N.J. Admin. Code § 10:52-14.7

Current through Register Vol. 56, No. 19, October 7, 2024

Section 10:52-14.7 - Criteria to qualify for add-on amounts to the Statewide base rate

(a) Each rate year, the Division will determine if each general acute hospital participating in the New Jersey Medicaid/NJ FamilyCare program is eligible for add-on amounts. The Division determined hospital eligibility for add-on amounts in the initial rate year as described in (c) below and eligibility and add-ons will be calculated each rate year thereafter using the most recent year for which there is 24 months of Medicaid/NJ FamilyCare paid claims data. However, if the initial rate year is a partial year, add-on amounts will remain the same for the second rate-year.

(b) Each hospital will receive written notification of its final rate annually, which includes any add-on amounts for which the hospital qualifies. 2006 cost report and claim data was used to set the rates and will be used to determine add-on amounts in the initial rate year. Effective August 3, 2009, the eligibility of hospitals for add-on amounts will be determined based on the methodology in (c) below.

(c) Add-on amounts were developed to provide additional payments for high volumes of inpatient services to Medicaid/NJ FamilyCare and other low income patients. These add-on amounts increase the Statewide base rate for qualifying hospitals as a percentage add-on to the Statewide base rate. These add-on amounts are based on high volume Medicaid/NJ FamilyCare inpatient services or low income access.

1. High volume Medicaid/NJ FamilyCare inpatient services, referred to as critical services, are comprised of two categories; the first category is maternity and neonates, and the second category is mental health and substance abuse. The data used to determine eligibility as a critical service provider is patient days from the Medicaid/NJ FamilyCare fee-for-service claims for all DRGs in Major Diagnostic Categories (MDCs) 14, 15, 19, and 20, as specified in the All Patient Diagnosis Related Groups Patient Classification System Definitions Manual published by 3M Health Information Systems. The methodology determines eligibility for add-on amounts separately for each of the two categories, ranks patient day volume from high to low, and deems eligible those hospitals with patient days in the top 25 percent (referred to as the first quartile) of the total number of hospitals. Hospitals ranked in the first quartile for either category qualify for a 10 percent add-on to the Statewide base rate, and those hospitals that ranked in the first quartile of both categories qualify for a 15 percent add-on to the Statewide base rate.

2. High volume low income utilization, referred to as critical access, is expressed as a percentage and is defined as the sum of Medicaid/NJ FamilyCare fee-for-service days, Medicaid/NJ FamilyCare managed care days and charity care days, divided by total patient days. The data sources are Medicaid/NJ FamilyCare fee-for-service and charity care claims adjudicated by the New Jersey Medicaid/NJ FamilyCare fiscal agent and Medicaid/NJ FamilyCare MCO and total patient days as reported on the Medicare cost reports. Each hospital's low income utilization percentage is ranked from high to low, and hospitals in the first quartile are classified as critical access hospitals. Critical access hospitals qualify for a 10 percent add-on to the Statewide base rate. However, those hospitals with the highest low income utilization percentages for the top 10 percent of the total number of hospitals qualify for an additional five percent, which equals a 15 percent add-on to the Statewide base rate.

3. The Medicaid/NJ FamilyCare claims data used to calculate the add-on amounts as defined in (c)1 and 2 above, will be the most recent year of data available for which the Division has 24 months of Medicaid/NJ FamilyCare paid claims data as of July 1 of the year prior to the rate year. For each year the add-on amounts are calculated, the Medicaid/NJ FamilyCare claims will have DRGs assigned using the version of the AP-DRGs Grouper that was used to pay the claims in that year.

4. The total number of hospitals referenced in (c)1 and 2 above is all hospitals that are open at the beginning of the rate year. The total number of hospitals is used in the hospital counts in the calculation of add-on amounts under (c)1 above, regardless of whether or not the hospitals have data in the relevant MDCs. The number of hospitals as calculated in (c)1 and 2 above are rounded to the nearest whole number.

(d) Regarding the treatment of closed hospitals, the calculation of add-on amounts will be determined as follows:

1. Hospitals expected to be closed by December 31 of the year prior to the rate year will be excluded from the add-on calculations. Only those hospitals with a Certificate of Need for closure approved by the Department of Health (DOH) and a closure date set by DOH of December 31 or earlier will be excluded from the add-on calculations. The Division will only use hospital closure information available up to October 1 of the year prior to the rate year for add-on calculations; and

2. The add-on amounts will be calculated only once prior to the beginning of each rate year. If hospital closures occur before the December 31 prior to the rate year without prior notification as described in (d)1 above, the Division will not recalculate the add-on amounts. Hospital closures during the rate year will not result in a recalculation of the add-on amounts.

N.J. Admin. Code § 10:52-14.7

Amended by 50 N.J.R. 1261(a), effective 5/21/2018