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Provider Notice Issued 12/01/2022

Date:   December 1, 2022

To:       Participating Hospitals:  Chief Executive Officers, Chief Financial Officers, and Patient Accounts Managers

Re:      Updates to Hospital Reimbursement Components Effective January 1, 2023

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The Department will not be updating grouper versions on January 1, 2023 and will continue to utilize Grouper Version 36 of the 3M All Patient Refined Diagnosis Related Group (APR-DRG) payment system for inpatient claims and Grouper Version 3.13 of the Enhanced Ambulatory Patient Groups (EAPG) for outpatient claims. 

In accordance with 89 Ill. Adm. Code Section 149.100, the Department is updating components of the inpatient reimbursement system including the Medicare IPPS wage index and cost to charge ratios. These updates will affect the base rates assigned to individual hospitals reimbursed under the APR-DRG grouper.

Effective with discharges on and after January 1, 2023: 

  • For Medicare IPPS hospitals that are in-state or are out-of-state Medicaid cost-reporting hospitals, the wage index is based on the Medicare inpatient prospective payment system post-reclass wage index effective at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred. 
  • For in-state non-Medicare IPPS hospitals and out-of-state non-Medicaid cost-reporting hospitals, the wage index is based on the Medicare inpatient prospective payment system wage index for the hospital's Medicare CBSA effective at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred.

 
In accordance with 89 Ill. Adm. Code Section 149.105(b), the Department is updating the Medicare IPPS outlier cost to charge ratios for those hospitals reimbursed under the APR-DRG payment system. Effective with discharges on or after January 1, 2023:

  • For Medicare IPPS hospitals, the outlier cost-to-charge ratio is based on the sum of the Medicare inpatient prospective payment system hospital-specific operating and capital outlier cost-to-charge ratios effective at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred. 
  • For non-Medicare IPPS hospitals, the outlier cost-to-charge ratio is based on the sum of the Medicare inpatient prospective payment system statewide average operating and capital outlier cost-to-charge ratios for urban hospitals for the state in which the hospitalis located, effective at the beginning of the federal fiscal year starting three months prior to the calendar year during which the discharge occurred.


Effective with dates of service on or after January 1, 2023, in accordance with 89 Ill. Adm. Code Section 148.140, the Department is updating the Medicare IPPS wage index used in calculating the outpatient EAPG base rates. 

For in-state providers and out-of-state Illinois Medicaid cost reporting providers, the wage index used for inpatient reimbursement is as described in 89 Ill. Adm. Code Section 149.100. For out-of-state non‑cost reporting providers, the wage index used to adjust the EAPG standardized amount shall be a factor of 1.0.

New rate sheets and updated inpatient and outpatient calculators will be posted soon to the Department's Hospital Reimbursement Notifications webpage.

Any further questions may be directed to the Bureau of Rate Development and Analysis at
217-785-0710.

 
Kelly Cunningham, Administrator
Division of Medical Programs

 

 



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