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Legislative Memo

Lev Ginsburg
Director of Government Afairs
T 518.465.7511 x207
www.bcnys.org

BILL:

S.7455-A (Savino) / A.10311 (John)

Support

SUBJECT:

Provides higher in-patient hospital reimbursement rate for certain spinal fusion procedures

 

DATE:

July 1, 2010

 

The Business Council of NYS is opposed to S. 7455-A, which would provide a higher reimbursement rate for certain procedures than the APR-DRG inpatient hospital fee schedule adopted by the Workers' Compensation Board.

The Workers' Compensation Board adopted a new reimbursement rate schedule for inpatient hospital services, as presented by the Department of Health and as required by statute.  These new rates are based on a methodology known as All Patients Refined Diagnosis Related Groups (APR-DRG).  The APR-DRG has become the industry standard for assessing resource utilization against large patient populations and allowing an "apples-to-apples" comparison of quality of care and cost effectiveness based on severity of illness, risk of mortality and resource intensity.  The standards are scientifically based, data driven and they are used in many different forms of in-patient health care reimbursement across the country.  The state Department of Health has moved to the APR-DRG, in place of the AP-DRG (all patient diagnostic related group), as the “refined” methodology allows for much better assessment by patient population.  As in any transition to a new methodology, adjustments reflect the wider availability of input and outcome data.  Within APR-DRGs there are changes; that is some reimbursement fee schedules have moved up and others have moved down.

The notion that this set of procedures required for spinal implants is worthy of a higher reimbursement rate -- separate and apart from all other in-patient hospital procedures within the APR-DRGs -- is completely contrary to the intended purpose of using a reimbursement methodology.  Further, the bill's justification notes that the reason for carving out this set of procedures and providing it with a reimbursement rate different than that the APR-DRG indicates is because it results in a shorter hospital stay.  In fact, the reimbursement methodologies by their very definition take into account the variety of factors involved in any hospital stay.

The Business Council believes the APR-DRG methodology should remain as the reimbursement methodology; and that no specific carve outs should be legislatively authorized without specific request from the Department of Health with appropriate data to support such a request.  Given the myriad of procedures undertaken every day in hospitals across the country, it undermines the very reasoning for adopting a methodology to allow for a different reimbursement scheme specifically for workers' compensation claims for a specific set of procedures.

For these reasons, The Business Council opposes this bill.