Section 149.150  Payments to Hospitals Under the DRG Prospective Payment System

a)         Total Medicaid Payment.  Under the DRG PPS, the total payment for inpatient hospital services furnished to a Medicaid client by a hospital will equal the sum of the payments listed in subsections (b) through (c).  In addition to the payments listed in subsections (b) through (c) of this Section, hospitals shall also receive disproportionate share adjustments in accordance with 89 Ill. Adm. Code 148.120, if applicable, uncompensated care adjustments in accordance with 89 Ill. Adm. Code 148.150, if applicable, and various specific inpatient payment adjustments in accordance with 89 Ill. Adm. Code 148.290, if applicable.

b)         Payments Determined on a Per Case Basis.  A hospital will be paid on a per case basis (with the exception of kidney acquisition costs) the following amounts:

1)         the appropriate DRG PPS rate for each discharge as determined in accordance with Section 149.100(c).

2)         The appropriate outlier payment amounts determined under Section 149.105.

3)         Capital related costs as determined under subsection (c)(1)(A) of this Section.

c)         Payments for Capital Costs.  For the rate period described in 89 Ill. Adm. Code 148.25(g)(2)(A) these costs shall be paid on a per case basis.  For the rate periods described in 89 Ill. Adm. Code 148.25(g)(2)(B), these costs shall be paid on a per diem basis.  Payments for these costs shall be calculated as follows:

1)         Capital Related Costs

A)        For the rate period described in 89 Ill. Adm. Code 148.25(g)(2)(A):

i)          The capital related cost per diem shall be calculated by taking the hospital's total capital related costs as reported on the hospital's latest audited Medicare cost report on file with the Department for the base period as defined in 89 Ill. Adm. Code 148.25(g)(1), divided by the hospital's total inpatient days, trended forward to the midpoint of the rate period using the national total hospital market basket price proxies (DRI).

ii)         These two trended capital related cost per diems are then added together and divided by two to calculate the hospital's adjusted capital related cost per diem.

iii)         The adjusted capital related cost per diem amount, as calculated in subsection (c)(1)(A)(ii) above, shall be rank ordered for all hospitals and capped at the 80th percentile.

iv)        Each hospital shall receive a per case add-on for capital related costs which shall be equal to the amount calculated in subsection (c)(1)(A)(ii) or subsection (c)(1)(A)(iii) above, whichever is less, multiplied by the hospital's average length of stay for services reimbursed under the DRG PPS.

B)        For the rate periods described in 89 Ill. Adm. Code 148.25(g)(2)(B):

i)          Capital related cost per diem shall be calculated in accordance with subsections (c)(1)(A)(i) through (c)(1)(A)(iii) of this Section.

ii)         Each hospital shall receive a per diem add-on for capital related costs which shall be equal to the amount calculated in subsection (c)(1)(A)(ii) or subsection (c)(1)(A)(iii) of this Section, whichever is less.

2)         A hospital wishing to appeal the calculation of its rates must notify the Department within 30 days after receipt of the rate change notification.

d)         Method of Payment

1)         General Rule.  Unless the provisions of subsection (d)(2) of this Section apply, hospitals are paid for each discharge based on the submission of a discharge bill.  Payments for inpatient hospital services furnished by an excluded distinct part psychiatric or a rehabilitation unit of a hospital are made in accordance with 89 Ill. Adm. Code 148.270(b).

2)         Special Interim Payment for Unusually Long Lengths of Stay

A)        First Interim Payment.  A hospital may request an interim payment after a Medicaid client has been in the hospital at least 60 days.  Payment for the interim bill is determined as if the bill were a final discharge bill and includes any outlier payment determined as of the last day for which services have been billed.

B)        Additional Interim Payments.  A hospital may request additional interim payments at intervals of at least 60 days after the date of the first interim bill submitted under subsection (d)(2)(A) of this Section.  Payment for these additional interim bills, as well as the final bill, is determined as if the bill were the final bill with appropriate adjustments made to the payment amount to reflect any previous interim payment made under the provisions of subsection (d)(2).

3)         Outlier Payments.  Except as provided in subsection (d)(2) of this Section, payment for outlier cases (described in Section 149.105) are not made on an interim basis. The outlier payments are made based on submitted bills and represent final payment.

e)         Reductions to Total Payments

1)         Copayments.  Copayments are assessed in accordance with 89 Ill. Adm. Code 148.190.

2)         Third Party Payments.  Hospitals shall determine that services rendered are not covered, in whole or in part, under any other state or federal medical care program or under any other private group indemnification or insurance program, health maintenance organization, preferred provider organization, workers compensation or the tort liability of any third party.  To the extent that such coverage is available, the Department's payment obligation shall be reduced.

f)          Effect of Change of Ownership on Payments Under the DRG Prospective Payment System.  When a hospital's ownership changes, the following rule applies:  Payment for the cost of inpatient hospital services for each patient, including outlier payments, as provided under subsection (b) of this Section, will be made to the entity that is the legal owner on the date of discharge.  Payments will not be prorated between the buyer and seller.

1)         The owner on the date of discharge is entitled to submit a bill for all inpatient hospital services furnished to a Medicaid client regardless of when the client's coverage began or ended during a stay, or of how long the stay lasted.

2)         Each bill submitted must include all information necessary for the Department to compute the payment amount, whether or not some of the information is attributable to a period during which a different party legally owned the hospital.

(Source:  Amended at 28 Ill. Reg. 2836, effective February 1, 2004)