Section 149.5  Diagnosis Related Grouping (DRG) Prospective Payment System (PPS) (Repealed)

 

(Source:  Repealed at 38 Ill. Reg. 15477, effective July 2, 2014)

 

Section 149.10  Applicability of Other Provisions

 

Effective for dates of discharge on or after July 1, 2014, the following provisions, in addition to those provisions specifically cited in this Part, shall apply to hospitals reimbursed under the Diagnosis Related Grouping Prospective Payment System (DRG PPS):

 

a)         The general requirements applicable to all hospital services, as described in General Provisions of 89 Ill. Adm. Code 148, Subpart A.

 

b)         Organ transplant services, as described in 89 Ill. Adm. Code 148.82.

 

c)         Hospital outpatient and hospital-based clinic services, as described in 89 Ill. Adm. Code 148.140.

 

d)         Payment for pre-operative days and patient specific orders, as described in 89 Ill. Adm. Code 148.180.

 

e)         Copayments, as described in 89 Ill. Adm. Code 148.190.

 

f)         Filing cost reports, as described in 89 Ill. Adm. Code 148.210.

 

g)         Review procedure, as described in 89 Ill. Adm. Code 148.310.

 

(Source:  Amended at 38 Ill. Reg. 15477, effective July 2, 2014)

 

Section 149.25  General Provisions

 

Effective for dates of discharge on or after July 1, 2014:

 

a)         Basis of Payment

 

1)         Payment on a Per Discharge Basis

 

A)        Under the DRG PPS, hospitals are paid a predetermined amount per discharge for inpatient hospital services furnished to persons receiving coverage under the Medicaid Program.

 

B)        The DRG prospective payment rate for each discharge (as defined in subsection (b)) is determined according to the methodology described in Sections 149.100 and 149.150, as appropriate.  An additional payment is made, in accordance with Section 149.105, as appropriate.  The rates paid shall be those in effect on the date of admission.

 

2)         Payment in Full

 

A)        The DRG prospective payment amount paid for inpatient hospital services is the total Medicaid payment for the inpatient operating costs  incurred in furnishing services covered under the Medicaid Program.

 

B)        Except as provided for in Section 149.100(g), the full DRG prospective payment amount, as determined under Section 149.100, is made for each inpatient stay.

 

(Source:  Amended at 38 Ill. Reg. 15477, effective July 2, 2014)

 

Section 149.50  Hospital Inpatient Services Subject to and Excluded from the DRG Prospective Payment System

 

Effective for dates of discharge on or after July 1, 2014:

 

a)         Inpatient Services Subject to Submission for DRG Grouping.  All hospital inpatient services provided to enrollees of the Medical Assistance programs, without regard to balance due or expected reimbursement methodology to be applied by the Department, must be documented on a claim and submitted to the Department.  The Department shall process and group all hospital inpatient claims through the DRG grouper.

 

b)         Excluded from DRG PPS reimbursements are:

 

1)         Psychiatric services provided by:

 

A)        A psychiatric hospital, as described in 89 Ill. Adm. Code 148.25(d)(1).

 

B)        A distinct part psychiatric unit, as described in 89 Ill. Adm. Code 148.25(c)(1).

 

2)         Physical rehabilitation services provided by:

 

A)        A rehabilitation hospital, as described in 89 Ill. Adm. Code 148.25(d)(2).

 

B)        A distinct part rehabilitation unit, as described in 89 Ill. Adm. Code 148.25(c)(2).

 

3)         Services provided by a long term acute care hospital, as described in 89 Ill. Adm. Code 148.25(d)(4), that are not psychiatric services or services described in subsections (b)(6) through (b)(7).

 

4)         Inpatient services, reimbursed pursuant to 89 Ill. Adm. Code 148.330.

 

5)         Services provided by a large public hospital, as described in 89 Ill. Adm. Code 148.25(a)(3).

 

6)         Services provided by a large public hospital, as described in 89 Ill. Adm. Code 148.25(a)(1) and (2), through December 31, 2015.

 

7)         Hospital residing long term care services, as described in 89 Ill. Adm. Code 148.50(c).

 

8)         Sub-acute alcoholism and substance abuse treatment services, as defined in 77 Ill. Adm. Code 2090.40.

