July 28, 1989

SUBJECT: INSURANCE

Circular Letter No. 8 (1989)

WITHDRAWN

TO: AUTOMOBILE SELF-INSURERS AND INSURERS LICENSED TO WRITE AUTOMOBILE INSURANCE IN NEW YORK

RE: REIMBURSEMENT FOR HOSPITAL INPATIENT SERVICES UNDER NO-FAULT FOR TREATMENT RENDERED ON AND AFTER JANUARY 1, 1988

This Circular Letter supplements Circular Letters No. 11 and 18 (1988) and provides updated information to enable no-fault "insurers to process and pay 1988,and 1989 hospital inpatient claims under the DRG (Diagnosis-Related Group) system. The Insurance Department has received 235 pages of revised data prepared by the Department of Health's Office of Health Systems Management. Upon receipt of a written request from the senior claims officer of your company, the Insurance Department will furnish one copy of this data to your company. Since this data has been provided to workers' compensation insurers, please request it only if you have not previously received it from another source. You should make this information available to all your claims personnel who are responsible for the review of hospital inpatient billings payable under the no-fault law.

Hospitals will submit adjusted billings for 1988 hospitalizations based upon the revised data. information for the calculation of 1989 hospitalizations is also included with the data. This data, together with the sample calculations attached, will enable your claims personnel to make appropriate and timely DRG payments. It should be noted that the information is provided in a format which differs from that provided previously. Accordingly, the eight sample calculations included in the attachments supersede those provided with the previous circular letters, and should be used in calculating the 1988 adjustments, 1989 hospital bills and any future DRG billings. Amounts shown in the calculations are for illustrative purposes only and do not represent any particular hospital.

In addition, the revised hospital inpatient fee schedule for the 1987 carryover rates is attached. These rates are applicable to patients admitted in 1987 and discharged in 1988.

Requests for the revised data and any questions or problems in connection with DRG implementation involving no-fault insurers should be brought to the attention of Hyman Silberstein (212.602-0334), Senior Examiner, in the Department's Property and Casualty Insurance Bureau, at the above address.

Very Truly yours,

[SIGNATURE]

Wendy E. Cooper

Acting Superintendent of Insurance

INDEX OF EXAMPLES

(1) NO-FAULT CALCULATION OF INPATIENT HOSPITALIZATION BILLS FOR INLIERS (HOSPITALIZATIONS WITHIN TRIMPOINTS) WITH ALTERNATE LEVEL OF CARE

(2) NO-FAULT ALTERNATE LEVEL OF CARE

(3) NO-FAULT PAYMENT CALCULATION FOR. LONG STAY OUTLIER DRG WITH ALTERNATE LEVEL OF CARE

(4) NO-FAULT PAYMENT CALCULATION OF SHORT STAY OUTLIER DRG

(5) NO-FAULT TRANSFER PAYMENT WITH ALTERNATE LEVEL OF CARE COMPARED TO INLIER, SHORT STAY OUTLIER OR LONG STAY OUTLIER PAYMENT -

(6) NO-FAULT HIGH COST OUTLIER WITH ALTERNATE LEVEL OF CARE

(7) NO-FAULT DETERMINATION OF EXEMPT UNIT (HOSPITAL)"ACUTE CARE PAYMENT

(8) NO-FAULT DETERMINATION OF ALTERNATE LEVEL OF CARE PAYMENT-EXEMPT HOSPITAL OR UNIT

(1). Inlier

This calculation is used for an inpatient hospitalization where the stay is within the trimpoints for that specific DRG, and no alternate level of care (ALC) is required.

(2). Short Stay Outlier

This calculation is used for an inpatient hospitalization where the stay is less than the short trimpoint for that specific DRG.

(3). Short Stay Outlier Stay Outlier

This calculation is used for an inpatient hospitalization where the stay is longer than the long trimpoint for that specific DRG. This calculation will provide the additional amount to be paid over a regular DRG (Inlier).

