Code of Massachusetts Regulations
114 CMR - DIVISION OF HEALTH CARE FINANCE AND POLICY
Title 114.1 CMR 41.00 - RATES OF PAYMENT FOR SERVICES PROVIDED TO INDUSTRIAL ACCIDENT PATIENTS BY HOSPITALS
Section 41.03 - Hospital Inpatient Rates
Universal Citation: 114.1 CMR 41.00 MA Code of Regs 41.03
Current through Register 1531, September 27, 2024
(1) Acute Hospitals.
(a)
Determination of Industrial Accident Inpatient Rates of Payment for
Massachusetts Acute Hospitals. Payment for any eligible inpatient
service, and outpatient or observation stay as defined in 114. 1 CMR 4.04(2)
provided to an industrial accident patient by an acute hospital shall be equal
to the product of the industrial accident PAF and the published charge for the
service. The Division will determine the hospital-specific industrial accident
Rate Year Payment on Account Factor (PAF) calculated as follows:
1. The rate year PAF equals the lower of 1.0
or the hospital's base year Private Sector Gross Patient Service Revenue
(PSGPSR) minus its base year private sector contractual adjustments divided by
its base year Private Sector Gross Patient Service Revenue (PSGPSR). Private
sector revenues and contractual adjustments used in this calculation will be
those reported on the DHCFP-403 Schedule V-A cost report from Industrial
Accident, Managed Care and Non-Managed Care payer groups.
Rate Year PAF = the lower of 1.0 or Base Year PSGPSR - Base Year Private Sector Contractual Adjustments
Base Year PSGPSR
2. The percentage equal to the lower of 1.00
or the total hospital's total base year Gross Patient Service Revenue (GPSR)
minus its base year total hospital contractual adjustments divided by its base
year total hospital GPSR
3. For any
hospital resulting from a merger, consolidation, or other such arrangement, a
single updated PAF will be calculated when merged data and charges become
available. Merged or consolidated hospitals shall utilize the PAF approved for
the specific site of service until a single updated PAF is calculated and
approved by the Division. In the event that there is no individual PAF approved
for the site of service, the median PAF multiplied by charges shall be payment
for all eligible inpatient and emergency department services
rendered.
4. For a new hospital or
hospital for which an approved PAF is not yet determined, the acute hospital
median PAF multiplied by charges shall be payment for any eligible inpatient
service, and outpatient or overnight observation stay rendered as defined in
114. 1 CMR 40.04(2).
(b)
Annual Update of Industrial Accident Inpatient Rates of
Payment. Industrial Accident rates of payment may increase by no
more than the rate of inflation, as measured by the Centers for Medicare and
Medicaid Services's (CMS) Hospital Market Basket Prospective Payment System
(PPS) Index.
1. The Division will conduct the
following analysis to determine whether it must update a hospital's PAF. The
Division will determine the actual increase in private sector charges by
dividing the average charge percase-mixad justed discharge (CMAD) for the most
recent year for which case-mix data are available by the average charge per
case-mix adjusted discharge in the base year. For simplicity, the Division will
refer to the most recent year for which case-mix data are available as the
"update year". If the result of this division is greater than one plus the CMS
Hospital Market Basket Index for the period from the base year to the update
year then the Division will update the hospital's PAF. If the result of this
division is less than or equal to one plus the CMS Hospital Market Basket Index
for the period from the base year to the update year, no further action will be
taken and the hospital shall maintain its current PAF during the new rate
year.
2. The Division will conduct
the following analysis If the percentage increase as determined by 114. 1 CMR
41.03(1)(b)1. is greater than one plus the CMS Hospital Market Basket Index,
the updated PAF will be determined as follows. The Division will multiply the
base year PAF by one plus the CMS Hospital Market Basket Index and divide by
the actual percentage increase as determined pursuant to 114. 1 CMR
41.03(1)(b)1.
This calculation is expressed algebraically by the following formula:
((Base Year PAF * (1+CMS Hospital Market Basket Index)) / Update Year Average Charge per CMAD)) / Base Year Charge per CMAD)
3. The PAF ratio established in
114. 1 CMR 41.03(1) shall not exceed 1.00.
(c)
Determination of Industrial
Accident Inpatient Rates of Payment for Out of State Acute
Hospitals.
1. On an annual basis,
the Division shall establish a PAF for out of state acute hospitals that pro
vide inpatient services or outpatient care in accordance with 114. 1 CMR
41.01(3) to industrial accident patients as follows. The Division shall group
the PAFs for all acute care hospitals in the Commonwealth as determined in 114.
1 CMR 41.03(1), and calculate the median PAF. The median acute hospital PAF
shall be established as the PAF for reimbursement of out of state acute
hospitals.
