Code of Massachusetts Regulations
130 CMR - DIVISION OF MEDICAL ASSISTANCE
Title 130 CMR 450.000 - Administrative and Billing Regulations
Section 450.233 - Rates of Payment to Out-of-state Providers

Universal Citation: 130 MA Code of Regs 130.450

Current through Register 1543, March 14, 2025

(A) Except as provided in 130 CMR 450.233(D) and 435.405(B), payment to an out-of-state institutional provider for any medical service payable by the MassHealth agency is the lowest of

(1) the rate of payment established for the medical service under the other state's Medicaid program;

(2) the MassHealth rate of payment established for such medical service or comparable medical service in Massachusetts; or

(3) the MassHealth rate of payment established for a comparable provider in Massachusetts.

(B) An out-of-state institutional provider, other than an acute hospital, must submit to the MassHealth agency a current copy of the applicable rate schedule under its state's Medicaid program.

(C) Payment to an out-of-state noninstitutional provider for any medical service payable by the MassHealth agency is made in accordance with the applicable fee schedule established by EOHHS, subject to any applicable federal payment limit (see 42 CFR 447.304) .

(D) Payment to an out-of-state acute hospital provider for any medical service payable by the MassHealth agency is made as set forth in 130 CMR 450.233(D)(1) through (3). For purposes of 130 CMR 450.233(D), a "High MassHealth Volume Hospital" means any out-of-state acute hospital provider that had at least 100 MassHealth discharges during the most recent federal fiscal year for which complete data is available as determined by the MassHealth agency at least 90 days prior to the start of each federal fiscal year.

(1) Inpatient Services. Except as provided in 130 CMR 450.233(D)(3), out-of-state acute hospitals are paid for inpatient services as specified in 130 CMR 450.233(D)(1)(a) through (d).
(a) Payment Amount per Discharge.
1. Out-of-state APAD. Out-of-state acute hospitals are paid an adjudicated payment amount per discharge ("out-of-state APAD") for inpatient services; provided that the out-of-state APAD is not paid for inpatient services that are paid on a per diem basis under 130 CMR 450.233(D)(1)(b) or (c) and that payment for certain APAD carve-out services is as set forth in 130 CMR 450.233(D)(1)(d) and not in 130 CMR 450.233(D)(1)(a). The out-of-state APAD is calculated using the sum of the statewide operating standard per discharge and the statewide capital standard per discharge both as in effect for in-state acute hospitals on the date of admission, which is then multiplied by the MassHealth DRG Weight assigned to the discharge based on the information contained in a properly submitted inpatient acute hospital claim.
a. "MassHealth DRG Weight" for purposes of 130 CMR 450.233(D) is the MassHealth relative weight determined by the MassHealth agency for each unique combination of APR-DRG and Severity of Illness (SOI).

b. "APR-DRG" or "DRG" for purposes of 130 CMR 450.233(D) refers to the All Patient Refined Diagnosis Related Group and Severity of Illness (SOI) assigned to a claim by the 3M APR-DRG Grouper.

2. Out-of-state Outlier Payment. If the calculated cost of the discharge exceeds the discharge-specific outlier threshold, then the out-of-state acute hospital is also paid an outlier payment for that discharge ("out-of-state outlier payment"). The out-of-state outlier payment is equal to the marginal cost factor in effect for in-state acute hospitals on the date of admission multiplied by the difference between the calculated cost of the discharge and the discharge-specific outlier threshold.
a. The "calculated cost of the discharge" for purposes of 130 CMR 450.233(D) will be determined by the MassHealth agency by multiplying the out-of-state acute hospital's allowed charges for the discharge by the following cost-to-charge ratio:
i. For a High MassHealth Volume Hospital, the hospital's inpatient cost-to-charge ratio, for the most recent complete rate year used for in-state acute hospitals, as determined by the MassHealth agency.

ii. For all other out-of-state acute hospitals, the median in-state acute inpatient hospital cost-to-charge ratio in effect on the date of admission based on MassHealth discharge volume, as determined by the MassHealth agency.

b. The "discharge-specific outlier threshold" for purposes of 130 CMR 450.233(D) is equal to the sum of the out-of-state APAD corresponding to the discharge, and the fixed outlier threshold in effect for in-state acute hospitals on the date of admission.

(b) Out-of-state Transfer Per Diem.
1. Out-of-state acute inpatient hospitals are paid the out-of-state transfer per diem for inpatient services as calculated and capped as set forth in 130 CMR 450.233(D)(1)(b)2. (the "out-of-state transfer per diem") in the following circumstances:
a. If an out-of-state acute inpatient hospital transfers a MassHealth patient to another acute inpatient hospital, the MassHealth agency pays the transferring hospital the out-of-state transfer per diem for the period during which the member was an inpatient at the transferring hospital.

b. If a MassHealth member's enrollment in a MassHealth contracted managed care organization or accountable care partnership plan changes during an out-of-state acute inpatient hospital stay, such that the MassHealth agency is responsible for payment of only a portion of the hospital stay, the hospital is paid the out-of-state transfer per diem for that portion of the stay.

c. The MassHealth agency will pay the out-of-state transfer per diem in such other circumstances as in-state acute hospitals would be paid the in-state transfer per diem, as determined by the MassHealth agency.

