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Meeting Agenda

Arizona Health Care Cost Containment System DRG-Based Inpatient Hospital Payment System Project Overview June 14, 2012. Meeting Agenda. Introductions Project Overview Key Payment Methodology Components Stakeholder Input. Project Overview. Project Overview.

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Meeting Agenda

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  1. Arizona Health Care Cost Containment SystemDRG-Based Inpatient Hospital Payment SystemProject OverviewJune 14, 2012

  2. Meeting Agenda • Introductions • Project Overview • Key Payment Methodology Components • Stakeholder Input

  3. Project Overview

  4. Project Overview Stakeholder Input is Key to Successful Design Process Overview of Design Framework Page 4

  5. Project Steps

  6. Project Steps

  7. Project Steps

  8. Key Project Dates (Preliminary) • Preliminary payment rate calculations and payment simulation modeling: June 2012 - December 2012 • Presentation of Summary Report to Arizona Legislature: • January 2013 - March 2013 • Target DRG system implementation date: • To be determined

  9. Evaluation Criteria • Evaluation Criteria will Include: • Establishing appropriate incentives for cost effectiveness • Maintaining or enhancing access to high-quality care • Establishing or maintaining equity of payment among providers for similar services • Recognizing measurable differences in resource requirements • Enhancing predictability and stability of resulting payments, for the providers and for the State • Maintaining transparency in the rate-development and payment processes • Creating simplicity in program administration

  10. Key Payment Methodology Components

  11. DRG Model Selection APR-DRGs MS-DRGs CMS DRGs AP or Tricare DRGs Other Per Stay/Per Diem/Cost Reimbursement/Other * Indicates Moving Toward ** Indicates Under Consideration * ** * * * * * **

  12. DRG Model Selection Source: Quinn, K, Courts, C. Sound Practices in Medicaid Payment for Hospital Care. CHCS: November 2010.

  13. DRG Model Selection Source: Quinn, K, Courts, C. Sound Practices in Medicaid Payment for Hospital Care. CHCS: November 2010.

  14. DRG Model Selection “The MS-DRGs were specifically designed for purposes of Medicare hospital inpatient services payment… We simply do not have enough data to establish stable and reliable DRGs and relative weights to address the needs of non-Medicare payers for pediatric, newborn, and maternity patients. For this reason, we encourage those who want to use MS-DRGs for patient populations other than Medicare [to] make the relevant refinements to our system so it better serves the needs of those patients.” • Consideration of MS-DRGs for Medicaid Payment: • Designed for Classification of Medicare Patients… Source: CMS, “Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2008 Rates; Final Rule,” Federal Register 72:162 (Aug. 22, 2007): 47158

  15. DRG Model Selection Benefits of Migrating to APR-DRGs Enhanced Homogeneity of Classifications – Superior Measurement of Resources Enhances Recognition of Resources Necessary for High Severity Patients Enhances Recognition of Acuity Related to Specialty Hospitals, Including Children’s and Teaching Hospitals Incorporates Age into Classification Process – Critical for Neonatal Cases Will Facilitate Measurement of Potentially Preventable Readmissions and Complications Reduced Occurrence of Outlier Cases

  16. Other Methodology Components

  17. Inpatient Options – Other Design Considerations Illinois-Specific Relative Weights

  18. Other Methodology Components

  19. Other Methodology Components

  20. Stakeholder Input

  21. Formation of Advisory Groups System Implementation

  22. Questions and Discussion

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