2. The industrial
accident inpatient rate of payment for out of state acute hospitals will be
determined by multiplying the gross charges for services rendered by the PAF
for out of state acute hospitals calculated pursuant to 114. 1 CMR
41.03(1)(c)1.
(d)
Timing of Rate Determination.
1. The Division will update the inpatient PAF
annually on a prospective basis.
2.
Industrial accident rates of payment established pursuant to 114. 1 CMR 41.03
shall remain in effect until an update review is conducted and an adjusted PAF
is calculated in accordance with 114. 1 CMR 41.03(1)(b).
(e)
Data Sources for the
Calculation of the PAF and Yearly Update.
1. The Division shall use the data sources
cited in 114. 1 CMR 41.03(1)(b) in its calculation of the industrial accident
rates of payment unless the specified data source is unavailable or inaccurate.
In either of these two cases, the Division shall use the most comparable
available data source. In the event that the Division uses a comparable data
source, the Division will consider a hospital's request to submit additional
data.
2. The Division shall use the
base year DHCFP-403 cost report to calculate the rate year PAF.
3. For purposes of calculating the updated
PAF, the Division shall use the most recent four quarters of the merged billing
and discharge tapes (case-mix data) submitted pursuant to 114. 1 CMR 17.00. The
Division shall utilize the New York All Patient-Diagnosis Related Groups,
Version 15, and the New York weights, for the appropriate year when calculating
the updated PAF.
(2) Non-acute Hospitals.
(a)
Determination of Industrial Accident Inpatient Rates of Payment for
Massachusetts Non-acute Hospitals. Payment for any eligible
inpatient service, and outpatient or overnight observation stay as defined in
114. 1 CMR 40.04(2) provided to an industrial accident patient by a non-acute
hospital shall be equal to the product of the industrial accident PAF and the
published charge for the service. The Division will determine the
hospital-specific industrial accident Rate Year Payment on Account Factor (PAF)
calculated as follows:
1. The rate year PAF
equals the lower of 1.0 or the hospital's base year Private Sector Gross
Patient Service Revenue (PSGPSR) minus its base year private sector contractual
adjustments divided by its base year Private Sector Gross Patient Service
Revenue (PSGPSR). Private sector revenues and contractual adjustments used in
this calculation will be those reported on the DHCFP-403 Schedule V cost report
from Blue Cross, Industrial Accident, Commercial and HMO payer groups. If the
specified data source is unavailable or inaccurate, the Division shall use the
most comparable data source. In the event that the Division uses a comparable
data source, the Division will consider a hospital's request to submit
additional data.
Rate Year PAF = the lower of 1.0 or
Base Year PSGPSR - Base Year Private Sector Contractual Adjustments
Base Year PSGPSR
2. The percentage equal to the lower of 1.00
or the total hospital's total base year Gross Patient Service Revenue (GPSR)
minus its base year total hospital contractual adjustments divided by its total
hospital GPSR
3. For any hospital
resulting from a merger, consolidation, or other such arrangement, a single
updated PAF will be calculated when merged data and charges become available.
Merged or consolidated hospitals shall utilize the PAF approved for the
specific site of service until a single updated PAF is calculated and approved
by the Division. In the event that there is no individual PAF approved for the
site of service, the median PAF multiplied by charges shall be payment for all
eligible inpatient and emergency department services rendered.
4. For a new hospital or hospital for which
an approved PAF is not yet determined, the non-acute hospital median PAF
multiplied by charges shall be payment for any eligible inpatient service, and
outpatient or overnight observation stay rendered as defined in 114. 1 CMR
40.04(2).
(b)
Determination of Industrial Accident Inpatient Rates of payment for
Out of State Non-acute Hospitals.
1. On an annual basis, the Division shall
establish a PAF for out of state non-acute hospitals that provide care and
services to industrial accident patients as follows. The Division shall group
the approved PAFs for those non-acute care hospitals in the Commonwealth as
determined in 114. 1 CMR 41.03(2)(a), and calculate the median PAF. The median
non-acute hospital PAF shall be established as the PAF for reimbursement of out
of state non-acute hospitals.
2.
The industrial accident inpatient rate of payment for out of state non-acute
hospitals will be determined by multiplying the gross charges for services
rendered by the PAF for out of state non-acute hospitals calculated pursuant to
114. 1 CMR 41.03(2)(b)1.
(c)
Timing of Rate
Determination.
1. The Division
will update the non-acute inpatient PAF on a prospective basis annually in
accordance with 114. 1 CMR 41.03(2)(a).
2. Industrial accident rates of payment
established pursuant to 114. 1 CMR 41.03 shall remain in effect until an update
review is conducted and an adjusted PAF is calculated in accordance with 114. 1
CMR 41.03(2)(a).
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