2. The out-of-state transfer per diem is equal to the sum of the hospital's out-of-state APAD plus, if applicable, any out-of-state outlier payment, that would have otherwise applied for the period during which the transfer per diem is payable as calculated by the MassHealth agency, divided by the mean in-state acute hospital all-payer length of stay for the particular DRG assigned, as determined by the MassHealth agency. Total out-of-state transfer per diem payments for a given hospital stay are capped at the sum of the hospital's out-of-state APAD plus, if applicable, any out-of-state outlier payment that would have otherwise applied for the transfer per diem period. No other payments specified in 130 CMR 450.233(D)(1) apply.

(c) Out-of-state Psychiatric Per Diem. If an out-of-state acute hospital admits a MassHealth patient primarily for behavioral health services, including psychiatric and substance use disorder services, the out-of-state acute hospital will be paid an all-inclusive psychiatric per diem equal to the psychiatric per diem most recently in effect for in-state acute hospitals on the date of service ("out-of-state psychiatric per diem"). No other payments specified in 130 CMR 450.233(D)(1) apply.

(d) Payment for APAD Carve-outs. The following APAD carve-out services are paid separately from the out-of-state APAD and out-of-state outlier payment, as specified below.
1. Long-acting Reversible Contraception (LARC) Device (LARC Device).
a. A LARC device refers specifically to intrauterine devices and contraceptive implants; it does not refer to the LARC procedure, itself.

b. An out-of-state acute inpatient hospital may be paid for a LARC device separate from the out-of-state APAD, if the following conditions are met:
i. the member requests the LARC device while admitted as an inpatient for a labor and delivery stay and, at the time of the procedure, is a clinically appropriate candidate for immediate post-labor and delivery LARC device insertion;

ii. the practitioner performing the procedure has been properly trained for immediate postpartum LARC device insertion, and performs the procedure immediately after labor and delivery during the same inpatient hospital stay; and

iii. the hospital satisfies all other conditions for such payment as set forth in regulations and other formal written issuances of the MassHealth agency.

c. If the out-of-state acute inpatient hospital qualifies for separate payment of a LARC device, the hospital will be reimbursed for the LARC device according to the fee schedule rates for such devices set forth in 101 CMR 317.00: Medicine.

d. A hospital's charges for a LARC device are excluded in calculating any out-of-state outlier payment under 130 CMR 450.233(D)(1)(a)2.

2. APAD Carve-out Drugs.
a. The list of MassHealth-designated APAD carve-out drugs is set forth on the "MassHealth Acute Hospital Carve-out Drugs List" page of the MassHealth Drug List (MHDL) which is available on the MassHealth website ( https://masshealthdruglist.ehs.state.ma.us/MHDL/ ). This list may be updated from time to time.

b. All APAD carve-out drugs require prior authorization, and the acute inpatient hospital stay continues to also be subject to applicable admission screening requirements of the MassHealth agency. (See also, e.g., 130 CMR 450.208 and 450.303 ).

c. An out-of-state acute inpatient hospital may be paid separate from the out-of-state APAD for an APAD carve-out drug administered to a member during an inpatient admission, if the hospital satisfies all applicable MassHealth conditions of payment set forth in regulations and other formal written issuances of the MassHealth agency.

d. If the out-of-state acute inpatient hospital qualifies for separate payment of the APAD carve-out drug, the hospital will be reimbursed for the APAD carve-out drug in accordance with the MassHealth payment method applicable to such drug as in effect for in-state acute inpatient hospitals on the date of service.

e. A hospital's charges for an APAD carve-out drug are excluded in calculating any out-of-state outlier payment under 130 CMR 450.233(D)(1)(a)2.

(2) Outpatient Services.
(a) Payment for Outpatient Services. Except as provided in 130 CMR 450.233(D)(2)(c) and 450.233(D)(3), out-of-state acute hospitals are paid for outpatient services utilizing an adjudicated payment per episode of care payment methodology ("out-of-state APEC") as described in 130 CMR 450.233(D)(2)(b), or in accordance with the applicable fee schedule established by EOHHS for outpatient services for which in-state acute hospitals are not paid the APEC. For purposes of 130 CMR 450.233(D), "APEC-covered services" are outpatient services for which in-state acute hospitals are paid an APEC, and "episode" means all APEC-covered services delivered to a MassHealth member on a single calendar day, or if the services extend past midnight in the case of emergency department or observation services, on consecutive days.

