Montana Administrative Register Notice 37-509 No. 12   06/24/2010    
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BEFORE THE Department of Public

health and human services of the



In the matter of the amendment of ARM 37.85.212 pertaining to the resource based relative value scale (RBRVS)






TO:  All Concerned Persons


1.  On April 29, 2010, the Department of Public Health and Human Services published MAR Notice No. 37-509 pertaining to the public hearing on the proposed amendment of the above-stated rule at page 1030 of the 2010 Montana Administrative Register, Issue Number 8.


2.  The department has amended the following rule as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:


            37.85.212  RESOURCE BASED RELATIVE VALUE SCALE (RBRVS) REIMBURSEMENT FOR SPECIFIED PROVIDER TYPES  (1)  For purposes of this rule, the following definitions apply:

            (a) through (b)(ii) remain as proposed.

            (iii)  mental health services, which applies to the following health care professionals listed in (2):  licensed psychologists, licensed clinical social workers, and licensed professional counselors.  The conversion factor for mental health services for state fiscal year 2011 is $24.26 $25.45; and

            (iv) through (14) remain as proposed.


AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA


3.  The department has thoroughly considered the comments and testimony received.  A summary of the comments received and the department's responses are as follows:


COMMENT #1:  MHA, an Association of Montana Health Care Providers, commented against maintaining physician rates in state fiscal year (SFY) 2011 at the SFY 2010 level.  It asserts the 60th Montana Legislature, meeting in 2007, mandated future, annual increases in the rate Montana Medicaid pays physicians regardless of future sessions' appropriations or actual state revenue collected. 


The MHA commented that ". . . the Medicaid program has severely underpaid physicians, which . . . discouraged physicians from taking additional Medicaid beneficiaries into their practices."  As a result, MHA comments, Medicaid beneficiaries cannot access primary care; instead they access hospital emergency departments, which is the most expensive place to provide these services.


The MHA commented that the proper course of action is to debate this issue when the Legislature reconvenes but the department should implement a 6% Medicaid physician payment rate increase now.


COMMENT #2:  The Billings Clinic commented against maintaining physician rates in SFY 2011 at the SFY 2010 level.  Like the MHA, it also asserts legislation passed by the 2007 Legislature (Senate Bill 354 (SB 354) 2007 Laws of Montana, Chapter 505, codified at 53-6-124, 53-6,125, 53-6,126, and 53-6-127, MCA) intended a gradual increase in physician rates to equal those paid under commercial insurance.  The Billings Clinic comments that the purpose of SB 354 was to secure and enhance access to physician services for Medicaid clients by removing a financial barrier to physician participation in Medicaid.  "Access to primary and preventive medical services reduces avoidable, more costly use of emergency departments therefore Montana Medicaid should set rates that ensure Montana physicians are willing to see Medicaid patients."  Not implementing the scheduled 6% physician rate increase, undermines the long-term goal of all Montanans having access to affordable coverage.


Billings Clinic commented that it provides physician, hospital, and long-term care services in Billings and regional Montana clinics.  It is a major Medicaid provider and Medicaid is an important payer.  Failure to enact the scheduled physician rate increase will create additional financial burden for Billings Clinic and access problems for its patients.  It continues to look for ways to reduce costs without compromising quality and patient safety standards and urges the department to amend the proposed rule to provide a rate increase for physicians and other medical providers.


COMMENT #3:  Legislative Counsel commented as rule reviewer for the Children, Family, Health, and Human Services Interim Committee against maintaining physician rates in SFY 2011 at the SFY 2010 level.  Its position is that the 2007 Legislature could require a 6% increase in the conversion factor used to calculate physician reimbursement rates for FY 2011, 2012, and 2013 regardless of actual revenue currently collected.  "Given the clear statutory requirement that a 6% increase in the conversion factor (for physicians) is required, it seems impermissible to lower the increase below the 6% floor for FY 2011, 2012, or 2013.  If the department desires to lower the conversion factor, it must do so legislatively.  The executive branch is not allowed to lower the 6% floor using 17-7-140, MCA."


