to Section 3-4 of the Illinois Health Finance Reform Act, may elect to continue to be reimbursed at rates stated in such contracts for general and specialty care for services provided on or after September 1, 1991, subject to the limitations described in Sections 148.40(e) through 148.40(g).

(Source:  Amended at 18 Ill. Reg. 3450, effective February 28, 1994)