PAYMENT FOR HOSPITAL SERVICES
§ 1163.51. General payment policy.
(a) Except for services provided in a hospital unit excluded from the DRG prospective payment system, the Department will pay a prospective rate for inpatient hospital services compensable under the MA Program. See § 1163.2 (relating to definitions) for the definition of ‘‘inpatient hospital services.’’ The Department will base the prospective payment on the DRG into which the patient is classified and on the prospective payment rate assigned to a hospital.
(b) In addition to the DRG prospective payment made by the Department for a patient discharged from the hospital, the Department will reimburse a participating hospital for:
(1) Costs for depreciation and interest for buildings and fixtures under § 1163.53a (relating to prospective capital reimbursement system).
(2) Costs for direct medical education under § 1163.55 (relating to payments for direct medical education for Fiscal Years 1993-94 and 1994-95).
(c) If a hospital stay meets the requirements for outliers in § 1163.56 (relating to outliers), the prospective payment amount is adjusted under that section.
(d) A hospital that qualifies for disproportionate share payments under § 1163.67 (relating to disproportionate share payments) receives monthly payments as provided under that section.
(e) When provided to an inpatient, the Department makes separate payment to a hospital for:
(1) Direct care services provided by a practitioner as defined in Chapter 1101 (relating to general provisions) who is under salary or contract with the hospital. The Department pays for the services in accordance with Chapters 1141, 1143, 1145, 1147 and 1149 which govern payment for the practitioner.
(2) Direct care services provided by a midwife as defined in Chapter 1142 (relating to midwives’ services) who is under salary or contract with the hospital. The services are paid under Chapter 1142.
(f) The Department does not pay for an admission that it determines is not medically necessary.
(g) The Department’s prospective payment amount is payment in full for compensable inpatient hospital services. Compensable services provided to an inpatient are covered by the Department’s payment, except for direct care services provided by salaried practitioners and midwives.
(h) Except as specified in subsection (i), no payment for inpatient hospital services is made until the recipient is discharged from the hospital. A recipient is considered discharged from the hospital if one of the following occurs:
(1) The recipient is formally released from the hospital, except if the recipient is transferred to another hospital covered under the MA prospective payment system. See § 1163.58 (relating to payment policy for transfers).
(2) The recipient dies in the hospital.
(3) The recipient is transferred to a private psychiatric hospital, public psychiatric hospital, rehabilitation hospital, drug and alcohol rehabilitation hospital or other facility not covered by the MA prospective payment system.
(4) The recipient is transferred to a hospital unit that is excluded from the MA prospective payment system as specified in § 1163.32 (relating to hospital units excluded from the DRG prospective payment system).
(i) A hospitalization for a continuous period of 90 days or longer may be billed, and paid, on an interim basis. Specific procedures for interim billing and payment are specified in the Inpatient Hospital Handbook issued to providers by the Department.
(j) Payment for emergency room services provided to patients admitted to the hospital is included in the payment for inpatient hospital services. The hospital may not submit a separate bill for these services.
(k) A hospital may not bill an MA recipient for care related to a noncovered service unless the recipient was informed, prior to receiving the service, that the service and the inpatient care relating to it were not covered under the MA Program.
(l) A hospital may not bill the MA Program for services provided to a person who has made application for MA benefits unless the CAO has notified the hospital that the person is eligible for MA benefits.
(m) If a hospital voluntarily terminates the provider agreement, payment for inpatient hospital services is made for MA patients admitted prior to the effective date of the termination of the provider agreement.
(n) If a hospital provides services to a recipient with a psychiatric principal diagnosis but the hospital does not have a psychiatric unit that is excluded from the prospective payment system under § 1163.32, the Department pays a 2-day per diem amount for the hospital stay. The 2-day per diem amount is determined by dividing the normal payment rate for the DRG by the Statewide average length of stay for the DRG and multiplying the result by two.
