Notice of Proposed Agency Action 

SUBJECT:	MassHealth: Payment for Out-of-State Acute Hospital Services effective April 27, 2012

AGENCY:		Massachusetts Executive Office of Health and Human Services (EOHHS), Office of Medicaid

Introduction

The following describes and summarizes proposed changes in MassHealth payment for services provided by
out-of-state acute hospitals. The rate year 2012 (RY2012) MassHealth in-state acute hospital inpatient
and outpatient methodologies are in the Final Notice of Agency Action effective October 1, 2011, which
is available at www.mass.gov/masshealth, (click on the link to “MassHealth Regulations and Other
Publications” and the link to “Special Notices for Hospitals”). For further information regarding RY2012
payment methods and rates, you may contact Kiki Feldmar at the Executive Office of Health and Human
Services, Office of Acute and Ambulatory Care, 100 Hancock Street, 6th Floor, Quincy, MA, or 
by e-mail at kiki.feldmar@state.ma.us.

Proposed Change in Payment Method

1.	Out-of-State State Acute Hospital Inpatient Services

Currently, all out-of-state acute hospitals are paid for inpatient services provided to MassHealth
members based on the Medicaid rate methodology used by that state. There are a number of different
payment methods that vary by state. Effective April 27, 2012, MassHealth will pay out-of-state acute
inpatient hospitals a per discharge payment equal to the median inpatient MassHealth Standard Payment
Amount Per Discharge (SPAD) for in-state acute hospitals.  For a description of the Rate Year 2012 SPAD,
please see the Final Notice of Agency Action referenced above.

The Rate Year 2012 out-of-state acute inpatient hospital rate will be $7,611.47 per discharge for all
out-of-state acute hospital admissions.  

2.	Out-of-State Acute hospital Outpatient Services

Currently, all out-of-state acute hospitals are paid for outpatient services provided to MassHealth
members based on the Medicaid rate methodology used by that state. There are a number of different
payment methods that vary by state. Effective April 27, 2012, MassHealth will pay out-of-state acute
outpatient hospitals a payment per episode of care equal to the median outpatient Payment Amount Per
Episode (PAPE) for in-state acute hospitals for these same services, or according to the fee schedule
promulgated by the Division of Health Care Finance and Policy, where applicable.  Certain services,
including laboratory services, are carved out of the PAPE calculation and payment, and will be paid for
in accordance with the applicable fee schedules adopted by the Massachusetts Division of Health Care
Finance and Policy (DHCFP). For a description of the Rate Year 2012 PAPE, including PAPE-covered
services, please see the Final Notice of Agency Action referenced above. 

The Rate Year 2012 out-of-state acute outpatient hospital rate will be $280.18 per episode for
PAPE-covered services.  


Justification 

These changes simplify the acute hospital out-of-state inpatient claims payment process, reduces undue
administrative burden and assures timely and predictable payments to out-of-state acute hospitals.
All changes to hospital payment rates and methods are in accordance with state and federal law and are
within the range of reasonable payment levels to acute hospitals.   

Estimated Fiscal Effect 

EOHHS estimates that the changes in inpatient and outpatient rates described herein, will result in a
decrease in annual aggregate expenditures of approximately $3.3 million, which is the combination of a
$3.6 million decrease in out-of-state inpatient payments, and a $0.3 million increase in out-of-state
outpatient payments.

Statutory Authority:  M.G.L. c.118G; M.G.L. c.118E, 42 USC 1396a.

Related Regulations:  130 CMR 410, 415, 450; 42 CFR Parts 431and 447.