Provider Notice issued 04/14/14

Hospital Rate Reform Effective with Inpatient Discharges and Outpatient Dates of Service Beginning July 1, 2014

The Department of Healthcare and Family Services (HFS) recently filed proposed administrative rule amendments to implement new inpatient and outpatient reimbursement systems. This change was mandated under Public Act 097-0689(pdf). HFS has previously released two Informational Notices regarding the new systems:

Hospital Inpatient and Outpatient Reimbursement Systems

Additional Information Regarding Hospital Inpatient and Outpatient Reimbursement Systems

The purpose of this notice is to explain in greater detail some of the planned changes hospitals and ASTCs can expect in relation to policy and billing requirements.

Inpatient Claims

HFS will begin processing of inpatient claims effective with discharges beginning July 1, 2014, with Grouper Version 30 of the 3M™ All Patient Refined Diagnosis Related Group (APR-DRG) payment system. The department plans to update the Grouper Version each January. Effective January 1, 2015, the department will update to Grouper Version 32.

• Hospitals and Distinct Part Units Excluded from APR-DRG Payment System – Psychiatric hospitals and distinct part units; rehabilitation hospitals and distinct part units; Long Term Acute Care (LTAC) hospitals; Illinois children’s specialty hospitals with less than 50 beds; non-cost reporting out-of-state hospitals; hospitals owned by and located in an Illinois county with a population exceeding three million; and hospitals organized under the University of Illinois Hospital Act are all excluded.

• Children’s Hospitals – Children’s hospitals that will no longer be paid on a per diem basis for their general inpatient care will continue to use their current provider number/NPI.

• Discharge Date on or after July 1, 2014 - Any discharge on or after July 1, 2014 will be processed and reimbursed under the APR-DRG system. For hospitals that will be reimbursed under APR-DRG beginning July 1st, any interim claims that have been paid with dates of service prior to July 1st must be voided and the entire admission rebilled as an admission through discharge claim after the patient is discharged. The department’s Quality Improvement Organization, eQHealth Solutions, Inc., will continue to follow these stays through the point of discharge.

• Claims for Normal Newborns - The department has historically required hospitals to submit claims for newborns in addition to the mothers’ claims; however, reimbursement was made on the mother’s bill to cover services provided to both the mother and the normal newborn child. Normal newborns’ claims will now be processed and paid separately from the mothers’ claims, and will be eligible for disproportionate share payments if applicable. Hospitals are encouraged to complete the Record of Birth (Form IL 444-2636) and fax it to the Newborn Unit at the Department of Human Services before the baby leaves the hospital in order to expedite the assignment of the baby’s Recipient Identification Number.

• Value Code 54 for Birth Weight - Hospitals are reminded that beginning with admissions October 1, 2012 and after, Value Code 54 is required for newborns who are 14 days of age or less on the date of admission. This Value Code is to be reported with the baby’s birth weight in grams, right-justified to the left of the dollar/cents delimiter, and will be used in the APR-DRG determination. Claims that do not have this value reported will be rejected.

• Transplants – Inpatient transplants as identified in Topic H-254.11 of the Handbook for Hospital Services (pdf) will no longer have day restrictions relating to pre-transplant claims, the actual transplant claim, and post-transplant claims. Inpatient transplants will be billed admission through discharge on one claim. Transplant claims still must be submitted to the transplant coordinator.

• Bone Marrow Searches for Transplant Cases – Payment for bone marrow searches will be capped at 50% of charges, up to $25,000.00. This service will continue to be paid via C-13 payment voucher.

• Perinatal Level III Centers – Hospitals designated by the Illinois Department of Public Health as a Perinatal Level III center will receive enhanced payment as identified in the October 4, 2013 informational notice, Additional Information Regarding Inpatient and Outpatient Reimbursement Systems.

• Trauma Level l and Trauma Level II Hospitals – Hospitals designated by the Illinois Department of Public Health as a Trauma Level l or Trauma Level II hospital will receive enhanced payment as identified in the October 4, 2013 informational notice, Additional Information Regarding Inpatient and Outpatient Reimbursement Systems.

