Go to Kentucky.gov home page
Kentucky Cabinet for Health and Family Services (Banner Imagery) - Go to home page

Diagnosis Related Group (DRG)

Attention DRG Facilities

Sept. 7, 2010 - This is a reminder that Kentucky Medicaid will require all inpatient DRG facilities to submit a present on admission (POA) indicator beginning Sept. 1, 2010, on claims with a discharge date on or later than July 1, 2010. The POA is required on all inpatient claims. Claims will be denied if the POA is missing. Admission and emergency diagnoses are excluded. If you should have any questions, please contact HP Provider Inquiry at (800) 807-1232. The billing instructions are located on the right.

FAQs
  1. How will technical denials be handled?
    There is no foreseeable change in the process.
  2. Will DRG rates be available electronically?
    Yes. Hospitals will receive an electronic file of the relative weights and average length of stay; however, base rates will not be electronic.
  3. What does EDS want billed if patient is only eligible for part of the stay?
    Hospitals may only bill for days when the patient was eligible. For proper calculation of the reimbursement, the actual admit and discharge date and all ICD-9 and procedure codes (including those from when the patient was ineligible) should be provided.
  4. What is the source of the cost-to-charge used to calculate the outlier?
    The cost-to-charge ratio is the same cost-to-charge ratio used by Medicare for outlier calculations as of Oct. 1 of the preceding year.
  5. How will utilization review change?
    Hospitals will still be required to contact the PRO for authorization prior to admission. Concurrent review for services reimbursed under the DRG will no longer be required. Critical access, rehab, ventilator facilities and all psychiatric services still will be subject to concurrent review criteria. The PRO also will be conducting retroactive review of admissions including analysis of coding patterns, changes in case mix, re-admissions, outliers, quality of care, etc. The review will require hospitals to provide copies of medical records upon request and may include onsite review.
  6. Will KMAP follow any changes in outlier calculation also made by Medicare?
    Yes, if it is determined that any changes made by Medicare are in the best interests of Medicaid.
  7. Will there still be retroactive review for eligibility?
    The eligibility process will not be affected by the change to DRG reimbursement.
  8. Will there still be interim billing?
    There will be no interim billing with DRGs.
  9. How is the cost figured for the outlier payments?
    Costs were calculated by multiplying the facility-specified cost-to-charge ratio (described in question 4.) times the covered charges for each claim. Payment will be 80 percent of the amount that the estimated costs exceed the outlier threshold and DRG payment.
  10. How will DMS pay when psych, medical or rehab is performed by the same provider?
    Payment, whether DRG or per diem, if paid by DRG it will be based upon the principal diagnosis. Per deim is paid per diem per day.
  11. Are professional component fees included in the DRG?
    No. Physicians will need to receive Medicaid provider numbers, and claims must be billed on the CMS 1500.
  12. How will transfers be handled under DRG?
    The rules governing transfers and post-acute care transfers are the same as those used by Medicare.
  13. Will the three-day rule effect ER patients?
    Yes, if the diagnosis is the same as diagnosis at time of admission.
  14. If a provider is reclassified for Medicare will Medicaid make the same changes?
    Yes.
  15. Will freestanding or hospital-based rehabs go to the DRG system?
    Freestanding rehab will be reimbursed under the per diem system. Rehab provided in an acute care facility will be under DRGs.
  16. Will there be a change to the cost report or the paid claims listing?
    There is no change anticipated in the cost report. The paid claims listing is currently being revised and will be shared with the hospitals when completed.

 

DRG Web Resources
  Provider Billing Instructions  

Regulations, Provider Letters, and Weights
 

Regulations

Provider Letters

Weights

  • DRG Relative Weights (Effective 07/01/12) Excel - PDF
 

For questions?
 

Regarding Policy, contact:
Division of Policy and Operations
Benefits Branch
275 E. Main St.
6W-D
Frankfort, KY 40621
Phone: (502) 564-6890
E-mail:
CHFS DMS Webmaster

 

Last Updated 11/1/2013
Privacy | Security | Disclaimer | Accessibility Statement