HCA to Change Medicaid Outpatient Hospital Payment April 1, 2017

December 16, 2016

On April 1, 2017, the Health Care Authority (HCA) plans to update the outpatient weights used for payment under the Enhanced Ambulatory Payment Group (EAPG) system at prospective payment hospitals.  HCA plans to update from the version 3.7 currently used to version 3.11 and rescale the weights to ensure budget neutrality.  HCA has provided information to WSHA and our task force on Medicaid payment as well as informed the Medicaid managed care plans.

The newer weights are expected to better reflect changes in the relative cost of services. Also, 3M Corporation, which developed the EAPG system advised HCA it would not support version 3.7 after 2017.  HCA had originally considered adopting the new weights as January 1, 2017, but agreed to a request from WSHA’s Medicaid Payment Task Force for a delay to allow time for vendor software development and to provide sufficient advance notice to managed care plans. We recommend hospital contracting staff contact their contracted plans to see if they will be implementing the revised weights as of the April 1 date.

HCA will be using the updated 3.11 weights but scaling them down by a uniform percentage to ensure budget neutrality.  No change is planned to the hospital rates themselves. HCA will continue its current policy adjustments on pediatric services and high cost drug EAPG categories.  Because the change to the EAPG weights varies by type of service, some hospitals will experience payment decreases and others increases, depending on their mix of services. WSHA previously sent each hospital a facility-specific impact estimate based on the Health Care Authority’s analysis.  (Andrew Busz, andrewb@wsha.org)


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