(o) If a hospital provides services to a recipient with a psychiatric principal diagnosis and the hospital has a psychiatric unit that is excluded from the prospective payment system under § 1163.32, the Department makes payment for these services under Subchapter B (relating to hospitals and hospital units under cost reimbursement principles). The Department makes no payment for the hospital stay under the DRG prospective payment system unless an emergency situation exists and the psychiatric unit is full, in which case the Department will make a 2-day per diem payment determined by dividing the payment rate for the DRG by the Statewide average length of stay for the DRG and multiplying the result by two.
(p) If a hospital provides services to a recipient with a drug or alcohol principal diagnosis but the hospital’s drug and alcohol services have not been approved by the Department of Health, Office of Drug and Alcohol Programs, the Department pays a 2-day per diem amount for the hospital stay. The 2-day per diem amount is determined by dividing the normal payment rate for the DRG by the Statewide average length of stay for the DRG and multiplying the result by two.
(q) Except as specified in subsection (r), if a hospital provides services to a recipient with a drug and alcohol principal diagnosis and the hospital has been approved by the Department of Health, Office of Drug and Alcohol Programs to provide detoxification services, the Department pays the full DRG rate for the hospital stay.
(r) If a hospital provides services to a recipient with a drug or alcohol principal diagnosis and the hospital has a drug and alcohol rehabilitation unit that is excluded from the prospective payment system under § 1163.32, the Department makes no payment for the hospital stay under the DRG prospective payment system. For these hospitals, payment for services provided to a recipient with a drug or alcohol principal diagnosis is made under Subchapter B.
(s) The Department will not pay an acute care hospital for medical rehabilitation services which are not provided in conjunction with acute care services. For recipients receiving only medical rehabilitation services and requiring no acute care services, payment is made only to distinct part medical rehabilitation units or freestanding medical rehabilitation hospitals enrolled in the MA Program under Subchapter B.
(t) Payment for inpatient hospital services, including acute care general hospitals and their distinct part units, private psychiatric hospitals and freestanding rehabilitation hospitals, will not be made in excess of the amount which would be paid in the aggregate for those services under Medicare principles of reimbursement in 42 CFR Part 413 (relating to principles of reasonable cost reimbursement; payment for end-stage renal disease services).
(u) Capital and operating costs related to new or additional beds are nonallowable for purposes of this subchapter unless a Certificate of Need or letter of nonreviewability related to those beds was issued by the Department of Health prior to July 1, 1993.
(v) The Department will not make a separate APR-DRG payment for inpatient acute care general hospital services of a normal newborn.
Authority The provisions of this § 1163.51 amended under sections 201, 403(b), 403.1 and 443.1(1) of the Public Welfare Code (62 P. S. § § 201, 403(b), 403.1 and 443.1(1)).
Source The provisions of this § 1163.51 adopted September 23, 1983, effective September 24, 1983, 13 Pa.B. 2881; amended June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended November 7, 1986, effective July 1, 1986, 16 Pa.B. 4384; amended June 16, 1989, effective immediately and applies retroactively to July 1, 1988, 19 Pa.B. 2563; amended June 1, 1990, effective retroactively to July 1, 1988, 20 Pa.B. 2913; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241; amended April 13, 2012, effective for dates of discharge on and after May 1, 2012, 42 Pa.B. 2023. Immediately preceding text appears at serial pages (201287) to (201288) and (337501) to (337502).
Notes of Decisions During the first year of implementation of the prospective payment plan, it was appropriate to allow a hospital to request retroactive adjustments to its cost reports, even though the errors were unilateral and committed by the hospital. Lancaster General Hospital v. Department of Public Welfare, 535 A.2d 1238 (Pa. Cmwlth. 1988).
This section supports the Department’s decision to deny reimbursement to hospital which admitted patient overnight for treatment which could have safely been rendered in Special Procedure Unit. Episcopal Hospital v. Department of Public Welfare, 528 A.2d 676 (Pa. Cmwlth. 1987).
Cross References This section cited in 55 Pa. Code § 1163.58 (relating to payment policy for transfers); and 55 Pa. Code § 1163.63 (relating to billing requirements).
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