Inpatient payments include two methods of
reimbursement: per diem and all patient refined – diagnosis related groups (APR-DRGs).
Per diem reimbursed hospitals include rehabilitation hospitals and distinct
part units, psychiatric hospitals and distinct part units, specialty children's
hospitals, and long-term stay hospitals. Under per diem methodology, hospitals
receive a flat rate for each day of inpatient services provided.
Under APR-DRG, the department reimburses the
hospital based on the diagnoses and procedures performed during the hospital
stay. The diagnoses associated with the hospital stay are placed into groups
requiring a similar intensity of services.
The APR-DRG reimbursement, like the system used
by the federal Medicare program, is based on the average cost of providing
services for the specific diagnosis group, regardless of how long a specific
client may have been in the hospital.
The department does adjust payments for
exceptionally high costs.