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Workers’ Compensation Board

New York State
Workers' Compensation Board
328 State Street  Schenectady, New York 12305
Governor David A. Paterson

Subject No. 046-379

Hospital Inpatient and Ambulatory Surgery Fee
Schedules are Likely to Change

Date: December 2, 2009

The workers' compensation fee schedule for inpatient hospital care automatically tracks New York Medicaid rates, as determined by the New York State Department of Health (DOH), with limited statutory modifications. New York Public Health Law § 2807-c (1)(b-1). Currently, Medicaid rates utilize a payment methodology based on a classification system known as All Patient Diagnosis-Related Groups (AP-DRG).

As a result of 2009 Medicaid reform legislation, the Department of Health is converting its classification system from AP-DRG to a new system known as All Patient Refined DRGs (APR-DRGs), which was developed by 3M and the National Association of Children's Hospitals and Research Institutes (NACHRI). The new APR-DRGs are built off of the AP-DRGs, but provide for adjustments based on severity. In connection with the migration to APR-DRG classifications, Medicaid has substantially changed its reimbursement formulas. In support of the new APR-DRGs, 3M Health Information Systems has created a grouper for use in identifying the appropriate APR-DRG and a pricer that calculates the reimbursement rate according to the new formulas. The pricer will produce rates according to the workers' compensation schedule.

The implementation of the new APR-DRG methodology is scheduled to be effective December 1, 2009. However, the DOH has not yet received federal approval of the new methodology, which is required for implementation. Once DOH receives formal approval, it is required to develop and issue an adjusted fee schedule that applies to workers' compensation treatment. Public Health Law § 2807(4).

More information about the APR-DRG system and links to the 3M website are available at Link to External Website. The WCB, along with DOH and 3M, is hosting an information session on the APR-DRG system by webinar on Thursday December 10, 2009 from 10 am – 12 pm EDT. To register, complete the form at There is no cost for this program.

I expect to issue another subject matter announcing the new rates once I receive the workers' compensation fee schedule from the DOH.

The workers' compensation ambulatory surgery fee schedule also follows Medicaid, though it is not by statute but rather by regulation. In December 2008, the Department of Health converted the ambulatory surgery reimbursement system from the Products of Ambulatory Surgery (PAS) system to a new Ambulatory Patient Groups (APG) system. At present, the workers' compensation fee schedule continues to be based on the PAS system, but the Board expects to migrate to an APG-based system in the near future. More information about the APG system and the 3M products that support it are available at: Link to External Website.


Robert E. Beloten