4123-6-37.1. Payment of hospital inpatient services

(A) HPP.

Except as provided in paragraphs (A)(7) and (A)(8) of this rule, reimbursement for hospital inpatient services with a discharge date of February 1, 2020 or after shall be as follows:

(1)

(a) Reimbursement for hospital inpatient services, other than outliers as defined in paragraph (A)(3) of this rule, services provided by hospitals subject to reimbursement under paragraph (A)(4) of this rule, or acute or subacute inpatient detoxification services subject to reimbursement on a per diem basis under paragraph (A)(7) of this rule, shall be calculated using the applicable medicare severity diagnosis related group (MS-DRG) reimbursement rate for the hospital inpatient service under the medicare inpatient prospective payment system multiplied by a payment adjustment factor of 1.127 plus a new technology add-on payment (if applicable), according to the following formula:

MS-DRG reimbursement rate x 1.127 + new technology add-on payment (if applicable) = bureau reimbursement for hospital inpatient service.

(b) In the event the centers for medicare and medicaid services makes subsequent adjustments to the medicare reimbursement rates under the medicare inpatient prospective payment system as implemented by the materials specified in paragraph (A)(10) of this rule other than technical corrections, including but not limited to adjustments related to federal budget sequestration pursuant to the Budget Control Act of 2011, 125 Stat. 239, 2 U.S.C. 900 to 907d as amended as of the effective date of this rule, the "applicable medicare severity diagnosis related group (MS-DRG) reimbursement rate for the hospital inpatient service under the medicare inpatient prospective payment system" as specified in this paragraph shall be determined by the bureau without regard to such subsequent adjustments.

(2) In addition to the payment specified by paragraph (A)(1) of this rule, hospitals operating approved graduate medical education programs and receiving additional reimbursement from medicare for costs associated with these programs shall receive an additional per diem amount for direct graduate medical education costs associated with hospital inpatient services reimbursed by the bureau. Hospital specific per diem rates for direct graduate medical education shall be calculated annually by the bureau effective February first of each year, using the most current cost report data available from the centers for medicare and medicaid services, according to the following formula:

1.127 x [(total approved amount for resident cost + total approved amount for allied health cost)/ total inpatient days] = direct graduate medical education per diem.

Direct graduate medical education per diems shall not be applied to outliers as defined in paragraph (A)(3) of this rule, services provided by hospitals subject to reimbursement under paragraph (A)(4) of this rule, or acute or subacute inpatient detoxification services subject to reimbursement on a per diem basis under paragraph (A)(7) of this rule.

(3)

(a) Reimbursement for outliers as determined by medicare's inpatient prospective payment system outlier methodology shall be calculated using the applicable medicare severity diagnosis related group (MS-DRG) reimbursement rate for the hospital inpatient service under the medicare inpatient prospective payment system multiplied by a payment adjustment factor of 1.127 plus the applicable medicare operating outlier amount and medicare capital outlier amount plus a new technology add on payment (if applicable), according to the following formula:

(MS-DRG reimbursement rate x 1.127 ) + medicare operating outlier amount + medicare capital outlier amount + new technology add-on payment (if applicable) = bureau reimbursement for hospital inpatient service outlier.

(b) In the event the centers for medicare and medicaid services makes subsequent adjustments to the medicare reimbursement rates under the medicare inpatient prospective payment system as implemented by the materials specified in paragraph (A)(10) of this rule other than technical corrections, including but not limited to adjustments related to federal budget sequestration pursuant to the Budget Control Act of 2011, 125 Stat. 239, 2 U.S.C. 900 to 907d as amended as of the effective date of this rule, the "applicable medicare severity diagnosis related group (MS-DRG) reimbursement rate for the hospital inpatient service under the medicare inpatient prospective payment system" as specified in this paragraph shall be determined by the bureau without regard to such subsequent adjustments.

(4) Reimbursement for inpatient services provided by hospitals and distinct-part units of hospitals designated by the medicare program as exempt from the medicare inpatient prospective payment system shall be determined as follows:

(a) For hospitals the department of health and human services, centers for medicare and medicaid services maintains hospital-specific cost-to-charge ratio information on, reimbursement shall be equal to the hospital's allowable billed charges multiplied by the hospital's reported operating cost-to-charge ratio information referenced in paragraph (A)(10)(c) of this rule multiplied by a payment adjustment factor of 1.14, not to exceed seventy per cent of the hospital's allowed billed charges.

(b) For hospitals the department of health and human services, centers for medicare and medicaid services does not maintain hospital-specific cost-to-charge ratio information on, reimbursement shall be equal to the hospital's allowable billed charges multiplied by the applicable fiscal year 2020 urban or rural statewide average operating cost-to-charge ratio set forth in table 8A of the federal rule referenced in paragraph (A)(10) (b) of this rule (the Ohio average operating cost-to-charge ratio shall be used for hospitals outside the United States) multiplied by a payment adjustment factor of 1.14, not to exceed seventy per cent of the hospital's allowed billed charges.

