Section 149.5  Diagnosis Related Grouping (DRG) Prospective Payment System (PPS)

a)         Sections 149.25 through 149.150 describe:

1)         The basis of payment for inpatient hospital services under the DRG PPS and set forth the general basis for the system;

2)         Classifications of hospitals that are included and excluded from the DRG PPS and the requirements governing inclusion or exclusion of hospitals in the system as a result of changes in their classification;

3)         Conditions that must be met for a hospital to receive payment under the DRG PPS;

4)         The methodology by which DRG prospective rates are determined;

5)         The methodology for determining additional payments for outlier cases;

6)         The rules for special treatment of certain facilities; and

7)         The types, amounts and methods of payment to hospitals under the DRG PPS.

b)         Notwithstanding any other provisions of this Part, reimbursement to hospitals for services provided October 1, 1992, through March 31, 1994, shall be as follows:

1)         Base Inpatient Payment Rate.  For inpatient hospital services rendered, or, if applicable, for inpatient hospital admissions occurring, on and after October 1, 1992, and on or before March 31, 1994, the Department shall reimburse hospitals for inpatient services at the base inpatient payment rate calculated for each hospital, as of June 30, 1993.  The term "base inpatient payment rate" shall include the reimbursement rates calculated effective October 1, 1992, under Part 149.

2)         Exceptions.  The provisions of subsection (b)(1) above shall not apply to:

A)        Hospitals reimbursed under 89 Ill. Adm. Code 148.82, 148.160, or 148.170.  Reimbursement for such hospitals shall be in accordance with 89 Ill. Adm. Code 148.82, 148.160, or 148.170, as applicable.

B)        Hospitals reclassified as rural hospitals as described in 89 Ill. Adm. Code 148.40(f)(4).  Reimbursement for such hospitals shall be in accordance with 89 Ill. Adm. Code 148.40(f)(4) and 148.260, or Section 149.100(c)(1)(A), whichever is applicable.

C)        The inpatient payment adjustments described in 89 Ill. Adm. Code 148.120, 148.150, and 148.290.  Reimbursement for such inpatient payment adjustments shall be in accordance with 89 Ill. Adm. Code 148.120, 148.150, and 148.290, and shall be in addition to the base inpatient payment rate described in subsection (b)(1) above.

c)         Definitions

            Unless specifically stated otherwise, the definitions of terms used in this Part are as follows:

1)         "DRG grouper" means:

A)        For the rate period described in 89 Ill. Adm. Code 148.25(g)(2)(A), the HCFA Medicare DRG grouper in effect on September 1, 1992, adjusted for differences in Medicare and Medicaid policies and populations, as described in Section 149.100(a)(1).

B)        For the rate periods described in 89 Ill. Adm. Code 148.25(g)(2)(B), the HCFA Medicare DRG grouper which is in effect 90 days prior to the date of admission, adjusted for differences in Medicare and Medicaid policies and populations, as described in Section 149.100(a)(1).

2)         "Medicare weighting factor" means:

A)        For the rate period described in 89 Ill. Adm. Code 148.25(g)(2)(A), the Medicare DRG weighting factors in effect on September 1, 1992, adjusted for differences in Medicare and Medicaid policies and populations, as described in Section 149.100(a)(2).

B)        For the rate periods described in 89 Ill. Adm. Code 148.25(g)(2)(B), the Medicare DRG weighting factors in effect 90 days prior to the date of admission, adjusted for differences in Medicare and Medicaid policies and populations, as described in Section 149.100(a)(2).

3)         "PPS Pricer" means:

A)        For the rate period described in 89 Ill. Adm. Code 148.25(g)(2)(A), the HCFA Medicare PPS Pricer, Version 92.0.

B)        For the rate periods described in 89 Ill. Adm. Code 148.25(g)(2)(B), the HCFA Medicare PPS Pricer version that is in effect 90 days prior to the date of admission.

4)         "Marginal Cost Factor":

A)        For the rate period described in 89 Ill. Adm. Code 148.25(g)(2)(A), the marginal cost factor shall be the same as that employed by Medicare on September 1, 1992.

B)        For the rate periods described in 89 Ill. Adm. Code 148.25(g)(2)(B), the marginal cost factor shall be the same as that employed by Medicare 90 days prior to the date of admission.

5)         "Cost Outlier Threshold":

A)        For the rate period described in 89 Ill. Adm. Code 148.25(g)(2)(A), the cost outlier threshold shall be the same as that employed by Medicare on September 1, 1992, adjusted for the differences in Medicare and Medicaid policies and population, as described in Section 149.100(a)(1).

B)        For the rate periods described in 89 Ill. Adm. Code 148.25(g)(2)(B), the cost outlier threshold/fixed loss threshold shall be the same as that employed by Medicare 90 days prior to the date of admission.

(Source:  Amended at 19 Ill. Reg. 10674, effective July 1, 1995)