Critical Access Hospital (CAH) Services
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Throughout this section, “you” refers to a critical access hospital (CAH). A CAH is a hospital that is designated a CAH under Minnesota Statutes, section 144.1483.
Payment for outpatient, emergency and ambulatory surgery services you provide are made on a reasonable cost basis under the cost finding and allowable costs determined under the Medicare program according to Minnesota Statutes, section 256B.75 (b).
Outpatient Payments
Outpatient rate for each critical access hospital is determine by using the cost-to-charge ratios.
Payments Beginning with your Fiscal Year Ending in 2017
Beginning with your fiscal year ending (FYE) in 2017, outpatient payments will no longer be settled to actual costs. Instead, MHCP will determine a payment rate for each hospital using the cost-to-charge ratios from Worksheet C on each hospital’s As-Filed Medicare Cost Report. The elimination of cost settlements was codified in the 2015 legislative session. The formula for computing the cost-based payment was codified in the 2017 legislative session.
Effective for services delivered on or after the first day of the hospital's fiscal year ending in 2017, the rate for outpatient hospital services shall be computed using information from each hospital's Medicare cost report as filed with Medicare for the year that is two years before the year that the rate is being computed. Rates shall be computed using information from Worksheet C series. The outpatient rate will be the MHCP allowable charges multiplied by the result of the following calculation:
Costs and charges that are related to rural health clinics and federally qualified health centers are excluded from the rate calculation because these clinic services are reimbursed using an alternate method. These costs and charges were also excluded from the previous cost settlement payment method.
Legislatively mandated increases and reductions to the outpatient rate will continue to apply.
Critical Access Outpatient Billing
For CAH outpatient services, valid types of bills (TOBs) are 851, 852, 853, 854 and 857. TOB 131 is not valid for CAH outpatient billing.
Requirements for Healthcare Common Procedure Coding System (HCPCS) procedure coding and revenue code reporting follow Medicare guidelines. The following revenue codes require a HCPCS code:
Inpatient Payments
Payment for inpatient hospital services has moved to a tiered per diem payment.
Cost-Based Inpatient Payment Methodology for CAH
New hospital-specific per diem inpatient payment rates are now designed to pay a percentage of costs within these three reimbursement tiers:
The base year for payments from July 1, 2021, through June 30, 2023, is 2017 and 2018.
The per diem payment rates were inflated on July 1, 2022, using the Centers for Medicare & Medicaid Services (CMS) Inpatient Hospital Market Basket index.
Critical access hospitals are no longer eligible to receive disproportionate share hospital payment adjustments for discharges.
Inpatient payment rates were rebased on July 1, 2021. The base year for the July 1, 2017, per diem rates were 2017 and 2018. The July 1, 2021, per diem rates will be inflated on July 1, 2022, using the Centers for Medicare & Medicaid Services (CMS) Inpatient Hospital Market Basket Index.
The next scheduled rebasing is July 1, 2023.
Refer to the Payment methodology for critical access hospitals webpage for rate information.
If you admit a member as an inpatient from one of your outpatient departments (for example, emergency department, ambulatory surgical center, observation status whether or not a bed is used), you must include charges from the outpatient services in the inpatient hospital billing. The date of admission for your outpatient service is the actual admission date.
Professional Services
Bill for outpatient professional services using the 837P (professional) claim format. This claim format requirement does not affect Medicare crossover claims.
CRNA Services
Inpatient CRNA
Hospitals must exclude certified registered nurse anesthetist (CRNA) charges from inpatient rates.
Bill separately on the 837P for MHCP-enrolled CRNA services with one of the appropriate place of services 21, 25, 51, 52, or 61 by any of the following:
Refer to the MN–ITS User Guide for more detailed information on billing for CRNAs who are employees or independent CRNAs. Remove CRNA costs from the operating payment rate for inpatient rates.
Outpatient CRNA
The Medicare CRNA payment method may be different from the method you elected for inpatient services under MHCP. That is, you may have elected to remove CRNA costs from your MHCP inpatient rates under Minnesota Rules, part 9500.1105, subpart 1A(s), and have separate payment under the MHCP fee schedule.
You must bill outpatient CRNA services according to the Medicare guidelines. Bill outpatient CRNA services according to the following:
Outpatient CRNA Exemption Billing
Bill for cost-based CRNA services using the 837I format using revenue code 0964 and the appropriate HCPCS procedure code:
Outpatient CRNA Non-Exemption Billing
Bill for the services using the 837P format using the appropriate HCPCS codes:
Refer to the “MHCP Enrolled CRNA” subsection in the Anesthesia Services section of the provider manual for more information.
Exhausted Medicare Benefits
If you submit an MHCP inpatient claim because a member has exhausted Medicare Part A benefits but has Medicare Part B, use TOB 13X rather than 85X to submit for Medicare Part B payment. The Part B services will be paid as a Medicare crossover under Outpatient Prospective Payment System (OPPS) and offset against the MHCP inpatient payment.
Submit claims for exhausted Medicare benefits following the electronic claim attachments including the appropriate documentations Medicare Part A benefits are exhausted (“J” claims) instructions.
Home Health Services
Home health services you provide are not paid based on a reasonable-cost basis. Home health services continue to be paid under the MHCP fee schedule using TOB 34X. Refer to Health Care Homes (HCH) regarding services and billing.
Substance Use Disorder Services
Outpatient hospital services you bill under the Behavioral Health Fund (BHF) must use the appropriate Type of bill (TOB) 89X or 13X. Payment will be made according to BHF rates and not on the reasonable-cost basis. Refer to Substance Use Disorder (SUD) Services.
Ambulance Services
Ambulance services you provide or that an entity you own and operate provides are not paid on the reasonable-cost basis. Ambulance Transport Services continue to be paid under the MHCP fee schedule.
Definitions
Refer to the Definitions section of the Provider Manual’s Hospital Services home page.
Legal References
Minnesota Statutes, section 256B.75(b) (Hospital Outpatient Reimbursement)
Minnesota Rules, part 9500.1105, subpart 1A(s) (Basis of Payment for Inpatient Hospital Services)
Minnesota Statutes, 2014 section 256.969, subdivision 2b (Hospital Payment Rates)
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