(b) Out-of-state APEC. The Out-of-state APEC for each payable episode will equal the sum of the episode-specific total EAPG payment, and the APEC outlier component (see 130 CMR 450.233(D)(2)(b)1. and 2.). For proper payment, out-of-state acute hospitals must include on a single claim all of the APEC-covered services that correspond to the episode, and must otherwise submit properly completed outpatient hospital claims.
1. The "episode-specific total EAPG payment" is equal to the sum of all of the episode's claim detail line EAPG payment amounts, where each claim detail line EAPG payment amount is equal to the product of the APEC outpatient statewide standard in effect for in-state acute hospitals on the date of service, and the claim detail line's adjusted EAPG weight. The 3M EAPG Grouper's discounting, consolidation and packaging logic is applied to each of the episode's claim detail line MassHealth EAPG weights to produce the claim detail line's adjusted EAPG weight used for this calculation. For purposes of 130 CMR 450.233(D)
a. EAPG stands for Enhanced Ambulatory Patient Group. EAPG(s) are assigned to claim detail lines containing APEC-covered services based on information, contained on a properly submitted outpatient claim by the 3M EAPG Grouper, and refer to a group of outpatient services that have been bundled for purposes of categorizing and measuring casemix.

b. 3M EAPG Grouper refers to the 3M Corporation's EAPG grouper that has been configured for the MassHealth APEC payment methodology.

c. MassHealth EAPG weight refers to the MassHealth relative weight developed by the MassHealth agency for each unique EAPG.

2. The "APEC outlier component" is equal to the marginal cost factor in effect for in-state acute hospitals on the date of service multiplied by the difference between the episode-specific case cost and the episode-specific outlier threshold.

If the episode-specific case cost is less than the episode-specific outlier threshold, then the APEC outlier component will be $0.

a. The "episode-specific case cost" for purposes of 130 CMR 450.233(D) shall be determined by the MassHealth agency by multiplying the sum of the allowed charges for all of the claim detail lines with APEC-covered services in the episode that adjudicate to pay, by the following cost-to-charge ratio:
i. For a High MassHealth Volume Hospital, the hospital's outpatient cost-to-charge ratio, for the most recent complete rate year used for in-state acute hospitals, as determined by the MassHealth agency.

ii. For all other out-of-state acute hospitals, the median in-state acute outpatient hospital cost-to-charge ratio in effect on the date of service based on MassHealth episode volume, as determined by the MassHealth agency.

b. The "episode-specific outlier threshold" for purposes of 130 CMR 450.233(D) is equal to the sum of the episode-specific total EAPG payment corresponding to the episode, and the fixed outpatient outlier threshold in effect for in-state acute hospitals on the date of service.

c. In no case is an APEC outlier component payable if the episode-specific total EAPG payment is $0.

(c) Payment for APEC Carve-out Drugs.
1. The list of MassHealth-designated APEC carve-out drugs is set forth on the "MassHealth Acute Hospital Carve-out Drugs List" page of the MassHealth Drug List (MHDL) which is available on the MassHealth website ( https://masshealthdruglist.ehs.state.ma.us/MHDL/ ). This list may be updated from time to time.

2. All APEC carve-out drugs require prior authorization. See also 130 CMR 450.303.

3. An out-of-state acute outpatient hospital may be paid separate from the out-of-state APEC for an APEC carve-out drug administered to a member during an acute outpatient hospital visit, if the hospital satisfies all applicable MassHealth conditions of payment set forth in regulations and other formal written issuances of the MassHealth agency.

4. If the out-of-state acute outpatient hospital qualifies for separate payment of the APEC carve-out drug, the hospital will be reimbursed for the APEC carve-out drug in accordance with the MassHealth payment method applicable to such drug as in effect for in-state acute outpatient hospitals on the date of service.

(3) Services Not Available in State.
(a) For medical services payable by the MassHealth agency that are not available in-state as determined by the MassHealth agency, an out-of-state acute hospital that is not a High MassHealth Volume Hospital will be paid the rate of payment established for the medical service under the other state's Medicaid program (or equivalent) as determined by the MassHealth agency, or such other rate as the MassHealth agency determines necessary to ensure member access to services.

(b) For an inpatient service that is not available in-state, as determined by the MassHealth agency, payment to the out-of-state acute hospital under 130 CMR 450.233(D)(3)(a) will also include acute hospital outpatient services that the MassHealth agency determines are directly related to the service that is not available in-state.

(c) In order to receive payment under 130 CMR 450.233(D)(3), an out-of-state acute hospital provider must
1. submit to the MassHealth agency a complete list of services that are to be performed, along with their corresponding charges;

2. coordinate the case with clinical staff designated by the MassHealth agency; and

3. comply with all other applicable MassHealth admission screening and prior authorization requirements, and any other conditions of payment of the MassHealth agency.

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