DRG Hierarchy and calculation of allowed amount

DRG Hierarchy for a Standard Base Agreement

Each inpatient case for a DRG contract is evaluated using the following payment hierarchy:

• Low Stay Outlier

• High Charge/High Stay Outlier

• DRG Value Inlier

Once a claim meets the criteria for a step in the hierarchy table, then the reimbursement calculation method is based on that applicable step. For example, if a case meets the qualification as a low stay case and a high charge case, it will be reimbursed based on the low stay allowance.

Note: The hierarchy for a hospital that provides tertiary services is different from the hierarchy list above.

Calculating the Inpatient Allowed Amount

Amounts displayed for example purposes only. These examples illustrate allowed amount calculations, not the Florida Blue payment because member deductible, coinsurance, and/or copayment liability have not been applied.

Determination of the allowed amount for inpatient and outpatient services is made based upon the terms of your Agreement.

DRG Examples

The following examples illustrate the various methods for determining the allowed amount for inpatient admissions.

Use the following “case” for the calculations:

• DRG = DRG 202 Bronchitis and Asthma, with complication or major complication

• Conversion Price = $3,000

• Low (Length of Stay) Trim Point = 2 days*

• High (Length of Stay) Trim Point = 12 days*

• Contracted Negotiated Low Stay Per Diem = $750

• Contracted Negotiated High Stay Per Diem = $800

• Relative Weight = 0.8446

• DRG Value = $2,534 (Conversion Price x Relative Weight)

*Trim point is a numerical value that represents the minimum (in the case of the low trim point) and the maximum (in the case of the high trim point) number of days for which payment will be made at the DRG value for hospital services. Length of Stay Examples

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