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June 2010

Texas Medicaid Rebasing Standard Dollar Amounts

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Billy Carlton
Hospitals subject to Texas Medicaid’s Prospective Payment System (PPS) reimbursement methodology will soon undergo a rebasing (recalculation) of the program’s Payment Division Standard Dollar Amounts (PDSDAs). By the end of May, hospitals should have received initial notification letters describing new inpatient PDSDAs resulting from the current rebasing process. If hospitals want to appeal these rates, they must send a written request with specific claim documentation to the Texas Health and Human Services Commission (HHSC) by June 21, 2010.

Medicaid claims with admission dates during the federal fiscal year ending September 30, 2008, (the base period) and adjudicated within six months of year-end were used for the rebasing process and will impact Medicaid payments beginning September 1, 2010. Providers should be aware of several key points while reviewing the underlying data supporting the PDSDAs:

  • The HHSC claims database used for rebasing should be requested from Texas Medicaid & Healthcare Partnership (TMHP) and reconciled with internal records
  • Hospitals should be aware that Primary Care Case Management (PCCM) claims are included in the rebasing process
  • Dual eligible and Medicaid spend-down claims are not included in the PDSDA rebasing calculation

HHSC will adjust each hospital’s base year claims for Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) costs using an interim rate developed from either a tentative or final cost report covering the 2008 base year. If a 2008 cost report is unavailable, hospitals will be assigned an interim rate of 50 percent. Hospitals should review interim rates to confirm appropriate cost reports are being used. The TEFRA costs for base year claims will be used to recalculate PDSDAs, DRG relative weights, mean length of stay and day outlier thresholds. Also, there is a separate rebasing process for new or merged hospitals. HHSC will not recalculate the PDSDA of a newly acquired facility unless it became part of the acquiring hospital’s provider number.

For more information on key items to review in the PDSDA rebasing process, contact Billy Carlton at 210.268.1091 or Tom Watson at 972.392.7400 or your BKD advisor.

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