State of Hawai`i Department of Human Services Med-QUEST Division
Inpatient All Patient Refined Diagnosis Related Group (APR DRG) Payment Methodology
Med-QUEST (MQD) implemented a new All Patient Refined Diagnosis Related Group (APR DRG) payment methodology for Medicaid fee-for-service (FFS) inpatient payment purposes for admissions beginning July 1, 2022. APR DRGs are a patient classification system developed by 3M™ and used by payers and providers to classify hospital inpatient stays into clinically meaningful diagnostic groups with similar average resource requirements. APR DRGs provide a mechanism for healthcare payers to make a single case rate payment for similar services provided in a hospital inpatient stay.
MQD's new inpatient APR DRG methodology is applicable to in-state general acute hospitals and children’s hospitals, excluding Critical Access Hospitals, freestanding rehabilitation hospitals, freestanding psychiatric hospitals, long-term acute care hospitals, military hospitals, Veterans Association hospitals, out-of-state hospitals, and State of Hawaii Organ and Tissue Transplant (SHOTT) services. MQD has directed the Medicaid Managed Care Organizations (MCOs) to pay applicable hospitals under this new APR DRG methodology and rates.
MQD has several goals and objectives for the new APR DRG payment methodology, consistent with its QUEST Demonstration goals to promote access, efficient utilization, stabilizing costs, and transforming service delivery. These goals and objectives include the following:
· Establish standardized payment benchmark
· Provide acuity measurement
· Promote equitability across providers
· Incentivize efficient delivery of care
· Enable state control of expenditures
For more information on MQD’s new APR DRG methodology, please refer to the following resources:
Approved SPA 21-0011-Attachment 4.19-A pages related to APR-DRG
MQD APR DRG QI-2211 Memo - July 1, 2022
Milliman Report “Hawai`i Proposed APR DRG Payment Model” – June 14, 2021
Hawai`i July 2022 DRG Calculator – v1.6
Hawai'i January 2023 DRG Calculator - v1.1
MQD APR DRG Answers to FAQs – February 10, 2021
MQD Hospital Stakeholder APR DRG Presentation – April 5, 2021
For questions or feedback on the proposed new APR DRG methodology, please email Eric Nouchi at MQD at [email protected].