(4). Alternate Level Of Care (ALC)

This calculation is for an additional amount to be paid over the calculated amount for the DRG when the patient is awaiting release from the hospital either to a non-acute facility or when arrangements are being made for home health care.

(5), (6) and (7) Inliers, Short Stay Outlier and Long Stay Outliers Compared to Transfer Payments

These calculations "are made by a hospital which is transferring a patient to another acute facility. The. transfer amount cannot exceed the amount. of inlier, short stay outlier or long stay inlier DRG.

(8). High Cost Outliers

This calculation is used when a hospital's actual charges are far in excess of a calculated Inliers DRG payment only. It does not apply on short stay outliers, long stay outliers, or transfers. There are test checks within this calculation which are in accordance with New York State Health Department Laws [subpart 86.1.55(c)(2)] and should be followed carefully when determining any additional payment to be made.

(9). Calculation for Exempt Unit Acute Care

This calculation is for an exempt unit (hospital) - Medical Rehabilitation, Psychiatric, AIDS center, Alcohol Rehabilitation, etc.

(10). Alternate Level Of Care Calculation For Exempt Unit

This calculation is for a patient in an exempt facility awaiting release to a non acute facility or awaiting arrangements for home health care.

Note: The above calculation is added (where applicable) to inlier, inlier and long stay outlier payment, high cost outlier payment or transfer payment for total payment. This calculation cannot be used with exempt units or exempt hospitals.

LONG STAY OUTLIER PAYMENT WITH ALTERNATIVE LEVEL OF CARE - REVISED

PAYMENT CALCULATION WORKSHEETS

SHORT STAY OUTLIER PAYMENT - REVISED PAYMENT CALCULATION WORKSHEETS<*>

*PROCEED ONLY IF LINE 13 IS LESS THAN LINE 14 OR IS THE SAME DAY ADMISSION AND DISCHARGE.

**WHERE THE GROUP ARITHMETIC INLIER LENGTH OF STAY IS EQUAL TO ONE, THE SHORT STAY PAYMENT SHALL BE NO MORE THAN THE MAXIMUM INLIER PAYMENT. SUBPART 86-1.55(a)

SHORT STAY OUTLIER PAYMENT - REVISED PAYMENT CALCULATION WORKSHEETS<*>

DETERMINATION OF TRANSFER PAYMENT WITH ALTERNATE LEVEL OF CARE COMPARED TO INLIER, SHORT STAY OUTLIER OR LONG STAY OUTLIER PAYMENT

EXAMPLE 5: DETRMINATION OF TRANSFER PAYMENT WITH ALTERNATIVE LEVEL OF CARE COMPARED TO INLIER, SHORT STAY OUTLIER OR LONG STAY OUTLIER PAYMENT

EXAMPLE 6: DETERMINATION OF HIGH COST OUTLIER PAYMENT WITH ALTERNATE LEVEL OF CARE

EXAMPLE 6: DETERMIANTION OF HIGH COST OUTLIER PAYMENT WITH ALTERNATIVE LEVEL OF CARE

EXAMPLE 7: CALCULATION OF EXEMPT UNIT (HOSPITAL) ACUTE CARE PAYMENT (MEDICAL REHAB., ALCOHOL, REHAB., PSYCH, AIDS CENTER CHILDREN, CANCER, MENTAL RETARDATION, HOSPICE)

EXAMPLE 8: CALCULATION OF ALTERNATIVE LEVEL OF CASE EXEMPT UNIT OR HOSPITAL (MEDICAL REHAB., ALCOHOL, REHAB., PSYCH, AIDS CENTER CHILDREN, CANCER, MENTAL RETARDATION, HOSPICE)

NOTE: The above alternate level of care calculations is to be used only by exempt units or exempt hospitals. The calculation uses data for the unit or hospital in which the patient received services (e.g. Medical Rehabilitation).