Re: Budget Reduction Clarification - Cesarean and Vaginal Delivery Reimbursement

10 Cadillac Drive, Suite 200

Brentwood, TN 37027

[Date]

«Facility Name» «Contact Name» «Address» «City», «State» «Zip»

Dear [Contact Name]:

The purpose of this letter is to alert you to the nature and impact of the changes to Cesarean and vaginal delivery reimbursement enacted by the Tennessee General Assembly in budget years 2012 and 2013. This letter also will provide you with notice of potential claims adjustments that may result due to these changes.

The collective and net effect of the changes for both years is set forth and explained in a memorandum issued by the Bureau of TennCare to Managed Care Organizations (MCOs) on November 21, 2012. This memorandum is attached. Please read and review it carefully.

To summarize, in the 2012 Budget, the legislature directed MCOs to increase vaginal delivery rates by up to 17% and to pay the same rate for Cesarean and vaginal deliveries, effective July 1, 2011. Then, in the 2013 Budget, the legislature directed MCOs to decrease the reimbursement rates for Cesarean and vaginal deliveries by up to 7% (7 points), effective July 1, 2012, such that the resulting rates should not be more than an effective 10% increase to the rates in effect prior to July 1, 2011, and required Cesarean and vaginal delivery reimbursement rates to be the same.

Also attached to this letter is a Facility Delivery Reimbursement Exhibit (FDRE), which documents the rates for your facility effective July 1, 2011 and July 1, 2012 and is consistent with the legislation and direction from the Bureau of TennCare. UnitedHealthcare Community Plan is configuring the above FDRE changes for your facility, which may result in claims adjustments. Any applicable claim adjustment processing will begin on June 3, 2013.

For questions regarding this communication or the FDRE, please call 615-372-3509 and ask to speak to your Network Account Manager.

Sincerely,

Christopher A. Parrillo

Vice President, Network Management

cc: UHCCP contract file

RVP_Fac_OB_Reg_Notice_02152013 Facility Delivery Reimbursement Exhibit

[FACILITY NAME] [Effective For Dates of Service From DATE through DATE or Effective for Dates of Service on or After DATE]

DELIVERY TYPE PAYMENT METHOD CONTRACT RATE

Obstetrics (Mother only, Covered Services rendered to a mother and her newborn child will be paid as separate Admissions)

Vaginal Delivery or Cesarean Section Delivery [@ (see note # below)]

[Per Diem, Per Diem up to X [$XXXX, $XXXX, $XXXX MS-DRG 774:VAGINAL DELIVERY W COMPLICATING DIAGNOSES day(s). Per Diem beginning on day Per Case, $YYYY Per Diem] X, Per Case, Per Case up to X days. Per Diem beginning on day X]

MS-DRG 775: VAGINAL DELIVERY W/O COMPLICATING [Per Diem, Per Diem up to X [$XXXX, $XXXX, $XXXX DIAGNOSES day(s). Per Diem beginning on day Per Case, $YYYY Per Diem] X, Per Case, Per Case up to X days. Per Diem beginning on day X]

MS-DRG 765: CESAREAN SECTION W CC/MCC [Per Diem, Per Diem up to X [$XXXX, $XXXX, $XXXX day(s). Per Diem beginning on day Per Case, $YYYY Per Diem] X, Per Case, Per Case up to X days. Per Diem beginning on day X] MS-DRG:766: CESAREAN SECTION W/O CC/MCC [Per Diem, Per Diem up to X [$XXXX, $XXXX, $XXXX [@ 2 day stay case rate w/ Per Diem for additional days] day(s). Per Diem beginning on day Per Case, $YYYY Per Diem] X, Per Case, Per Case up to X days. Per Diem beginning on day X] Vaginal Delivery [# (see note # below)] [Per Diem, Per Diem up to X [$XXXX, $XXXX, $XXXX Per Case, $YYYY Per Diem] MS-DRG 767: VAGINAL DELIVERY W STERILIZATION &/OR D&C day(s). Per Diem beginning on day X, Per Case, Per Case up to X days. Per Diem beginning on day X] MS-DRG 768: VAGINAL DELIVERY W O.R. PROC EXCEPT STERIL [Per Diem, Per Diem up to X [$XXXX, $XXXX, $XXXX &/OR D&C day(s). Per Diem beginning on day Per Case, $YYYY Per Diem] X, Per Case, Per Case up to X days. [# 4 day stay case rate w/ Per Diem for additional days] Per Diem beginning on day X]

RVP_Fac_OB_Reg_Notice_02152013 STATE OF TENNESSEE DEPARTMENT OF FINANCE AND ADMINISTRATION DIVISION OF HEALTH CARE FINANCE AND ADMINISTRATION BUREAU OF TENNCARE 310 GREAT CIRCLE ROAD NASHVILLE, TENNESSEE 37243

MEMORANDUM

DATE: November 21, 2012

TO: TennCare Managed Care Organizations

FROM: Keith Gaither, Director of Managed Care Operations

SUBJECT: Budget Reduction Clarification

In accordance with the legislation that enacted the 2012 Budget, MCOs were required to implement a new policy regarding Cesarean and Vaginal Delivery Reimbursement.

The 2013 Budget passed by the General Assembly included reductions that affect the Cesarean and Vaginal Delivery Reimbursement policy.

This memo clarified the reimbursement changes made to Cesarean and Vaginal Delivery Reimbursement effective July 1, 2012.

Cesarean and Vaginal Delivery Reimbursement Effective July 1, 2011 Effective July 1, 2012 Cesarean and vaginal deliveries will be reimbursed Cesarean and vaginal deliveries are reimbursed at at the same rate effective July 1, 2011. MCOs are the same rate. MCOs pay the current vaginal directed to increase their vaginal delivery rates by delivery rate for corresponding C-Section 17%. Additionally, MCOs are to pay the vaginal deliveries. MCOs are directed to decrease their delivery rate for corresponding C-Section vaginal and corresponding C-Section delivery rate deliveries. by 7% points effective July 1, 2012. This should result in an effective 10% increase from the rates paid before July 1, 2011.

RVP_Fac_OB_Reg_Notice_02152013 Vaginal to Cesarean CPT Crosswalk

Description Vaginal CPT Code Cesarean CPT Code Global OB Care 59400 59510 Delivery Only 59409 59514 Delivery and 59410 59515 Postpartum VBAC 59610 N/A VBAC Delivery Only 59612 59620 VBAC Delivery and 59614 59622 Postpartum Routine OB Care 59400 59618

Vaginal to Cesarean DRG Crosswalk

Vaginal Code Description Corresponding Description Cesarean Code 774 Vaginal Delivery w Complicating 765 Cesarean with CC/MCC Diagnosis 775 Vaginal Delivery w/o 766 Cesarean w/o CC/MCC Complicating Diagnosis

RVP_Fac_OB_Reg_Notice_02152013