New Jersey Administrative Code
Title 10 - HUMAN SERVICES
Chapter 52 - HOSPITAL SERVICES MANUAL
Subchapter 14 - METHODOLOGY FOR ESTABLISHING DRG PAYMENT RATES FOR INPATIENT SERVICES AT GENERAL ACUTE CARE HOSPITALS BASED ON DRG WEIGHTS AND A STATEWIDE BASE RATE
Section 10:52-14.9 - Hospital specific Medicaid/NJ FamilyCare cost-to-charge ratios

(a) For the initial rate year and every year thereafter, the Division will calculate hospital-specific initial inpatient cost-to-charge ratios (CCR) using the most recent available submitted Medicare cost report data.

(b) The hospital-specific CCRs are calculated using total cost, total inpatient charges and total charges by cost center from the most recent available submitted Medicare cost report Worksheet C. Inpatient costs are estimated by developing the percent of inpatient charges to total charges for each cost center and multiplying that percentage times the total costs in that cost center; total inpatient costs are the sum of the inpatient costs for all cost centers. The inpatient CCR is calculated by dividing total inpatient costs by total inpatient charges.

(c) The hospital-specific CCRs are used to estimate the cost of claims for determining whether the hospital's inpatient claims exceed the cost outlier threshold in accordance with 10:52-14.11 and also to calculate the cost outlier payments.

(d) The Division will monitor charges and payments from current claims on an ongoing basis and adjust the CCRs and payments as needed during the rate year to ensure appropriate payments. Adjustment of payments would include repricing Medicaid/NJ FamilyCare claims for the rate year.

(e) Hospitals shall notify the Division of any changes made to the hospital's charge structure. Notice shall be given 30 days prior to implementation of the change, in writing, addressed to:

Office of Reimbursement

Division of Medical Assistance and Health Services

Mail Code #44

P.O. Box 712

Trenton, NJ 08625-0712

(f) In cases in which a hospital failed to notify the Division of changes to the hospital's charge structure 30 days prior to implementation, the hospital shall pay for all costs associated with reprocessing its claims, as well as the recovery of the related overpayments and interest related to those overpayments. Reprocessing shall apply to both Medicaid/NJ FamilyCare and charity care claims. Repeated occurrences of the failure to timely notify the Division of hospital CCR changes will be forwarded to the State's Medicaid Inspector General for review and possible referral to the Office of the Attorney General's Division of Criminal Justice for legal action.