(5) Reimbursement for inpatient services provided by hospitals and distinct-part units of hospitals that do not participate in the medicare program shall be calculated in accordance with the applicable provisions of paragraphs (A)(1) and (A)(3) of this rule using the national standardized amount for fiscal year 2020, full update, as found at 84 Fed. Reg. 42632 - 42634 ( 2019).

(6) Reimbursement for inpatient services provided by "new hospitals" as defined in 42 C.F.R. 412.300(b) as published in the October 1, 2019 Code of Federal Regulations shall be calculated in the same manner as provided under paragraph (A)(4)(b) of this rule.

(7) Reimbursement for acute or subacute inpatient detoxification services shall be calculated in accordance with the applicable provisions of paragraph (A) of this rule, unless the hospital elects to be reimbursed for these services on a per diem basis, in which case the hospital shall be reimbursed the lesser of the charges billed by the hospital for the allowed services rendered, the all-inclusive per diem rates set forth in Table 1 of the appendix to this rule, or the rate the MCO contracted or negotiated with the hospital.

(8) Except for services subject to reimbursement on a per diem basis under paragraph (A) (7) of this rule, if the MCO has contracted or negotiated a different payment rate with a hospital pursuant to rule 4123-6-10 of the Administrative Code, reimbursement will be at the contracted or negotiated rate.

(9) For purposes of this rule, hospitals must report the applicable inpatient revenue codes for accommodation and ancillary services set forth in Table 2 of the appendix to this rule.

(10) For purposes of this rule, the "medicare severity diagnosis related group (MS-DRG) reimbursement rate," "medicare operating outlier amount," "medicare capital outlier amount," and "new technology add-on payment" shall be determined in accordance with the medicare program established under Title XVIII of the Social Security Act, 79 Stat. 286 (1965), 42 U.S.C. 1395 to 1395 -lll as amended as of the effective date of this rule, excluding 42 U.S.C. 1395ww(m), as implemented by the following materials, which are incorporated by reference:

(a) 42 C.F.R. Part 412 as published in the October 1, 2019 Code of Federal Regulations;

(b) Department of health and human services, centers for medicare and medicaid services' "42 CFR Parts 412, 413, and 495 medicare program; hospital inpatient prospective payment systems for acute care hospitals and the long-term care hospital prospective payment system and policy changes and fiscal year 2020 rates; quality reporting requirements for specific providers; medicare and medicaid promoting interoperability programs requirements for eligible hospitals and critical access hospitals final rule," 84 Fed. Reg. 42044 - 42701 ( 2019).

(c) The department of health and human services, centers for medicare and medicaid services' hospital-specific cost-to-charge ratio information as of the July 2019 update to the department of health and human services, centers for medicare and medicaid services' inpatient provider specific file (IPSF).

(B) QHP or self insuring employer (non-QHP):

A QHP or self-insuring employer may reimburse hospital inpatient services at:

(1) The applicable rate under the methodology set forth in paragraph (A) of this rule; or

(2)

(a) For hospitals the department of health and human services, centers for medicare and medicaid services maintains hospital-specific cost-to-charge ratio information on, the hospital's allowable billed charges multiplied by the hospital's reported operating cost-to-charge ratio information referenced in paragraph (A)(10)(c) of this rule multiplied by a payment adjustment factor of 1.14, not to exceed seventy per cent of the hospital's allowed billed charges;

(b) For hospitals the department of health and human services, centers for medicare and medicaid services does not maintain hospital-specific cost-to-charge ratio information on, the hospital's allowable billed charges multiplied by the applicable fiscal year 2020 urban or rural statewide average operating cost-to-charge ratio set forth in table 8A of the federal rule referenced in paragraph (A)(10)(b) of this rule (the Ohio average operating cost-to-charge ratio shall be used for hospitals outside the United States) multiplied by a payment adjustment factor of 1.14, not to exceed seventy per cent of the hospital's allowed billed charges; or

(3) The rate negotiated between the hospital and the QHP or self-insuring employer in accordance with rule 4123-6-46 of the Administrative Code.

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Effective: 2/1/2020
Five Year Review (FYR) Dates: 11/15/2019 and 01/01/2025
Promulgated Under: 119.03
Statutory Authority: 4121.31, 4123.05, 4121.12, 4121.121, 4121.30
Rule Amplifies: 4121.12, 4121.121, 4121.44, 4121.441, 4123.66
Prior Effective Dates: 01/01/2007, 04/01/2007, 01/01/2008, 02/01/2009, 02/01/2010, 02/01/2011, 02/01/2012, 02/03/2013, 02/01/2014, 02/01/2015, 02/01/2016, 02/01/2017, 02/01/2018, 02/01/2019