Illinois Administrative Code
Title 89 - SOCIAL SERVICES
Part 149 - DIAGNOSIS RELATED GROUPING (DRG) PROSPECTIVE PAYMENT SYSTEM (PPS)
Section 149.100 - Methodology for Determining DRG PPS Payment Rates

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:

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:

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

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

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

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

h) Updates to DRG PPS Reimbursement. The Department may annually review the components listed in subsection (c) and make adjustments as needed. 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 July 1, 2018, means the calculated fee schedule amount prior to any adjustment for secondary payer amounts for fiscal year 2015 MCO encounter data adjusted with a completion factor and fee-for-service claims data, excluding Medicare dual eligible claims.

"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:

Prior to January 1, 2014, the most recently released version of the All Patient Refined Diagnosis Related Grouping (APR-DRG) software, distributed by 3M Health Information Systems, available to the Department as of January 1 of the calendar year during which the discharge occurred.

Effective January 1, 2014, version 30 of the APR-DRG software.

Effective July 1, 2018, DRG grouper version 33 of the All Patient Refined Diagnosis Related Grouping (APR-DRG) software, distributed by 3M Health Information Systems.

"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 Medicaid 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 Medicaid 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.

"In-state standardized amount", effective July 1, 2018, 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, such that simulated DRG PPS allowed amounts, less PA 97-689 reductions, results in approximately a $238.5 million increase inclusive of policy adjustors effective July 1, 2018, as defined in subsections (f)(2) and (f)(3), compared to the sum of the inpatient based period claims data allowed amounts.

"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 the average amount as the basis for the DRG base rate established by the Department such that simulated DRG PPS payments, without P.A. 97-0689 reductions or GME factor adjustments, using general acute hospital inpatient based period paid claims data, are $355 million less than the sum of inpatient based period paid claims data reported payments and allocated inpatient static payments.

"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).