HCA posts new rebased Medicaid hospital payment rates

June 22, 2022

On June 15, Washington State Health Care Authority (HCA) posted the Medicaid inpatient and outpatient hospital payment rates effective for July 1, 2022. The changes to rates, grouper versions, and weights are the result of HCA’s rebasing of its prospective payment methodologies conducted over the last year and a half. HCA and Milliman, its consultant, met with a hospital workgroup put together by WSHA representing each impacted hospital or system throughout the process. WSHA member hospital staff and WSHA consultants also reviewed information to ensure the rebasing was done in a budget neutral manner. The new hospital-specific payment rates include normal adjustments for area wage level, medical education costs, and Medicaid Quality Incentive.

HCA  previously released the new APRDRG and EAPG weights and grouper version information to the Medicaid Managed Care organizations (MCOs). WSHA recommends hospital payer relations staff contact the MCOs they are contracted with to confirm they will be prepared to apply the revised rates, grouper versions and weights. The rebasing does not impact existing inpatient psychiatric per diem rates or payment to critical access hospitals.

The rebasing was necessary as the current grouper versions were no longer going to be supported by 3M. The updated national weights are expected to better reflect current relative differences in costs of providing specific services. The rebasing is designed to be budget neutral, meaning aggregate payments under the new grouper versions, weights and hospital-specific rates are expected to be about the same as they would have been under the existing rates and grouper versions. Individual hospitals may experience differences in overall payment, depending on the hospital’s mix of services and changes to the weights for specific services. Hospitals should consider the new payment rates, changes in weights for specific services, and their mix of services when determining impact on reimbursement. HCA will provide on online tool for hospitals to estimate payment amounts assuming the hospitals have determined the expected EAPG or APRDRG classification and severity level for the claim. The online tool, when available, will be posted here. (Andrew Busz, AndrewB@wsha.org)


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