Medicaid Hospital Reimbursement


The Office of Reimbursement and Certificate of Need (CON) is responsible for establishing Medicaid reimbursement methodologies for inpatient services, outpatient hospital services, Disproportionate Share Hospital (DSH) payments and hospital supplemental payments. Reimbursement and CON is responsible for Medicaid State Plan Amendments that are necessary to obtain Federal matching funds.

Key Areas of Focus

  • Effective for admissions on or after January 1, 2015, Connecticut Medicaid, working with consultants at Mercer, Myers & Stauffer, and Hewlett Packard (HP), moved from an inpatient hospital reimbursement system based on interim per diem rates and cost settlement to a diagnosis-related group (DRG) system where hospital payments are established prospectively.
  • Effective for services provided on or after July 1, 2016, Connecticut Medicaid moved from an outpatient hospital reimbursement system based on Revenue Center Codes (some paid based on fixed fees, some based on a ratio of costs to charges) to an ambulatory payment classification (APC) prospective payment system based on the complexity of the services performed. Refer to the Reimbursement Modernization page for further information.
  • The Department received CMS approval to revise the user fee effective July 1, 2015, with the first payment due by October 31, 2015. The revised user fee is based on FFY 2013 total net patient revenues as reported to OHCA with the fee on both inpatient and outpatient revenues set at 6%. Hospitals deemed to be financially distressed are exempted from the fee on outpatient revenues. The user fee totals approximately $556 million annually to be paid on a quarterly basis.