New Jersey Administrative Code
Title 10 - HUMAN SERVICES
Chapter 52 - HOSPITAL SERVICES MANUAL
Subchapter 5 - PROCEDURAL AND METHODOLOGICAL REGULATIONS
Section 10:52-5.8 - Patient care cost findings: direct costs per case, physician and nonphysician

1. Uniform Bill-Patient Summary (UB-PS) data shall be used for determination of hospital case-mix. The appropriate patient records for the reporting period corresponding with the Financial Elements Report shall be classified into Diagnosis Related Groups (DRGs) using the following items:

2. Outliers, which are defined as patients displaying atypical characteristics relative to other patients, for example, inordinately long or short lengths of stay, shall be determined by DRG using established trim points; any case beyond a trim point is considered an outlier. Hospitals must make every attempt to correct unacceptable data and hospitals for which more than 10 percent of the UB-PS data are missing or unacceptable must resubmit data or correct the unusable data before case-mix estimation will be attempted.

3. Outpatient case-mix shall consist of emergency service, clinic, home health agency, renal dialysis, home dialysis, ambulatory surgery, same day psychiatry, and private referred patients, as reported to the Division.

4. Same Day Surgical Services shall be considered a clinical, outpatient service but are assigned to a DRG and reported on a UB-PS (a bill type 13X).

1. For each patient with a Uniform Bill (UB), measures of resource use shall be calculated to distribute costs among the UB. Measures of resource use represent services provided to patients associated with each cost center. Patient days are associated with routine service cost, emergency room admissions with emergency service cost, and ancillary and therapeutic charges with ancillary and therapeutic service cost. The measures of resource use is a ratio of admissions reported on the hospital's cost report over the hospital's UB billing data. Costs are derived from the Actual Reporting Forms and are associated with admissions. Therefore, an adjustment is made to align the measures of resource use to the inpatient cost. The adjustment is the ratio of total admissions to total UB records. This results in a total adjusted measure of resource use. The hospitals shall make reasonable efforts to correct data unacceptable to the Division or Department of Health.

1. The Direct Patient Care Costs of each center (after the allocation of patient care general services in N.J.A.C. 10:52-5.11 and 5.12) are separated between inpatient, outpatient, and Skilled Nursing Facility (SNF) costs. Outpatient and SNF costs are excluded from the inpatient rates based on gross revenue reported to the Division. The total inpatient costs from each cost center are then divided by the hospital's corresponding total adjusted measure of resource use. This calculation produces ratios, including cost per patient day, cost per EMR admission, or a cost ratio per ancillary or therapeutic charge for each cost center. Each ratio is then multiplied by the corresponding cost center's measure of resource use of each DRG to calculate a cost per case for the hospital's case mix.