Title: Section 86-1.39 - Inpatient psychiatric services
86-1.39 Inpatient psychiatric services. Inpatient psychiatric services provided in general hospitals, or distinct units of general hospitals, specializing in such inpatient psychiatric services, with regard to patients admitted on and after October 20, 2010, shall be reimbursed on a per diem basis in accordance with the following, provided, however, that such rates applicable to inpatients otherwise subject to the provisions of public health law section 2807-c(1)(a-2)(i) shall be effective with regard to patients admitted on and after January 1, 2011:
(a) Such reimbursement shall be based on the All Patient Refined Diagnostic Related Group (APR-DRG) patient classification system as defined in section 86-1.15(a) of this Subpart.
(b) The operating component of the rate shall be based on a statewide price, utilizing 2005 Medicaid fee-for-service (FFS) inpatient costs adjusted for case mix and the Wage Equalization Factor (WEF) and excluding costs for Direct GME, Electroconvulsive Therapy, and capital costs.
(c) The capital cost components of rates computed pursuant to this section shall be computed on the basis of budgeted capital costs allocated to the hospital, or to the distinct unit of a hospital, in accordance with the provisions of section 86-1.25 of this Subpart divided by the hospital or distinct unit patient days and reconciled to actual total expenses.
(d) The non-operating component of the rate shall reflect 2005 Medicaid fee-for-service Direct GME costs.
(e) The statewide price shall be adjusted for each patient to reflect the following factors:
(1) a service intensity weight (SIW) associated with the case based on the grouper assigned APR-DRG, as described in subdivision (f) of this section, will be applied to the adjusted operating per diem;
(2) a rural adjustment factor of 1.2309 will be applied to the operating per diem for those hospitals designated as rural hospitals;
(3) an age adjustment payment factor of 1.0872 will be applied to the per diem operating component for adolescents ages 17 and under;
(4) a payment adjustment factor of 1.0599 will be applied to the operating component for the presence of a mental retardation diagnosis;
(5) the payment methodology shall include one co-morbidity factor per stay and if more than one co-morbidity is presented, the co-morbidity that reflects the highest payment factor shall be used to adjust the per diem operating component; and
(6) a variable payment factor will be applied to the operating per diem for each day of the stay, with the factor for days 1 through 4 established at 1.2, the factor for days 5 through 11 established at 1.0, the factor for days 12 through 22 established at 0.96 and the factor for stays longer than 22 days established at 0.92.
(f) (1) The table of service intensity weights (SlW's) applicable to rates set pursuant to this section for each effective period is published on the New York State Department of Health website at
and reflects the cost weights assigned to each All Patient Refined (APR) diagnosis related group (DRG) patient classification category. The SIWs assigned to each DRG/APR indicates the relative cost variance of that DRG/APR classification from the average cost of all inpatients in all DRG/APRs. Such SIWs are developed using two years of Medicaid fee-for-service cost data as reported to the Statewide Planning and Research Cooperative System (SPARCS) for the years set forth in paragraph (2) of this subdivision. Costs associated with hospitals that do not have an ancillary charge structure and costs associated with statistical outliers shall be excluded from the SIW calculations.
(2) For rate periods on and after the effective date of this section the SIW shall be computed using SPARCS and reported cost data from the 2005 and 2006 calendar years, as submitted to the department by September 30, 2009.
(g) The table of co-morbidity factors applicable to the rate adjustments described in paragraph (5) of subdivision (e) of this section is published on the New York State Department of Health website at
(h) The first day of a patient's readmissions to the same hospital within thirty days of discharge will be treated as day four for purposes of the variable payment factor computed pursuant to paragraph (6) of subdivision (d) of this section, with subsequent days treated in a conforming manner with the provisions of such paragraph.
(i) Reimbursement for physician services shall not be included in rates set pursuant to this section and such services may be billed on a fee-for-services basis as otherwise provided by applicable provisions of law.
(j) Reimbursement for Electroconvulsive Therapy shall be established at a statewide fee of $281, as adjusted for each facility's WEF, for each treatment during a patient's stay.
(k) Reimbursement for days of alternative level of care for patients whose reimbursement is otherwise subject to this section shall be in accordance with section 86-1.22 of this Subpart.
(l) New inpatient psychiatric exempt hospitals or units established pursuant to article 28 of the public health law shall be reimbursed at the statewide price plus budgeted capital and Direct GME.
(m) For rate periods through December 31, 2014, reimbursement pursuant to this section shall include transition payments of up to twenty-five million dollars on an annualized basis, which shall be distributed in accordance with the following:
(1)(i) Fifty percent of such payments shall be allocated to facilities that experience a reduction in Medicaid operating revenue in excess of threshold percentage set forth in subparagraph (ii) of this paragraph as a result of the implementation of rates set pursuant to this section. Such payments shall be allocated proportionally, based on each eligible facility's relative Medicaid operating revenue loss in excess of the threshold, as determined by the commissioner.
(ii) The threshold percentage described in subparagraph (i) of this paragraph shall be 6.02%.
(2)(i) Fifty percent of such payments shall be allocated to facilities with regard to which it is determined by the commissioner that rates otherwise set pursuant to this section result in Medicaid revenue that is less than the facility's Medicaid costs by a threshold percentage in excess of the threshold percentage set forth in subparagraph (ii) of this paragraph. Such payments shall be allocated proportionally, based on the degree each facility Medicaid operating revenue shortfall exceeds such threshold percentage. For those facilities without available Medicaid fee-for-service cost data, computations pursuant to this paragraph shall be based on each such facility's total operating costs as determined by the commissioner.
(ii) The threshold percentage described in subparagraph (i) of this paragraph shall be 1.20%.
(n) For rate period after October 20, 2010 through March 31, 2011, reimbursement pursuant to this paragraph may include transition payments totaling, in aggregate, up to twelve million dollars and distributed to eligible hospitals in accordance with the following, provided, however, that if less than twelve million dollars is distributed in such rate period, then additional distributions of up to such twelve million dollars may be made in accordance with the provisions of this subdivision in subsequent rate periods:
(1) Eligible hospitals shall be those general hospitals which receive approval for certificate-of-need applications submitted to the Department of Health between April 1, 2010 and March 31, 2011 for adding new behavioral health beds to their certified bed capacity as a direct result of the decertification of other general hospital behavioral health inpatient beds in the same service area, or which the Commissioner of Health, in consultation with the Commissioner of Mental Health, has determined have complied with Department of Health requests to make other significant behavioral health service delivery adjustments in direct response to such decertification.
(2) Eligible hospitals shall, as a condition of their receipt of such rate adjustments, submit to the Department of Health proposed budgets for the expenditure of such additional Medicaid payments for the purpose of providing behavioral health services and such budgets must be approved by the Department of Health, in consultation with the Office of Mental Health, prior to such rate adjustments being issued.
(3) Distributions made pursuant to this paragraph shall be made as add-ons to each eligible facility's inpatient Medicaid rate and shall be allocated proportionally, based on the proportion of each approved hospital budget to the total amount of all approved hospital budgets and such distributions shall be subsequently reconciled to ensure that actual aggregate expenditures are within available aggregate funding.
VOLUME A-2 (Title 10)