Basis of reimbursement -- Inpatient services -- Hospitals with more than 30
Medicaid discharges. Reimbursement for services provided to a
patient admitted to an in-state acute care hospital that had more than 30
Medicaid discharges during the hospital's fiscal year ending after June 30,
1996, and before July 1, 1997, is based on DRGs and weight factors, the
hospital's target amount, and capital and education costs per day. A hospital's
base target amount is calculated from the cost report submitted to the Medicare
program for the hospital's fiscal year ending after June 30, 1996, and before
July 1, 1997, and adjusted annually for inflation as appropriated by the
Legislature and changes to the DRG weight factors. A list of the DRGs and their
associated weight factors may be obtained on the department's website located
The department shall use the following method to calculate
the amount of reimbursement:
(1) Multiply the hospital's target amount by the
weight factor of the DRG assigned to the claim;
(2) Multiply the daily capital and education
cost for the hospital by the number of days the patient was in the hospital;
(3) Add the products of subdivisions (1) and (2)
of this section.
In addition to the regular DRG reimbursement, the
department shall pay for a cost outlier if the claim qualifies for the cost
outlier as defined in § 67:16:03:01. The amount of the cost outlier
payment is equal to 90 percent of the cost outlier.
When calculating the rate of reimbursement, the department
uses only those ICD-9-CM codes that reflect the services furnished to or on
behalf of the eligible individual and the conditions that affected the
treatment or extended the length of the individual's stay.
If a patient is transferred, referred, or discharged to
another hospital or another type of special care facility and the transfer,
referral, or discharge is medically necessary or if a patient leaves the
hospital against medical advice, reimbursement is on a per diem basis. To
determine the rate of reimbursement, multiply the hospital's target amount by
the weight factor of the DRG assigned to the claim, divide the result by the
geometric mean length of stay, multiply the result by the number of days the
individual was an inpatient, and add the hospital's daily capital and education
cost. The amount paid may not exceed 100 percent of the allowed DRG reimbursement.
The amount of reimbursement calculated above is reduced by
11.48 percent after any cost sharing amount due from the patient and any third
party liability amounts have been deducted and then increased by 0.5 percent
for hospitals that are not classified as Medicare Critical Access or Medicaid
Access Critical. Hospitals that are classified as Medicare Critical Access or
Medicaid Access Critical are exempt from the 11.48 percent reduction in
reimbursement. The rate of reimbursement is increased by 1.8 percent for
hospitals that are classified as Medicare Critical Access or Medicaid Access
For inpatient costs for Medicaid Access Critical facilities
the department uses the facility's cost report to determine whether any
adjustment to reimbursement is necessary for amounts due the provider.
1975, ch 16, § 1; 1 SDR 30, effective October 13, 1974; 7 SDR 66, 7 SDR
89, effective July 1, 1981; 11 SDR 26, effective August 21, 1984; transferred
from § 67:16:03:12, 12 SDR 6, effective July 28, 1985; exemptions for
certain hospitals transferred to § 67:16:03:06.02, 13 SDR 8, effective
August 3, 1986; 15 SDR 2, effective July 17, 1988; 17 SDR 180, effective May
27, 1991; 22 SDR 143, effective May 9, 1996; 24 SDR 19, effective August 21, 1997;
24 SDR 144, effective April 30, 1998; 25 SDR 116, effective March 24, 1999; 30
SDR 26, effective September 3, 2003; 31 SDR 39, effective September 29, 2004;
36 SDR 215. effective July 1, 2010; 36 SDR 215, adopted June 11, 2010,
effective July 1, 2011; 37 SDR 236, effective June 28, 2011; 37 SDR 236,
adopted June 8, 2011, effective July 1, 2012; 39 SDR 15, effective August 6,
SDCL 28-6-1(2), 28-6-1.1.
SDCL 28-6-1(2), 28-6-1.1.
Basis of reimbursement – Outpatient services other than
outpatient laboratory and outpatient surgical procedures,
of payment -- Inpatient services -- Hospitals with less than 30 Medicaid
discharges, § 67:16:03:06.03.
Reimbursement of outpatient laboratory services,
Use of ICD-9-CM, § 67:16:01:26.