PDFWAC 182-550-3700
DRG high outliers.
(1) The medicaid agency identifies a diagnosis-related group (DRG) high outlier claim based on the claim's estimated costs. The agency allows a high outlier payment for claims paid using the DRG payment method when high outlier criteria are met.
(a) To qualify as a DRG high outlier claim, the estimated costs for the claim must be greater than the outlier threshold effective for the date of admission. The outlier threshold amount is depicted in the following table:
Dates of Admission | Pediatric | Nonpediatric | |||
February 1, 2011 - July 31, 2012 | Base DRG * 1.50 | Base DRG * 1.75 | |||
August 1, 2012 - June 30, 2013 | Base DRG * 1.429 | Base DRG * 1.667 | |||
July 1, 2013 - June 30, 2014 | Base DRG * 1.563 | Base DRG * 1.823 | |||
July 1, 2014, and after | Base DRG + $40,000 | Base DRG + $40,000 | |||
(b) The agency calculates the estimated costs of the claim by multiplying the total submitted charges, minus the nonallowed charges on the claim, by the hospital's ratio of costs-to-charges (RCC).
(c) When a transferring hospital submits a transfer claim to the agency, the high outlier criteria used to determine whether the claim qualifies for high outlier payment is the prorated DRG amount for the claim before the transfer payment.
(2) The agency calculates the high outlier payment by multiplying the hospital's estimated cost above threshold (CAT) by the outlier adjustment factor. The outlier adjustment factors, which vary by dates of admission and inpatient payment policy, are depicted in the table at the end of this subsection.
(a) For inpatient claims paid under the all-patient-diagnosis-related group (AP-DRG), the agency uses a separate outlier adjustment factor for:
(i) Pediatric services, including all claims submitted by children-specialty hospitals;
(ii) Burn services; and
(iii) Nonpediatric services.
(b) For inpatient claims paid under the all-patient refined-DRG (APR-DRG), the agency uses a separate outlier adjustment factor for a:
(i) Severity of illness (SOI) of one or two; or
(ii) SOI of three or four.
AP-DRG Dates of Admission | Pediatric | Burn | Nonpediatric |
Before August 1, 2012 | CAT * 0.95 | CAT * 0.90 | CAT * 0.85 |
August 1, 2012 - June 30, 2013 | CAT * 0.998 | CAT * 0.945 | CAT * 0.893 |
July 1, 2013 - June 30, 2014 | CAT * 0.912 | CAT * 0.864 | CAT * 0.816 |
APR-DRG Dates of Admission | SOI 1 or 2 | SOI 3 or 4 | |
July 1, 2014, and after | CAT * 0.80 | CAT * 0.95 |
(3) For state-administered programs (SAP), the agency applies the hospital-specific ratable to the outlier adjustment factor.
(4) This subsection contains examples of outlier claim payment calculations.
DRG SOI | DRG Allowed Amount | Threshold1 | Cost2 | Outlier Percent | Ratable | Base DRG | Outlier3 | Claim Payment4 |
1 | $10,000 | $50,000 | $100,000 | 0.80 | n/a | $10,000 | $40,000 | $50,000 |
3 | $10,000 | $50,000 | $100,000 | 0.95 | n/a | $10,000 | $47,500 | $57,500 |
1 | Threshold = $40,000 + base DRG |
2 | Cost = Billed charges - noncovered charges - denied charges |
3 | Outlier = (cost - threshold) * outlier percent |
4 | Claim payment = base DRG + outlier |
(5) When directed by the legislature to achieve targeted expenditure levels, as described in WAC 182-550-3000(8), the agency may apply an inpatient adjustment factor to any of the high outlier thresholds and to any of the outlier adjustment factors described in this section.
(6) The agency applies the following to the payment for each claim:
(a) All applicable adjustments for client responsibility;
(b) Any third-party liability;
(c) Medicare payments; and
(d) Any other adjustments as determined by the agency.
[Statutory Authority: RCW 41.05.021 and 41.05.160. WSR 18-12-043, § 182-550-3700, filed 5/30/18, effective 7/1/18. Statutory Authority: RCW 41.05.021 and chapter 74.60 RCW. WSR 14-12-047, § 182-550-3700, filed 5/29/14, effective 7/1/14. WSR 11-14-075, recodified as § 182-550-3700, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.04.050, 74.04.057, 74.08.090, 74.09.500, and 2009-11 Omnibus Operating Budget (ESHB 1244). WSR 09-12-062, § 388-550-3700, filed 5/28/09, effective 7/1/09. Statutory Authority: RCW 74.08.090, 74.09.500 and 2005 c 518. WSR 07-14-051, § 388-550-3700, filed 6/28/07, effective 8/1/07. Statutory Authority: RCW 74.08.090, 74.09.500. WSR 03-13-053, § 388-550-3700, filed 6/12/03, effective 7/13/03. Statutory Authority: RCW 74.08.090 and 42 U.S.C. 1395x(v), 42 C.F.R. 447.271, .11303, and .2652. WSR 01-16-142, § 388-550-3700, filed 7/31/01, effective 8/31/01. Statutory Authority: RCW 74.08.090, 42 U.S.C. 1395 x(v), 42 C.F.R. 447.271, 447.11303 and 447.2652. WSR 99-06-046, § 388-550-3700, filed 2/26/99, effective 3/29/99. Statutory Authority: RCW 74.08.090, 74.09.730, 74.04.050, 70.01.010, 74.09.200, [74.09.]500, [74.09.]530 and 43.20B.020. WSR 98-01-124, § 388-550-3700, filed 12/18/97, effective 1/18/98.]