 

9)         Inpatient services provided by Children's Specialty Hospitals as described in 89 Ill. Adm. Code 148.116.

 

10)         Non-transplant inpatient services provided by non-cost reporting hospitals, which will be reimbursed at a rate equal to the higher of $672.24 per day or the provider's per diem rate in effect on June 30, 2014.

 

(Source:  Amended at 41 Ill. Reg. 1059, effective January 19, 2017)

 

Section 149.75  Conditions for Payment Under the DRG Prospective Payment System

 

Effective for dates of discharge on or after July 1, 2014:

 

a)         General Requirements

 

1)         A hospital must meet the conditions of this Section to receive payment under the DRG PPS for inpatient hospital services furnished to persons receiving coverage under the Medicaid Program.

 

2)         If a hospital fails to comply fully with these conditions with respect to inpatient hospital services furnished to one or more Medical Assistance clients, the Department may, as appropriate:

 

A)        Withhold Medicaid payments (in full or in part) to the hospital until the hospital provides adequate assurances of compliance; or

 

B)        Terminate the hospital's Provider Agreement pursuant to 89 Ill. Adm. Code 140.16.

 

b)         Hospital Utilization Control:  Hospitals and distinct part units that participate in Medicare (Title XVIII) must use the same utilization review standards and procedures and review committee for Medical Assistance as they use for Medicare.  Hospitals and distinct part units that do not participate in Medicare (Title XVIII) must meet the utilization  review plan requirements in 42 CFR, Ch. IV, Part 456 (October 1, 2013).  Utilization control requirements for inpatient psychiatric hospital care in a psychiatric hospital, as defined in 89 Ill. Adm. Code 148.25(d)(1), shall be in accordance with federal regulations.

 

c)         Medical Review Requirements:  Admissions and Quality Review

Hospital utilization review committees, a subgroup of the utilization review committee, or the hospital's designated professional review organization (PRO) shall review, on an ongoing basis, the following:

 

1)         The medical necessity, reasonableness and appropriateness of inpatient hospital admissions and discharges.

 

2)         The medical necessity, reasonableness and appropriateness of inpatient hospital care for which additional payment is sought under the outlier provisions of Section 149.105.

 

3)         The validity of the hospital's diagnostic and procedural information.

 

4)         The completeness, adequacy and quality of the services furnished in the hospital.

 

5)         Other medical or other practice with respect to program participants or billing for services furnished to program participants.

 

d)         Medical Review Requirements:  DRG Validation.  The Department, or its agent, may require and perform pre- or-post-payment review of diagnosis and procedure codes to verify that the diagnostic and procedural coding, submitted by the hospital and used by the Department for DRG assignment, is substantiated by the corresponding medical records.  The review may be undertaken by way of a sample of discharges.  The review may, at the sole discretion of the Department, take place at the hospital or away from the hospital site.

 

e)         Utilization Review Requirements:  The Department, or its designated peer review organization, as described in 89 Ill. Adm. Code 148.240(j), may conduct pre-admission, concurrent, pre-payment, and/or post-payment reviews, as defined at 89 Ill. Adm. Code 148.240. 

 

f)         Furnishing of Inpatient Hospital Services Directly or Under Other Arrangements

 

1)         The payments made under the PPS are payment in full for all inpatient hospital services other than for the services of non hospital-based physicians to individual program participants and the services of certain hospital-based physicians as described in subsection (f)(1)(B).

 

A)        Hospital-based physicians who may not bill separately on a fee-for-service basis are:

 

i)          A physician whose salary is included in the hospital's cost report for direct patient care.

 

ii)         A teaching physician who provides direct patient care, if the salary paid to the teaching physician by the hospital or other institution includes a component for treatment services.

 

B)        Hospital-based physicians who may bill separately on a fee-for-service basis are:

 

i)          A physician whose salary is not included in the hospital's cost report for direct patient care.

 

ii)         A teaching physician who provides direct patient care, if the salary paid to the teaching physician by the hospital or other institution does not include a component for treatment services.

 

iii)        A resident, when, by the terms of his or her contract with the hospital, he or she is permitted to and does bill private patients and collect and retain the payments received for those services.

