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Colorado Medicaid APR-DRG version 42 repricing shows notable payment shifts; draft tables due for stakeholder review
Summary
Department analysts told hospital stakeholders that APR-DRG version 42 repricing of Colorado claims shows widespread severity downgrades for many diagnosis groups, increased outlier payments and material dollar shifts; the department will post draft weight tables for review early next week.
Department analysts at the Colorado Department of Health Care Policy & Financing told hospital stakeholders that an analysis of APR-DRG version 42 shows substantial reweighting that could shift fee-for-service payments across multiple diagnostic groups.
Diana Lam, the department’s inpatient hospital rates analyst, said the department used state hospital claims from fiscal years 2024–25, grouped them with the vendor software, and repriced claims to isolate changes between version 40 and version 42. "There appear to be a significant number of severity of illness downgrades from version 40 to 42," Lam said, adding that many claims were reassigned to a lower severity level.
Why it matters: the repricing produced notable reductions in estimated payments for several major diagnostic categories (including respiratory and circulatory diseases, pregnancy and childbirth, infectious diseases, and multiple significant trauma) while certain high-acuity DRGs (transplant, ECMO, CAR-T–related DRGs) saw large weight increases. Lam cited a roughly $9.7 million change in the "pre MDC" line as an example of the scale of movement. She also said the analysis showed a higher amount of outlier payments under version 42.
Methodology and sample: Lam said the department excluded Medicare crossover claims, third-party liability claims, certain claims with pricing complexities, and 11 outlier claims with stays over 365 days; the final analytic sample was about 107,428 claims. The analysis carried forward the same policy adjustments used for version 40 to ensure comparability, and the team is treating the version update as budget neutral when presenting differentials.
Stakeholder review and timeline: Lam said the draft version 42 weight ("wait") table and supporting MDC/hospital-level differentials will be posted for hospital stakeholder review "very early next week" (the department's goal is Monday, with Tuesday the latest) and the team hopes to conclude the review by May 16. Lam asked stakeholders to subscribe to the engagement newsletter and to submit feedback via the department's contact email.
What the department asked of hospitals: Andrew Abelos, facility rate section manager, emphasized the need for feedback and said the department will keep version 42 issues on the stakeholder meeting agenda and accept written comments between meetings.
Next steps: the department will publish the draft tables for review and invited hospitals to examine the hospital- and system-level pages; stakeholders with questions were told to contact Lam or Abelos and to use the public review window to flag concerns before the team finalizes any operational changes.
