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Inpatient Payment Methodology Outpatient Payment Methodology

The All Patient Refined-Diagnostic Related Group (APR DRG) inpatient payment methodology was implemented for claims with a date of admission on and after January 1, 2015. DRG pricing now applies to acute care hospital inpatient claims with the exception of chronic disease hospitals, psychiatric hospitals and free-standing birth centers.

Providers should reference all materials surrounding this inpatient payment methodology including Frequently Asked Questions (FAQs), Bulletins, and Important Messages. Providers should also continue to visit this Web page for detailed information and continuous updates regarding APR DRG and the upcoming changes to the outpatient payment methodology.

Please continue to email questions or concerns in reference to the modernization of the Hospital reimbursement system to

Hospital Modernization Overview
The Connecticut Department of Social Services (DSS) is committed to the modernization of the hospital reimbursement system. The first step of the modernization process was completed. The Connecticut Medical Assistance Program (CMAP) has moved the inpatient hospital reimbursement from the previous model of interim per diem rates and case rate settlements to a Diagnosis Related Group (DRG) system where hospital payments are established prospectively effective with dates of admission on or after January 1, 2015.

This will be followed by updating the outpatient payment methodology. DSS will move from the current system of reimbursement based on Revenue Center Codes [some paid based on fixed fees, some based on a ratio of costs to charges] to an Outpatient Prospective Payment System (OPPS) based on the complexity of services similar to Medicare. This implementation is targeted for July 1, 2016.

The goals of moving to an OPPS for hospital providers is administrative simplification though aligning more closely with Medicare, greater accuracy in matching reimbursement amounts to relative cost and complexity and equity and consistency of payments among providers while maintaining access to quality care.

This Hospital Modernization Web page had been developed for providers to refer to for the latest updates, Important Messages, Frequently Asked Questions (FAQs), the DRG calculator, Addendum B and contact information should providers have additional questions. Providers are also encouraged to check the DSS Reimbursement Home Page under "DSS Links" for more information.

Hospital Inpatient Payment Methodology - Diagnosis Related Group (DRG)
Inpatient hospital reimbursement for general acute care hospitals and children’s hospitals is now using APR DRG system where hospital payments will be established prospectively for inpatient stays

Gainwell Technologies integrated 3M's APR DRG "grouper" software into the Medicaid Management Information Systems (MMIS). Each inpatient claim is assigned an APR DRG by utilizing claim data submitted such as diagnoses, procedures, member age, and gender.

DRGs will aid in DSS goals to move towards a system that encourages access to care, rewards efficiency, improves transparency, and improves equity by paying similarly across hospitals for similar care. Payment by DRGs also simplifies the payment process, encourages administrative efficiency, and bases payment on patient acuity and hospital resources rather than length of stay.

See the following for more detailed information:

Interim Billing
3-Day Rule: Outpatient Services Prior to Inpatient Admission
Claims Paid Per Diem Rates
Health Care Acquired Condition (HCAC) / Present on Admission (POA)
Hospital Based Practitioners - Inpatient Services

Hospital Outpatient Payment Methodology - Ambulatory Payment Classification (APC)
DSS will move from the current system of hospital outpatient payment methodology based on Revenue Center Codes (some paid based on fixed fees, some based on a ratio of costs to charges) to a prospective payment system based on the complexity of services performed. This change is scheduled for July 1, 2016.

Outpatient Hospital Modernization FAQ
Hospital Based Practitioners - Outpatient Services

CMAP Addendum B
CT Medicaid’s OPPS processing will be based on the CMAP version of Addendum B which is derived from Medicare’s Addendum B. The differences between the CMAP version of Addendum B and the Medicare version of Addendum B primarily involve detail service coverage and pricing methodology. Please refer to CMAP’s draft Addendum B to determine which services will be paid based on fixed fee, fee schedule or APC assignment. Also, background information for CMAP Addendum B can be found on the Connecticut Department of Social Services Reimbursement Modernization web site at:

CMAP Addendum B

CMAP Addendum B Changes and Historical Versions

Provider Type and Specialty to Revenue Center Code Crosswalk
With the implementation of OPPS, hospitals will no longer need to complete and submit the Revenue Center Request Form (W-1504). All general acute care hospitals, psychiatric hospitals and chronic disease hospitals will have access to all appropriate payable RCCs as limited by their scopes of practice and Department policy. Please note: RCC exceptions are based on DSS policy and restrictions. Please refer to the Provider Type and Specialty to RCC Crosswalk to determine which RCC are payable for your scopes of practice.
Provider Type and Specialty to Revenue Center Code Crosswalk

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