 

iv)        A hospital-based specialist who is salaried, with the cost of his or her services included in the hospital reimbursement costs, when, by the terms of his or her contract with the hospital, he or she may charge for professional services and does, in fact, bill private patients and collect and retain the payments received.

 

v)         A physician holding a nonteaching administrative or staff position in a hospital or medical school, but only to the extent that he or she maintains a private practice and bills private patients and collects and retains payments made.

 

2)         Charges are to be submitted on a fee-for-service basis only when the physician seeking reimbursement has been personally involved in the services being provided.  In the case of surgery, it means presence in the operating room, performing or supervising the major phases of the operation, with full and immediate responsibility for all actions performed as a part of the surgical treatment.

 

(Source:  Amended at 38 Ill. Reg. 15477, effective July 2, 2014)

 

Section 149.100  Methodology for Determining DRG PPS Payment Rates

 

Effective for dates of discharge on or after July 1, 2014:

 

a)         Inpatient hospital services that are not excluded from the DRG PPS pursuant to Section 149.50(b) shall be reimbursed as determined in this Section.

 

b)         Total DRG PPS Payment.  Under the DRG PPS, services to inpatients who are:

 

1)         Discharges shall be paid pursuant to subsection (c).

 

2)         Transfers shall be paid pursuant to subsection (g).

 

3)         The total payment for an inpatient stay will equal the sum of the payment determined in subsection (c) or (g), as applicable, and any applicable adjustments to payment specified in 89 Ill. Adm. Code 148.290.

 

c)         DRG PPS Payment for Discharges.  The reimbursement to hospitals for inpatient services based on discharges shall be the product, rounded to the nearest hundredth, of the following:

 

1)         The greater of:

 

A)        1.0000; or

 

B)        highest policy adjustment factor, as defined in subsection (f), for which the inpatient stay qualifies.

 

2)         The sum of the DRG base payment, as defined in subsection (d), and any applicable outlier adjustment, as determined in Section 149.105, for which the claim qualifies.

 

d)         For in-state (as defined in 89 Ill. Adm. Code 148.140), non-Large Public Hospitals as defined in 89 Ill. Adm. Code 148.25, the DRG base payment for a claim shall be the product, rounded to the nearest hundredth, of:

 

1)         The DRG weighting factor of the DRG and SOI, to which the inpatient stay was assigned by the DRG grouper.

 

2)         The DRG base rate, equal to the sum of:

 

A)        The product, rounded to the nearest hundredth, of the Medicare IPPS labor share percentage, Medicare inpatient prospective payment system (IPPS) wage index, statewide standardized amount and graduate medical education (GME) factor.

 

B)        The product, rounded to the nearest hundredth, of the Medicare IPPS non-labor share percentage, the statewide standardized amount and the GME factor.

 

3)         Effective July 1, 2018, for out-of-state, cost reporting hospitals, the DRG base payment for a claim shall be the product, rounded to the nearest hundredth, of:

 

A)        The DRG weighting factor of the DRG and SOI, to which the inpatient stay was assigned by the DRG grouper; and

 

B)        The DRG base rate, equal to the sum of:

 

i)          The product, rounded to the nearest hundredth, of the Medicare IPPS labor share percentage, Medicare IPPS wage index, the out-of-state standardized amount and the GME factor.

 

ii)         The product, rounded to the nearest hundredth, of the Medicare IPPS non-labor share percentage, the out-of-state standardized amount and the GME factor.

 

e)         Medicare IPPS Wage Index.  For purposes of this Section, the Medicare IPPS wage index is determined based on:

 

1)         For Medicare IPPS hospitals that are in-state or are out-of-state medical assistance  cost reporting hospitals, the wage index is based on the Medicare inpatient prospective payment system post-reclass wage index effective at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred; except, for the calendar year beginning January 1, 2014, the wage index is based on the Medicare IPPS hospital post-reclass wage index effective October 1, 2012.

 

2)         For in-state non-Medicare IPPS hospitals and out-of-state non-medical assistance cost reporting hospitals, the wage index is based on the Medicare inpatient prospective payment system wage index for the hospital's Medicare CBSA effective at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred; except, for the calendar year beginning January 1, 2014, the wage index is based on the Medicare IPPS wage index for the hospital's Medicare CBSA effective October 1, 2012.