RESPONSE #1, #2, and #3:  The department appreciates the effort and expertise of the commenters.  It agrees that Medicaid programs must consider Medicaid clients' access to services and must set reimbursement rates high enough that health care providers, including primary care providers, have an economic incentive to accept Medicaid patients.


The department does not agree that Montana Medicaid patients cannot access primary care in Montana because of Medicaid's reimbursement rates.  The department reviewed utilization data prior to setting the rates in this rule and concluded that Montana Medicaid's primary care reimbursement rates and its client access rates compare favorably with other public health plans in Montana.  Montana Medicaid also has implemented several programs including PASSPORT, utilization (bed fee) tax, provider based clinics and health improvement programs in efforts to reduce the improper usage of health care services and provide incentives for health improvement and appropriate primary care.


The department also does not agree with the commenters that it is statutorily mandated to increase the rate the state of Montana pays physicians for services to Montana Medicaid clients without regard to the state's projected general fund budget deficits.  The Legislature also enacted 17-7-140, MCA, which states "the governor shall ensure that the expenditure of appropriations does not exceed available revenue."


The Legislature is bound by Article VIII, Section 9 (Mt. Const.) "Balanced budget. Appropriations by the Legislature shall not exceed anticipated revenue."  The 2007 Legislature cannot compel spending in SFY 2011.  The department does not agree that the Montana Legislature mandated that physicians would receive rate increases regardless of the impact on other providers.  There is nothing in 53-6-125, 53-6-126, and 53-6-127, MCA to support increasing physicians' rates by decreasing the rates paid to all other Medicaid providers, which would be the result of holding spending at the SFY 2010 level while increasing physician reimbursement rates.


Despite the state's revenue shortfall, the department is attempting to hold all Medicaid providers' reimbursement rates constant at SFY 2010 levels.  It is setting SFY 2011 rates at a level it hopes will avoid decreases in any provider groups' rates in SFY 2011. 


The department does not agree with the commenters that the 2007 Legislature mandated an increase in physician rates in SFY 2011 regardless of actual revenues or the impact of the rate increase on other Medicaid programs and providers.  If that were the case, physician provider rates would be listed in 17-7-140(2), MCA.  This list does not include Medicaid provider rates paid to physicians as spending that may not be directed by the Governor.


The Legislature appropriates the Montana Medicaid budget but it does not set the rates Montana Medicaid pays its providers.  The Legislature has unequivocally delegated to the department the responsibility for setting provider rates.  See 53-6-101(8) and 53-6-113(3), MCA.  The department does not take lightly its statutory authority to set Medicaid provider rates, including physician rates, at the SFY 2010 level.  The department recognizes the contribution Medicaid providers make to quality health care and agrees with the commenters that access to physicians, in particular primary care physicians, is important for Medicaid clients.  Montana has a history of attempting to maintain rates at a level that maintains access. 


Montana Medicaid's reimbursement rates compare favorably to Medicare rates according to the Urban Institute's 2008 Medicaid Physician Survey.  That organization's research shows Montana Medicaid average fee for all services is 3% more than the average fee for Medicare.  The Urban Institute's survey also shows that Montana Medicaid rates compare favorably to other states' Medicaid rates.  Montana's rates are approximately 33% higher than the U.S. average for state Medicaid rates.


COMMENT #4:  The department commented that due to relative value unit (RVU) decreases specific to mental health services using the SFY 2010 conversion factor would reduce reimbursement rates to a level below SFY 2010 levels.  As stated in the proposed amendment, the department is maintaining all provider reimbursement rates at the SFY 2010 level.  The department did not know the impact of the RVU changes until after the proposed notice was published.


RESPONSE #4:  The department will increase the conversion factor for mental health services to $25.45 to maintain reimbursement at the SFY 2010 appropriated level. 


            4.  The department intends for the adoption and amendment of these rules to be effective July 1, 2010.



/s/  Geralyn Driscoll                                       /s/  Anna Whiting Sorrell                              

Rule Reviewer                                               Anna Whiting Sorrell, Director

                                                                        Public Health and Human Services



Certified to the Secretary of State June 14, 2010.


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