FH® Allowed Inpatient Facility DRG Launches in January

January 19, 2023

In January, FAIR Health is launching a new addition to our suite of FH® Allowed Benchmarks: FH® Allowed Inpatient Facility DRG. In addition, in February, allowed inpatient facility DRG data will be available in the latest release of another product, the FH® NSA Reference File.

FH Allowed Inpatient Facility DRG
FH Allowed Inpatient Facility DRG will offer insights into the allowed amounts—the amounts negotiated between insurers and providers participating in insurers’ healthcare networks—for services rendered in an inpatient hospital setting, payable by diagnosis-related groups (DRGs). The new product will provide benchmark percentile values based on allowed amounts from FAIR Health’s private insurance claims data at the geozip level, a geographic area that typically corresponds to the first three digits of a zip code or groups of three-digit zip codes. FH Allowed Inpatient Facility DRG can be used for purposes such as informing in-network price negotiations and out-of-network payments.

FH Inpatient Facility DRG
FH Allowed Inpatient Facility DRG is a counterpart to an existing charge benchmark, FH® Inpatient Facility DRG. The data source for that product will be changing in April from the Centers for Medicare & Medicaid Services (CMS) MedPAR file to a combination of FAIR Health private insurance claims data and the traditional Medicare data we receive as a CMS-certified, national Qualified Entity. FH Inpatient Facility DRG also will be changing to presenting values for all 493 geozips, instead of the 18 Medicare regions currently represented. And it will use an actual and derived methodology to calculate benchmarks instead of a fully derived methodology.

FH NSA Reference File
The February release of the FH NSA Reference File will, for the first time, make available allowed inpatient facility DRG data, along with the data currently available—medical, HCPCS, anesthesia, outpatient facility and inpatient facility ICD procedure code/revenue code. For all these types of services, the FH NSA Reference File will provide median allowed amount benchmark values at various levels of geographic aggregation (e.g., Metropolitan Statistical Area, among others) to support organizations affected by the federal No Surprises Act (NSA).

The NSA applies to health plans in states that do not have a specific state law concerning surprise bills, and to self-insured health plans that are not covered by such state laws. The NSA requires plans to calculate patients’ cost-sharing responsibilities for certain surprise medical bills using the plan’s Qualifying Payment Amount (QPA). The QPA is the payor’s historic median contracted amount for each procedure code in each market and geographic area it covers. When payors have insufficient provider contracts to calculate the applicable median contract amount for a specific service, they must use an independent third-party database to calculate the QPA and determine the patient’s cost-sharing obligations. Plans can use FAIR Health data in the FH NSA Reference File to help calculate the QPA in these situations. In addition, the data may inform the plan’s selection of an initial payment amount to out-of-network providers, potentially reducing disputes and the need for arbitration. The data may also prove useful for all stakeholders in preparation for arbitration and dispute resolution.

FAIR Health President Robin Gelburd stated: “FAIR Health seeks to develop new products and enhance existing ones in ways that serve healthcare stakeholders. In that spirit, we are pleased to introduce FH Allowed Inpatient Facility DRG and the enhanced version of the FH NSA Reference File.”

For more information, contact us by email at info@fairhealth.org or call us at 855-301-FAIR (3247), Monday through Friday, 9 am to 6 pm ET.