 

f)         Policy Adjustments.  Claims for inpatient stays that meet certain criteria will qualify for further adjustments to payment.

 

1)         Transplantation Services

 

A)        Policy adjustment factor: 2.11.

 

B)        Qualifying Criteria

 

i)          The hospital meets all requirements to perform transplantation services, including but not limited to those detailed in 89 Ill. Adm. Code 148.82.

 

ii)         The claim has been grouped to one of the following DRGs:

 

001      Liver transplant.

002      Heart and/or lung transplant.

003      Bone marrow transplant.

006      Pancreas transplant.

440      Kidney transplant.

 

2)         Trauma Services

 

A)        Policy adjustment factor:

 

i)          2.9100, if the hospital is a level I trauma center.

 

ii)         2.7600, if the hospital is a level II trauma center.

 

B)        Criteria:

 

i)          Hospital is recognized by the Department of Public Health as a level I or II trauma center on the date of admission.

 

ii)         The claim has been grouped to one of the following DRG:

 

020      Craniotomy for trauma.

055      Head trauma, with coma lasting more than one hour or no coma.

056      Brain contusion/laceration and complicated skull fracture, coma less than one hour or no coma.

057      Concussion, closed skull fracture not otherwise specified, uncomplicated intracranial injury, coma less than one hour or no coma.

135      Major chest and respiratory trauma.

308      Hip and femur procedures for trauma, except joint replacement.

384      Contusion, open wound and other trauma to skin and subcutaneous tissue.

841      Extensive third degree burns with skin graft, as of July 1, 2018.

842      Full thickness burns with graft, as of July 1, 2018.

843      Extensive burns without skin graft, as of July 1, 2018.

844      Partial thickness burns with or without graft, as of July 1, 2018.

910      Craniotomy for multiple significant trauma.

911      Extensive abdominal/thoracic procedures for multiple significant trauma.

912      Musculoskeletal and other procedures for multiple significant trauma.

930      Multiple significant trauma, without operating room procedure.

 

3)         Perinatal Services

 

A)        Policy adjustment factor:

 

i)          1.3500, if the DRG to which the claim is grouped has an SOI of 1.

 

ii)         1.4300, if the DRG to which the claim is grouped has an SOI of 2.

 

iii)        1.4100, if the DRG to which the claim is grouped has an SOI of 3.

 

iv)        1.5400, if the DRG to which the claim is grouped has an SOI of 4.

 

B)        Criteria:

 

i)          Hospital was recognized by the Department of Public Health as a level III perinatal center on the date of admission. Effective July 1, 2018, hospital was recognized by the Department of Public Health as a level II or II+ or III perinatal center on the date of admission.

 

ii)         The claim has been grouped to one of the following major diagnostic categories (MDC):

 

14        Pregnancy, childbirth and puerperium.

 

15        Newborn and other neonates.

 

4)         Safety Net

 

A)        Policy adjustment factor: Effective for dates of service January 1, 2024 through June 30, 2024, $210 per general acute and psychiatric care day, excluding Medicare dual eligible days.

 

B)        Qualifying criteria: safety-net hospital defined in 305 ILCS 5/5-5e.1.

 

C)        Effective for dates of service on or after July 1, 2024, through December 31, 2025, excluding Medicare dual eligible days, based on the MIUR determination effective October 1, 2023, the safety net policy adjustment factor shall be:

 

i)          $425 per general acute and psychiatric day for safety net hospitals with an applicable MIUR equal to or greater than 70%.

 

ii)         $300 per general acute and psychiatric day for safety net hospitals with an applicable MIUR equal to or greater than 50% and less than 70%.

 

iii)        $225 per general acute and psychiatric day for safety net hospitals with an applicable MIUR equal to or greater than 40% and less than 50%.

 

iv)        $210 per general acute and psychiatric day for safety net hospitals with an applicable MIUR less than 40%.

