Relates to diagnosis-related groups and service intensity weights for total hip joint replacement and total knee joint replacement inpatient cases for a general hospital

Summary of provisions

This legislation would provide that for reimbursement rates during the period January first, two thousand ten through December thirty-first, two thousand thirteen, the commissioner of health may determine that the diagnosis-related groups and service intensity weights for total hip joint replacement and total knee joint replacement inpatient cases for a general hospital shall be the diagnosis-related groups and service intensity weights in effect on December thirty-first, two thousand seven pursuant to subdivision three of section 2807-c of the public health law.

The commissioner of health may make such a determination if the majority of inpatient surgery cases for the general hospital are orthopedic cases, the general hospital has developed a center of excellence in orthopedic surgery and sports medicine, and the general hospital incurred a significant reduction in non-governmental reimbursement for such cases beginning in two thousand eight as a result of revisions to the service intensity weights for these cases. Such determination shall not affect the diagnosis related groups or service intensity weights for any other cases or for any other general hospital.

Justification

In 2008, the Department of Health began implementing revised service intensity weights. Service intensity weights recognize the typical resource consumption of a particular type of case, and thus impact reimbursement for the case. Concerns were expressed that the new weights did not properly include the cost of orthopedics and prosthetics for hip and knee replacements, and that there may have been a problem in the manner in which implants were reported on the hospital cost reports. For most hospitals, orthopedics is not the majority of their surgeries, and therefore this reporting problem was not a major concern. However, Community Memorial Hospital in Hamilton has developed orthopedics as a specialty service and this service represents approximately 75% of its surgery cases.

In addition, most of such surgeries performed at Community Memorial are paid for by commercial insurers, not Medicaid. While the weights are set by the State for the specific purpose of Medicaid reimbursement, many of the commercial insurers use the weights and the diagnosis related groups established by the State for Medicaid reimbursement. This legislation will only impact community Memorial Hospital which, as a small rural hospital, is not able to negotiate higher rates with these commercial insurers for these cases.

A safety net for the people of Central New York, Community Memorial Hospital is dedicated to treating all patients regardless of ability to pay. It has operated its Orthopedic Medicine program for more than 25 years and the program has won numerous national awards for quality,

serves as regional referral center. However, the financial jeopardy of the hospital is threatened by the losses in this program. In order to increase efficiency and reduce costs, Community Memorial is entering into a passive parent relationship with Crouse Hospital, which will produce more streamlined, cost-efficient care in Central New York.

Restoring the weights for these cases to their 2007 level will help Community Memorial survive financially and help support its relationship with Crouse Hospital.

Legislative history

2012: A.10701

Fiscal implications

There would be no retroactive impact on State Medicaid rates therefore the impact to the State would be minimal.

Effective date

This act shall take effect immediately and, with the exception of rates of payment made by state governmental agencies, shall have been deemed to be in effect on and after January 1, 2010.