Indiana Administrative Code
Title 405 - OFFICE OF THE SECRETARY OF FAMILY AND SOCIAL SERVICES
Article 1 - MEDICAID PROVIDERS AND SERVICES
Rule 10.5 - Reimbursement for Inpatient Hospital Services
Section 10.5-2 - Definitions

(a) The definitions in this section apply throughout this rule.

(b) "All patient refined diagnosis-related group (DRG) grouper" refers to a classification system used to assign inpatient stays to DRGs.

(c) "Base amount" means the rate per Medicaid stay that is multiplied by the relative weight to determine the DRG rate.

(d) "Base period" means the fiscal years used for calculation of the prospective payment rates including base amounts and relative weights.

(e) "Capital costs" are costs associated with the capital costs of the facility. The term includes, but is not limited to, the following:

(f) "Children's hospital" means a freestanding general acute care hospital licensed under IC 16-21 that:

(g) "Cost outlier case" means a Medicaid stay that exceeds a predetermined threshold, defined as the greater of twice the DRG rate or a fixed dollar amount established by the office. This amount may be changed at the time the relative weights are adjusted.

(h) "Diagnosis-related group" or "DRG" means a classification of an inpatient stay according to the principal diagnosis, procedures performed, and other factors that reflect clinically cohesive groupings of inpatient hospital stays utilizing similar hospital resources. Classification is made through the use of the all patient refined (APR) DRG grouper.

(i) "Discharge" means the release of a patient from an acute care facility. Patients may be discharged to their home, another health care facility, or due to death. Transfers from one (1) unit in a hospital to another unit in the same hospital shall not be considered a discharge unless one (1) of the units is paid according to the level-of-care approach.

(j) "DRG daily rate" means the per diem payment amount for a stay classified into a DRG calculated by dividing the DRG rate by the average length of stay for all stays classified into the DRG.

(k) "DRG rate" means the product of the relative weight multiplied by the base amount. It is the amount paid to reimburse hospitals for routine and ancillary costs of providing care for an inpatient stay.

(l) "Freestanding" does not mean a wing or specialized unit within a general acute care hospital.

(m) "Inpatient" means a patient who was admitted to a medical facility on the recommendation of a physician and who received room, board, and professional services in the facility.

(n) "Inpatient hospital facility" means:

(o) "Intestinal transplant" means the grafting of either the small or large intestines from a donor into a recipient.

(p) "Less than one-day stay" means a medical stay of less than twenty-four (24) hours.

(q) "Level-of-care case" means a medical stay, as defined by the office, that includes psychiatric cases, rehabilitation cases, long term care hospital admissions, and certain burn cases.

(r) "Level-of-care rate" means a per diem rate that is paid for treatment of a diagnosis or performing a procedure subject to subsection (r) [subsection (q)].

(s) "Long term care hospital" means a freestanding general acute care hospital licensed under IC 16-21 that:

(t) "Marginal cost factor" means a percentage applied to the difference between the cost per stay and the outlier threshold for purposes of the cost outlier computation.

(u) "Medicaid day" means any part of a day, including the date of admission, for which a patient enrolled with the Indiana Medicaid program is admitted as an inpatient and remains overnight. The day of discharge is not considered a Medicaid day. The term does not include any portion of an outpatient service under 405 IAC 1-8-3 that precedes an admission as an inpatient subject to subsection (n).

(v) "Medicaid stay" means an episode of care provided in an inpatient setting that includes at least one (1) night in the hospital and is covered by Medicaid.

(w) "Medical education costs" means the direct costs associated with the salaries and benefits of medical interns and residents and paramedical education programs.

(x) "Multivisceral transplant" means the grafting of either the small or large intestines and one (1) or more of the following organs from a donor into a member:

(y) "Outlier payment amount" means the amount reimbursed in addition to the DRG rate for certain inpatient stays that exceed cost thresholds established by the office.

(z) "Per diem" means an all-inclusive rate per day that includes routine and ancillary costs and capital costs.

(aa) "Principal diagnosis" means the diagnosis, as described by the International Classifications of Diseases, 10th revision, for the condition established after study to be chiefly responsible for occasioning the admission of the patient for care.

(bb) "Readmission" means that a patient is admitted into the hospital following a previous hospital admission and discharge for a related condition as defined by the office.

(cc) "Rebasing" means the process of adjusting the base amount using more recent claims data, cost report data, and other information relevant to hospital reimbursement.

(dd) "Relative weight" means a numeric value that reflects the relative resource consumption for the DRG to which it is assigned. Each relative weight is multiplied by the base amount to determine the DRG rate.

(ee) "Routine and ancillary costs" means costs that are incurred in providing services exclusive of medical education and capital costs.

(ff) "Transfer" means a situation in which a patient is admitted to one (1) hospital and is then released to another hospital during the same episode of care. Movement of a patient from one (1) unit to another unit within the same hospital will not constitute a transfer unless one (1) of the units is paid under the level-of-care reimbursement system.

(gg) "Transferee hospital" means that hospital that accepts a transfer from another hospital.

(hh) "Transferring hospital" means the hospital that initially admits and then discharges the patient to another hospital.