 

D)        Effective for dates of service on or after January 1, 2026 through December 31, 2026, qualification for the safety net policy adjustment factor shall be redetermined using the MIUR determination effective October 1, 2025 and the Safety Net policy adjustment factors in subsections (f)(4)(C)(i) through (f)(4)(C)(iii) in this Section shall be adjusted January 1, 2026 by applying a uniform factor to spend an approximate amount of $50,000,000 in calendar year 2026 using state fiscal year 2024 general acute care days and psychiatric days, excluding Medicare dual eligible days, for all qualifying hospitals as the basis.

 

E)        Effective for dates of service on or after July 1, 2024, through December 31, 2026, the safety net policy adjustment factor in subsections (f)(4)(C) and (D) shall be increased by $200 per day for low volume safety net hospitals.

 

i)          For dates of service July 1, 2024 through December 31, 2025, low volume is defined as a safety net hospital providing less than 11,000 inpatient acute care and psychiatric care days, excluding Medicare dual eligible days, during state fiscal year 2022 for admissions received by the Department prior to October 1, 2023.

 

ii)         For dates of service January 1, 2026 through December 31, 2026, low volume is defined as a safety net hospital providing less than 11,000 inpatient acute care and psychiatric care days, excluding Medicare dual eligible days, during state fiscal year 2023 for admissions received by the Department prior to October 1, 2024.

 

g)         DRG PPS Payment for Transfers.  The reimbursement to hospitals for inpatient services provided to transfers shall be the lesser of:

 

1)         The amount that would have been paid pursuant to subsection (c) had the inpatient been a discharge; or

 

2)         The product, rounded to the nearest hundredth, of the following:

 

A)        The quotient resulting from dividing the amount that would have been paid pursuant to subsection (c) had the inpatient been a discharge by the DRG average length of stay for the DRG to which the inpatient claim has been assigned.

 

B)        The length of stay plus the constant 1.0.

 

h)         Updates to DRG PPS Reimbursement.  The Department may annually review the components listed in subsection (c) and make adjustments as needed.  The DRG Grouper shall be updated at least triennially and no more frequently than annually.

 

i)          Definitions

 

"Allocated static payments" means the adjustment payments made to the hospital pursuant to 89 Ill. Adm. Code 148.105, 148.115, 148.126, 148.295, 148.296 and 148.298 during State fiscal year 2011, excluding those payments that continue after July 1, 2014, pursuant to the methodologies outlined in rule as of February 21, 2014 (see https://www.illinois.gov/hfs/medicalproviders/hospitals/

hospitalratereform/Pages/default.aspx), as determined by the Department, allocated to general acute services based on the ratio of general acute claim charges to total inpatient claim charges determined using inpatient base period claims data.

 

"Allowed amounts", effective January 1, 2024, means the calculated fee schedule amount prior to any adjustment for secondary payer amounts for inpatient priced claims via the DRG-PPS, except Medicare dual eligible claims which are included up to the amount of medical assistance liability on the claim.

 

"Discharge" means a hospital inpatient that:

 

has been formally released from the hospital, except when the patient is a transfer; or

 

died in the hospital.

 

"DRG" means diagnosis related group, as defined in the DRG grouper, based on the principal diagnosis, surgical procedure used, age of patient, etc.

 

"DRG average length of stay" means, for each DRG and SOI combination, the national arithmetic mean length of stay for that combination rounded to the nearest tenth, as published by 3M Health Information Systems for the DRG grouper.

 

"DRG grouper" means the version of the All Patient Refined Diagnosis Related Grouping (APR-DRG) software distributed by 3M Health Information Systems being used by the Department for pricing fee-for-service hospital inpatient acute care claims and is updated every 3 years in accordance with 305 ILCS 5/14-12(a), (b) and (e).

 

"DRG PPS" means the DRG prospective payment system described in this Part.

 

"DRG weighting factor" means each DRG and SOI combination shall equal the product, rounded to the nearest ten-thousandth, of the national weighting factor for that combination, as published by 3M Health Information Systems for the DRG grouper and the Illinois experience adjustment.

 

"GME factor" means the Graduate Medical Education factor applied to major teaching hospitals, as defined in 89 Ill. Adm. Code 148.25(h). Simulated payments under the new inpatient system with GME factor adjustments shall be $3 million greater than simulated payments under the new inpatient system would have been without the GME factor adjustments, using inpatient base period paid claims data.

