Final Medicaid Policies Affect Outpatient, Neonatal Intensive Care Services

The Medical Services Administration (MSA) recently released two final policies that impact hospital Medicaid payments. One relates to the rural access pool and the other updates payment to hospitals with approved neonatal intensive care units (NICUs).

MSA Policy 20-39 restores the rural access pool for fiscal year (FY) 2020 and provides a Medicaid outpatient rate increase for critical access hospitals (CAHs) effective Jan. 1, 2020, while removing CAHs from rural access pool eligibility for FY 2021.

The MSA received approval of the state plan amendment (SPA) submitted to the Centers for Medicare & Medicaid Services to increase Medicaid outpatient rates by 42.5% for services provided at CAHs effective Jan. 1, 2020. The SPA approval gives the MSA flexibility to implement the 7% outpatient rate increase for all hospitals effective April 1, 2020, as included in the FY 2020 Medicaid budget.

The MSA recently released the outpatient rate changes for CAHs and all other hospitals and is making system changes to implement the increases, which apply to both Medicaid fee-for-service and managed care organization claims. Affected claims will be reprocessed and paid at the higher rate following completion of the system changes.

MSA Policy 20-45 updates payment policy for hospitals that have approved NICUs effective for discharges on and after July 1, 2020. The final policy aligns with updated guidance from the National Uniform Billing Committee, which recognizes revenue codes 0173 and 0174 as NICU services that are eligible for payment at the alternate all-patient refined diagnosis-related group (APR-DRG) weight. This is a change from the current policy that recognizes only revenue code 0174 as NICU services.

Members with questions on these final policies should contact Vickie Kunz at the MHA.