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Elizabeth M. Whitehorn, Director

Provider Notice issued 08/08/14

Hospital Rate Reform - Claims Processing Update and Additional Rate Reform Guidance

​To: Enrolled Hospitals: Chief Executive Officers, Chief Financial Officers, and Patient Accounts Managers; Ambulatory Surgical Treatment Centers (ASTCs); and Renal Dialysis Facilities​
Date:​ ​August 8, 2014
​Re: Hospital Rate Reform - Claims Processing Update and Additional Rate Reform Guidance​

New Systems Claims Processing

Per the Informational Notice dated June 26, 2014 , the department has been holding inpatient claims with dates of discharge on or after July 1 and outpatient claims with dates of service on or after July 1. The week of August 4, 2014, the department will begin processing the held inpatient claims under the new payment methodologies. Outpatient claims will continue to be held until internal testing of the new system is complete, and hospitals will be notified when those claims will be released from the hold. The department will continue to assist providers experiencing cash flow issues due to this delay in payment.

Additional Rate Reform Guidance

  • Actual Acquisition Cost (AAC) on 340B-Purchased Drugs - Effective for dates of service on or after July 1, 2014, hospitals will no longer be required to report the AAC on 340B-purchased drugs on outpatient institutional claims. This change comes as a result of an update to the Enhanced Ambulatory Patient Group (EAPG) pricing logic. However, hospitals and renal dialysis facilities must continue to report the AAC on renal dialysis claims containing 340B-purchased drugs identified on the Medicaid Reimbursement web page, under the Renal Dialysis Injectable Drug listing. Providers must bill all 340B-purchased drugs with the UD modifier to ensure proper reporting under the federal Drug Rebate Program.

  • New Add On Payments – System changes for the safety net and psychiatric add-on payments described in the June 26th informational notice have not been completed. Claims released from the hold and those processed prior to the programming will not have these payments included in total reimbursement. Once the programming is complete, claims will be adjusted to reflect the add-on payments.

  • Clarification of Normal Newborn Claim Reimbursement – As relayed in the Informational Notice dated April 14, 2014, effective with dates of discharge on or after July 1, 2014, payment will now be made on normal newborn claims, including disproportionate share payments. As has been past policy, these normal newborn claims will not be eligible for Medicaid Percentage Adjustment (MPA) and Medicaid High Volume Adjustment (MHVA) payments.

Any questions regarding this notice or inquiries regarding assistance with cash flow issues may be directed to the Bureau of Hospital and Provider Services at 1-877-782-5565.

Theresa A. Eagleson, Administrator

Division of Medical Programs