(1) The department's APR-DRG prospective payment rate for inpatient hospital services is based on the classification of inpatient hospital discharges to APR-DRGs. The procedure for determining the APR-DRG prospective payment rate is as follows:

(a) Effective July 1st of each year, the department will assign an APR-DRG to each Medicaid client discharge in accordance with the current APR-grouper program version, as developed by 3M Health Information Systems. The assignment and reimbursement of each APR-DRG is based on:

(i) the ICD-9-CM principal diagnoses;

(ii) all ICD-9-CM secondary diagnoses;

(iii) all ICD-9-CM medical procedures performed during the client's hospital stay;

(iv) the client's age;

(v) the client's gender;

(vi) the client's discharge status; and

(vii) diagnosis codes related to hospital-acquired conditions that are not present or undetermined to be present on admission.

(b) For each APR-DRG, the department determines a relative weight using a national database from 3M that reflects the cost of hospital resources used to treat cases. The relative weights have been recentered so that the average Montana Medicaid stay has a base weight of 1.00. Adjustments are applied to specific APR-DRG weights to reflect department policy. The relative weight for each APR-DRG is available upon request from Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

(c) The department computes a Montana average base price per case. This base price includes in-state and out-of-state distinct part rehabilitation units and long term care (LTC) facilities. Effective August 1, 2011 the average base price, including capital expenses, is $4,129. Disproportionate share payments are not included in this price.

(i) The average base price for Center of Excellence hospitals, including capital expenses, is $6,890. Disproportionate share payments are not included in this price.

(d) The relative weight for the assigned APR-DRG is multiplied by the average base price per case to compute the APR-DRG prospective payment rate for that Medicaid client discharge.

(e) For claims with dates of payment on or after August 1, 2011, when a hospital-acquired condition occurs during hospitalization and the condition was not present or undetermined to be present on admission, claims will be paid as though the diagnosis is not present or undetermined to be present. Hospital-acquired conditions refers to the Centers for Medicare and Medicaid Services (CMS) definition as provided in Section 1886(d)(4) of the Social Security Act.

(2) The Montana Medicaid APR-DRG relative weight values, average national length of stay (ALOS), and outlier thresholds are contained in the APR-DRG Table of Weights and Thresholds (effective July 1, 2010) published by the department. The department adopts and incorporates by reference the APR-DRG Table of Weights and Thresholds (effective July 1, 2010). Copies may be obtained from the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.