B&A Assisted the Department (under subcontract to Mercer) in investigating replacing its tiered inpatient reimbursement system with an APR-DRG system. Technical activities include: building a hospital features file; conducting preliminary edits on claims and cost data; initiating a hospital-specific claim and cost validation process; costing and grouping claims; developing relative weights and analyzing outliers. Ultimately, the Department opted to implement APR-DRG only for NICU-related cases. This rate development is ongoing and includes all of the tasks above as well as monthly data and policy meetings with the hospital association. Implementation activities will include: assisting in developing the SPA; identifying and testing changes to the MMIS; preparing state and hospital level impact analyses; and negotiating with CMS.