The New Jersey Division of Medical Assistance issued proposed rules this week to establish a new diagnosis related group (DRG) rate setting methodology, based on a DRG weighting system, using recent Medicare cost report and claim data.
The new methodology uses a statewide rate per case based on a 2003 cost base and 2006 paid claims data. These new DRG rates will apply to general acute care hospitals.
The new DRG rates will reimburse New Jersey general acute care hospitals for Medicaid fee-for-service inpatients and will also be used to price inpatient charity care claims used to determine annual charity care subsidy payments to hospitals. The rates are scheduled to go into effect August 1.
The proposed regulations include the opportunity for hospitals to receive rate “add-ons” for meeting certain criteria. Hospitals identified as a critical service provider of either delivery/neonate services or mental health/substance abuse services will receive a 10 percent add-on to their base rate. Hospitals that qualify as a critical service provider of both services will receive a 15 percent add-on.
In addition, hospitals identified as a critical access provider to a significantly low income population will qualify for an additional 10 or 15 percent increase and hospitals meeting all criteria will receive a maximum 30 percent increase.