 

"Illinois experience adjustment" means:

 

for the calendar year beginning January 1, 2014, a quotient, computed by dividing the constant 1.0000 by the arithmetic mean 3M APR-DRG national weighting factors of claims for inpatient stays subject to reimbursement under the DRG PPS using inpatient base period paid claims data, rounded to the nearest ten-thousandth;

 

for subsequent calendar years, the factor applied to 3M APR-DRG national weighting factors, when updating DRG grouper versions determined such that the arithmetic mean DRG weighting factor under the new DRG grouper version is equal to the arithmetic mean DRG weighting factor under the prior DRG grouper version using inpatient base period claims data.

 

"Inpatient base period claims data" means:

 

Prior to July 1, 2018, State fiscal year 2011 inpatient medical assistance fee-for-service paid claims data, excluding Medicare dual eligible claims, for DRG PPS payment for services provided in State fiscal years 2015, 2016 and 2017; for subsequent dates of service, the most recently available adjudicated 12 months of inpatient paid claims data to be identified by the Department.

 

Effective July 1, 2018, State fiscal year 2015 inpatient medical assistance claims data allowed amounts, for DRG PPS payment for services provided in State fiscal years 2019 and 2020 for subsequent dates of service, the most recently available adjudicated 12 months of inpatient paid claims data to be identified by the Department.

 

"Inpatient stay" means a formal admission into a hospital, pursuant to the order of a licensed practitioner permitted by the state in which the hospital is located to admit patients to a hospital that requires at least one overnight stay.

 

"Length of stay" means the number of days the patient was an inpatient in the hospital, with the day the patient became a discharge or transfer not counting toward the length of stay.

 

"Medical assistance" means one of the programs administered by the Department that provides health care coverage to Illinois residents.

 

"Medicare CBSA" means the Core-Based Statistical Areas for a hospital's location effective in the Medicare inpatient prospective payment system at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred.

 

"Medicare IPPS labor share percentage" means the Medicare inpatient prospective payment system operating standardized amount labor share percentage for the federal fiscal year ending three months prior to the calendar year during which the discharge occurred; except, for the calendar year beginning January 1, 2014, the labor share percentage in the Medicare inpatient prospective payment system for the federal fiscal year beginning October 1, 2012, which is 0.6880 for a hospital with a Medicare IPPS wage index greater than 1.0 or 0.6200 for all other hospitals.

 

"Medicare IPPS non-labor share" means the difference of 1.0 and the Medicare IPPS labor share percentage.

 

"MDC" means major diagnostic category – group of similar DRGs, such as all those affecting a given organ system of the body.

 

"Out-of-state standardized amount", effective July 1, 2018, means, for cost-reporting hospitals located outside of Illinois that are not included in the in-state standardized amount definition, the average amount as the basis for the DRG base rate established by the Department, such that simulated DRG PPS allowed amounts, without PA 97-689 reductions or GME factor adjustments, using general acute hospital inpatient based period claims data, are equal to the sum of inpatient based period claims data allowed amounts.

 

"SOI" means one of four subclasses of each DRG, as published by 3M Health Information Systems for the DRG grouper that relate to severity of illness (the extent of physiologic decompensation or organ system loss of function experienced by the patient) and risk of (the likelihood of) dying.

 

"Statewide standardized amount" means, for all Illinois hospitals and out-of-state hospitals that are designated a level I pediatric trauma center or a level I trauma center by the Illinois Department of Public Health as of December 1, 2017, the average amount as the basis for the DRG base rate established by the Department of simulated DRG PPS payments from the inpatient base period claims data such that the total simulated DRG PPS payments, without the GME factor adjustments is equal to the sum of inpatient based period claims data allowed amount. Effective January 1, 2024, the "statewide standardized amount", as established for January 1, 2024, is increased by 10%.

 

"Transfer" means a hospital inpatient that has been placed in the care of another hospital, except that a transfer does not include an inpatient claim that has been assigned to DRG 580 (Neonate, transferred, less than five days old, not born here) or 581 (Neonate, transferred, less than five days old, born here).

