The following examples illustrate the per diem methods for determining payment for inpatient admissions:
Payment
Example
Payment Scenario
How to Calculate
Per Diem
Total Charges $10,400
Per Diem x Length of Stay = Allowed Amount
($900 x 3) + ($650 x 4) = $5,300
Allowance = $5,300
Revenue Code 200
Length of Stay 3 days
Per Diem $900
Revenue Code 120
Length of Stay 4 days
Per Diem $650
Catastrophic (First
Dollar)
Total Charges $135,000
Catastrophic Threshold
$100,000
Revenue Code 120
Length of Stay 5 days
Per Diem $765
Revenue Code 200
Length of Stay 20 days
Per Diem $1,200
Catastrophic Payment
Percent 39%
Non-covered Services $200
Determine if the covered charges are greater
than the Catastrophic Threshold.Total
Charges – Non-covered Services = Covered
Charges($135,000 - $200) =
$134,800$134,800 > $100,000
Covered Charges x Catastrophic Payment
Percent = Allowance($135,000 - $200) x .39
= $52,572Allowance =$52,572
Payment
Example
Case Rate
(Cardiac)
Payment Scenario
How to Calculate
DRG 218
Multiply additional days by the per diem
amount
12 x $800 = $9,600
Total Charges $80,000
Catastrophic Threshold
$100,000
Length of Stay 20 days
(Admission date 03/1/10,
Discharge date 03/20/10)
Days 1-8 Length of Stay
$15,500 Fixed Case Rate
Days 9 and Beyond Length of
Stay $800 Med/Surg Per
Diem
Non-covered = $200
Add the sum in the previous step to the Fixed
Case Rate
$9,600 + $15,500 = $25,100
Allowance = $25,100
Payment Example
Payment Scenario
How to Calculate
Second Dollar
Catastrophic with
an Implant
DRG 218
Determine if the adjusted total covered
charges exceed the catastrophic threshold.
Length of Stay 10 days
8 ICU days
2 Med/Surg days
ICU rate $1000
Med/Surg rate $850
DRG 104 Days 1-8 Length of
Stay $18,000 Fixed Case
Rate
Additional days at the
Med/Surg rate
An adjusted total covered charge does not
include the implant charges since they are
reimbursed in addition to inliers and outliers.
$90,000 - $15,000 = $75,000
$75,000 > $60,000
Determine the inlier allowance. For this
example, the case rate of:
$18,000 + (2 x 850) = $18,000 + $1,700 =
$19,700
Determine the implant allowance.
Implant billed charges x Negotiated Implant
Percent of charges
$15,000 x 50% = $7,500
Total Charges $90,000
Total Implant Charges
$15,000
Negotiated Threshold
$60,000
Negotiated Catastrophic
Percent 45%
Negotiated Implant Percent
50%
Determine the applicable catastrophic
reimbursement. In this case, take the total
adjusted charges – the negotiated charge
threshold and multiply the difference by the
catastrophic percent.
[($90,000 - $15,000) - $60,000] x 45% =
$15,000 x 45% = $6,750
Add the inlier amount, the implant amount
and the catastrophic amount together for the
total claim allowance. $19,700 + $7,500 +
$6,750 = $33,950
Payment Example
Payment Scenario
How to Calculate
First Dollar
Catastrophic with
an Implant
DRG 218
Determine if the adjusted total covered
charges exceed the catastrophic threshold.
$90,000 - $15,000 = $75,000
$75,000 > $60,000
Length of Stay 10 days
8 ICU days
2 Med/Surg days
ICU rate $1000
Determine the implant allowance.
Implant billed charges x Negotiated Implant
Percent
$15,000 x 50% = $7,500
Med/Surg rate $850
DRG 104 Days 1-8 Length of
Stay $18,000 Fixed Case
Rate
Additional days at the
Med/Surg rate
Total Charges $90,000
Total Implant Charges
$15,000
Negotiated Threshold
$60,000
Negotiated Catastrophic
Percent 45%
Negotiated Implant Percent
50%
Determine the applicable catastrophic
reimbursement. In this case, take the total
adjusted charges and multiply by the
catastrophic percent.
$75,000 x 45% = $33,750
Add the catastrophic payment amount and
the implant amount together for the total
claim allowance.
$33,750 + $7,500 = $41,250