Newsletter Vol. 22, No.16

Effective July 1, 2012: (1) Billing team must identify all claims to out-of-state acute care hospitals participating in NJ Medicaid/NJ FamilyCare and apply new reimbursement methodology—use the LESSER of NJ DRG rates (inpatient) or NJ statewide average cost-to-charge ratio (outpatient), the out-of-state hospital's home state Medicaid rate, or total charges. (2) Remove any DSH payment amounts from reimbursement calculations for out-of-state hospitals; these will no longer be paid. (3) Request official documentation from each out-of-state acute care hospital provider showing the Medicaid rate established by their home state Medicaid agency (e.g., copy of state agency letter specifying the rate). (4) Update billing software rules to enforce the lesser-of calculation and require documentation submission before claim processing. (5) Establish a documentation tracking process—if official rate documentation is not provided upon request, deny the claim. (6) For out-of-state hospitals not participating in Medicaid in their home state, revert to LESSER of NJ DRG rates (inpatient) or NJ cost-to-charge ratio (outpatient) or total charges. Failure to implement will result in incorrect reimbursement and potential overpayments or underpayments.