PPS Pricer Program

(Rev. 1, 10-01-03) A3-3615.3, A3-3656.3

The CMS provides a Pricer program to determine the price upon which to base payment under prospective payment. A separate Pricer installation guide is provided. The A/B MAC (A) uses the Pricer appropriate for the date of discharge. 

After GROUPER determines the DRG, the A/B MAC (A) 's system calls the Pricer program. Pricer determines the price to pay and prepares a report. 

Four data files are included. CMS maintains three: 

• DRGX file - contains DRG weights, average length of stay and outlier cutoff points. 

• MSAX file - contains urban and rural wage indexes used in calculating payment. CMS may request that the A/B MAC (A) make interim changes to this file when index changes are issued for individual hospitals after issuance of Pricer for the period. 

• RATE file - contains census division values and updating amounts used in calculating payment.

The A/B MAC (A) maintains the provider-specific file, (PROV file). This contains information about the facts specific to the provider that affect computations, e.g., effective dates for PPS, type of provider (for application of special computation rules), census division, MSA, adjusted cost per discharge, disproportionate share adjustment percentage, and capital data. 

Pricer also calculates the disproportionate share adjustment and adds it to the DRG payment. Correct calculation depends upon the accuracy of related information the A/B MAC (A) includes in the PRICER PROV file. 

The Pricer program applies the DRG relative weights, hospital urban or rural and census division location, provider-specific data, and beneficiary hospital data from the bill to determine the amount payable for each PPS discharge bill. 

Pricer uses the Intern-to-Bed ratio in calculating the indirect teaching adjustment for operating costs for the A/B MAC (A) to accumulate and use in related payments. Pricer uses the intern-to-average daily census ratio to calculate the indirect teaching adjustment for capital costs. The A/B MAC (A) ensures that these ratios are available for Pricer to compute payment for teaching hospitals. It includes the ratios in its PROV file to ensure that cost outliers are not overpaid to its teaching hospitals. 

Pricer does not calculate utilization days required for the PS&R, CWF, or cost report. It does not determine the amount to pay after deduction for deductible, coinsurance, or the primary payment where Medicare is secondary. The A/B MAC (A) must calculate the price and make adjustments to the price furnished before making payment 

The A/B MACs (A) use the Pricer implementation guide for information concerning Pricer processing reports, input parameters and data requirements.