Outpatient Claims

HFS will begin processing of outpatient claims effective with dates of service beginning July 1, 2014, with Grouper Version 3.7 of the Enhanced Ambulatory Patient Groups (EAPG) payment system. The department plans to update the Grouper Version each January thereafter.

• Ambulatory Procedures Listing – HFS will continue to publish this listing of procedures most appropriately performed in the hospital outpatient setting, but will no longer assign a rate to each specific procedure code. An outpatient claim must contain at least one procedure code or an emergency department or observation revenue code as listed in the APL.  

• Outpatient High Volume Adjuster – Safety Net and other hospitals meeting the criteria identified in the October 4, 2013 informational notice, Additional Information Regarding Inpatient and Outpatient Reimbursement Systems ,will receive enhanced payment.

• Service Line Date – Form Locator (FL) 45 Service Date will now be required for all outpatient claims.

• Emergency Department Services – Hospitals are still required to code emergency department Revenue Codes 0450, 0451, and 0456 with their associated HCPCS Codes as identified in the APL.

• Observation Services – Hospitals and ASTCs are still required to code observation services with Revenue Code 0762 and an associated HCPCs Code as identified in the APL, and note the number of hours in observation in FL 46 – Service Units. Additionally, providers must code a second Revenue Code 0762 line and identify HCPCS code G0378 in order for observation services to process correctly. The minimum billable observation time will be one hour.     

• Outpatient Emergency Department or Observation Prior to Admission - HFS will continue to allow the policy for hospitals to separately bill for an outpatient emergency room charge or observation services on the same date as an inpatient admission. If both emergency and observation services are provided, it is up to the hospital to determine which outpatient service will provide greater reimbursement and bill it separately from the inpatient claim. Charges incurred as a result of services provided by other outpatient departments prior to the patient’s admission, such as laboratory or radiology services, are to be shown on the inpatient claim.

• Chemotherapy Services Provided on the Same Date as Radiation Therapy – HFS will continue to allow the policy for hospitals to separately bill a fee-for-service claim for chemotherapy in addition to the radiation therapy outpatient hospital claim.

• Transplants – Outpatient stem cell transplants will no longer have day restrictions. Transplant claims still must be submitted to the transplant coordinator.

• Bone Marrow Searches for Transplant Cases - Payment for bone marrow searches will be capped at 50% of charges, up to $25,000.00. This service will continue to be paid via C-13 payment voucher.

• Series Claims – Hospitals will be able to bill multiple APL groups on a series claim. All claims must contain a series-billable revenue code and a series-billable APL code for each service date billed. Value code 80 is still required to identify the number of covered days.

• Modifiers – Hospitals are required to bill modifiers according to national coding guidelines.

• Medicare/Medicaid Combination Claims (Crossovers) – HFS will no longer use the number of departments visited to establish the Medicaid maximum allowable amount. The department will calculate its allowable amount based on the EAPG grouper.

• Reason for Visit /Form Locator 70 a-c – This field will be required if the claim contains Revenue Code 045X, 0516, 0526, or 0762.

3M™ Health Information Systems is offering the most current version of its EAPG Definitions Manual to providers at no charge through August 31, 2014, for the first year of implementation. Facilities that choose not to license the EAPG software from 3M™ may find it helpful. Facilities that do license the EAPG software from 3M™ automatically receive the EAPG Definitions Manual and its updates as part of their license agreement. Order information regarding the EAPG Definitions Manual is attached to this notice.  

Any questions regarding this notice may be directed to the Bureau of Hospital and Provider Services at 1-877-782-5565.

Theresa A. Eagleson, Administrator

Division of Medical Programs

Order Agreement For 3M™ Enhanced Ambulatory Patient Grouping Systems Definitions Manual Current Version For Providers Transitioning to EAPGs Reimbursement, Illinois (pdf)