 

(Source:  Amended at 49 Ill. Reg. 2090, effective February 10, 2025)

 

Section 149.105  Payment For Outlier Cases

 

Effective for dates of discharge on or after July 1, 2014:

 

a)         Outlier adjustment determination.  Except as provided in subsection (b), the Department may provide for additional payment, approximating a hospital's marginal cost of covered inpatient hospital services beyond thresholds specified by the Department.  To qualify for the payment, the claim must meet the following criteria:

 

1)         The services on the claim must be reimbursable under the DRG PPS.

 

                        2)         The DRG grouper must be able to assign the claim to a DRG.

 

3)         The estimated claim cost for a claim exceeds the claim outlier threshold for the DRG to which the claim has been assigned.

 

b)         Estimated Claim Cost.  Estimated claim cost is based on the product of the claim total covered charges and the hospital's Medicare IPPS outlier cost-to-charge ratio.  The Medicare IPPS outlier cost-to-charge ratio is determined based on:

 

1)         For Medicare IPPS hospitals, the outlier cost-to-charge ratio is based on the sum of the Medicare inpatient prospective payment system hospital-specific operating and capital outlier cost-to-charge ratios effective at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred.

 

2)         For non-Medicare IPPS hospitals, the outlier cost-to-charge ratio is based on the sum of the Medicare inpatient prospective payment system statewide average operating and capital outlier cost-to-charge ratios for urban hospitals for the state in which the hospital is located, effective at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred.

 

c)         Exclusions.  No outlier adjustment shall be paid on claims that are excluded from the DRG PPS pursuant to Section 149.50(b).

 

d)         Outlier Adjustment Payment.  The amount of the additional payment shall be determined as the product, rounded to the nearest hundredth, of:

 

1)         the difference resulting from subtracting the claim outlier threshold from the estimated claim cost; and

 

2)         the applicable SOI adjustment factor, rounded to the nearest hundredth.

 

e)         Definitions

 

In addition to terms elsewhere defined in this subchapter, terms relating to outlier adjustments are defined as follows:

 

"Claim outlier threshold" means the sum of the DRG base payment, as defined in Section 149.100(d) and the fixed loss threshold.

 

"Fixed loss threshold" means the Medicare fixed loss threshold in effect on October 1, 2012.  The Department is authorized to update the "fixed loss threshold". Base rates must be updated within 12 months after the update.

 

"MDC" means major diagnostic category.

 

"Medicare CBSA" means the Core-Based Statistical Areas for a hospital's location effective in the Medicare inpatient prospective payment system at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred.

 

SOI adjustment factor" means for SOI 1, 0.8000; for SOI 2, 0.8000; for SOI 3, 0.9500; for SOI 4, 0.9500.

 

"Total covered charges" means the amount entered for revenue code 001 in column 53 (Total Charges) on the Uniform Billing Form (form CMMS 1450), or one of its electronic transaction equivalents.

 

(Source:  Amended at 38 Ill. Reg. 15477, effective July 2, 2014)

 

Section 149.125  Special Treatment of Certain Facilities (Repealed)

 

(Source:  Repealed at 38 Ill. Reg. 15477, effective July 2, 2014)

 

Section 149.140  Methodology for Determining Primary Care Access Health Care Education Payments (Repealed)

 

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

 

Section 149.150  Payments to Hospitals Under the DRG Prospective Payment System (Repealed)

 

(Source:  Repealed at 38 Ill. Reg. 15477, effective July 2, 2014)

 

Section 149.175  Payments to Contracting Hospitals (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)

 

Section 149.200  Admitting and Clinical Privileges (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)

 

Section 149.205  Inpatient Hospital Care or Services by Non-Contracting Hospitals Eligible for Payment (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)

 

Section 149.225  Payment to Hospitals for Inpatient Services or Care not Provided under the ICARE Program (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)

 

Section 149.250  Contract Monitoring (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)

 

Section 149.275  Transfer of Recipients (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)

 

Section 149.300  Validity of Contracts (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)

 

Section 149.305  Termination of ICARE Contracts (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)

 

Section 149.325  Hospital Services Procurement Advisory Board (Repealed)

 

(Source:  Repealed at 16 Ill. Reg. 6195, effective March 27, 1992)