BEFORE THE DEPARTMENT OF PUBLIC
HEALTH AND HUMAN SERVICES OF THE
STATE OF MONTANA
In the matter of the adoption of New Rule I and amendment of ARM 37.86.2801, 37.86.2901, and 37.86.2907 pertaining to Medicaid inpatient hospital services
NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION AND AMENDMENT
TO: All Concerned Persons
1. On June 15, 2011, at 9:00 a.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed adoption and amendment of the above-stated rules.
2. The Department of Public Health and Human Services will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact Department of Public Health and Human Services no later than 5:00 p.m. on June 6, 2011, to advise us of the nature of the accommodation that you need. Please contact Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; telephone (406) 444-4094; fax (406) 444-9744; or e-mail firstname.lastname@example.org.
3. The rule as proposed to be adopted provides as follows:
NEW RULE I GRADUATE MEDICAL EDUCATION PAYMENT PROGRAM (1) Subject to the availability of funding, restrictions imposed by federal law, and the approval of the state plan by the Centers for Medicare and Medicaid Services (CMS), the department will pay, in addition to the Medicaid payments provided for in ARM 37.86.2806, 37.86.2905, 37.86.2907, 37.86.2912, 37.86.2916, 37.86.2918, 37.86.2920, 37.86.2924, 37.86.2925, 37.86.2928, 37.86.2943, and 37.86.2947, a Graduate Medical Education (GME) payment for the purpose of partially funding a primary care residency program for eligible hospitals located in Montana.
(2) Revenue for the GME payment will be generated through a transfer of funds from the Montana University System to the Department of Public Health and Human Services through an Intergovernmental Transfer contract agreement. The transfer of funds from the University System will occur prior to July 31 of each year.
(3) The department will make an annual payment to each eligible hospital on or before August 31 of each year.
(a) The payment will be calculated based upon the eligible hospital's inpatient Medicaid utilization per year.
(b) If an eligible hospital reports no full time equivalents (FTE) participating in the GME program for any given program year or portion thereof, the eligible hospital will not receive payment for those time periods of nonparticipation.
(4) The GME payment regarding the primary care residency program must be computed, in order, as follows:
(a) divide the total Graduate Medical Education Full Time Equivalent (GMEFTE) count for each eligible facility based upon the most recently filed cost report by the Total Graduate Medical Education Full Time Equivalent (TGMEFTE) for all eligible facilities to determine the Hospital Percentage of Graduate Medical Education (HPGME);
GMEFTE = HPGME
(b) divide the Hospital Specific Medicaid Inpatient Days (HSMID) by the total Hospital Specific Inpatient Days (HSID) for eligible hospitals to compute the Facility Specific Medicaid Hospital Day Rate (FSMHDR);
HSMID = FSMHDR
(c) add together the Facility Specific Medicaid Hospital Day Rate (FSMHDR) for all eligible hospitals to determine a Total Medicaid Hospital Day Rate (TMHDR);
FSMHDR + FSMHDR + FSMHDR + FSMHDR = TMHDR
(d) divide each hospital's Facility Specific Medicaid Hospital Day Rate (FSMHDR) by the Total Medicaid Hospital Day Rate (TMHDR) to determine the Facility Specific Medicaid Utilization Rate (FSMUR);
FSMHDR = FSMUR
(e) divide the Hospital Specific Medicaid Inpatient Days (HSMID) by the Total Medicaid Inpatient Days (TMID) of all eligible hospitals to compute the Facility Share of Medicaid Utilization (FSMU);
HSMID = FSMU
(f) add the percentage of the Facility Share of Medicaid Utilization (FSMU) plus the Hospital Percentage of Graduate Medical Education (HPGME) divided by three to acquire the Average Medicaid Utilization (AMU) specific to each eligible hospital; and
FSMUR + FSMU + HPGME = AMU
(g) allocate funds to each eligible hospital based on the facility specific percentage of Average Medicaid Utilization (AMU) as described in (4)(f).
(5) The GME payment must comply with the following criteria:
(a) if the eligible hospital's cost of inpatient hospital services do not exceed the total Montana Medicaid allowed payments for inpatient care, the eligible hospital will receive a GME payment as calculated in (4);
(b) as-filed cost reports from eligible hospitals and information from the Medicaid paid claims database will be used for calculations;
(c) the GME payment must be for services derived from Medicaid paid claims. The dates of these services must occur within the eligible hospital's fiscal year end, and the hospital's fiscal year must be the year immediately prior to the payment date; and
(d) at the end of the contract period, the department will reconcile the total Medicaid payments including the Medicaid GME payments to ensure that the total of these payments do not exceed the Medicaid Upper Payment Limit (UPL) for the fiscal year.
AUTH: 2-4-201, 53-2-201, 53-6-113, MCA
IMP: 2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA
4. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:
37.86.2801 ALL HOSPITAL REIMBURSEMENT, GENERAL
(1) through (5) remain the same.
(6) The department or its designated review organization may approve a request for prior authorization when the service is medically necessary under any of the following conditions:
(a) the client travels to another state because the department finds the required inpatient services are not available in Montana, or it is determined by the department that it is general practice for clients in a particular locality to use inpatient resources in a border hospital, or an in-state qualified provider who could normally render the inpatient service but does not think they can adequately treat the client;
(b) there is a medical emergency and the recipient's health would be endangered if the client were required to travel to Montana to obtain the medical services;
(c) the client, or the client's representative, can demonstrate to the satisfaction of the department that medical services represent the least costly service and all other viable alternatives have been exhausted per medical standards of care; or
(d) the client is a child residing in another state for whom Montana makes adoption assistance or foster care maintenance payments.
AUTH: 2-4-201, 53-2-201, 53-6-113, MCA
IMP: 2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA
37.86.2901 INPATIENT HOSPITAL SERVICES, DEFINITIONS (1) through (20) remain the same.
(21) "Graduate medical education" (GME) means a postgraduate primary care residency program offered by an eligible in-state hospital for the purpose of providing formal hospital-based training and education under the supervision of a licensed medical physician.
(21) through (42) remain the same but are renumbered (22) through (43).
AUTH: 53-2-201, 53-6-113, MCA
IMP: 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, 53-6-149, MCA
37.86.2907 INPATIENT HOSPITAL PROSPECTIVE REIMBURSEMENT, APR-DRG PAYMENT RATE DETERMINATION (1) The department's APR-DRG prospective payment rate for inpatient hospital services is based on the classification of inpatient hospital discharges to APR-DRGs. The procedure for determining the APR-DRG prospective payment rate is as follows:
(a) Effective July 1st of each year, the department will assign an APR-DRG to each Medicaid client discharge in accordance with the current APR-grouper program version, as developed by 3M Health Information Systems. The assignment and reimbursement of each APR-DRG is based on:
(i) and (ii) remain the same.
(iii) all ICD-9-CM medical procedures performed during the
recipient's client's hospital stay;
recipient's client's age;
recipient's client's sex; and
recipient's client's discharge status .; and
(vii) diagnosis codes related to hospital-acquired conditions that are not present or undetermined to be present on admission.
(b) remains the same.
(c) The department computes a Montana average base price per case. This base price includes in-state and out-of-state distinct part rehabilitation units and long term care (LTC) facilities. Effective
July August 1, 2010 2011 the average base price, including capital expenses, is $4,235 $4,000. Disproportionate share payments are not included in this price.
(i) The average base price for Center of Excellence hospitals, including capital expenses, is
$7,024 $6,884. Disproportionate share payments are not included in this price.
(d) remains the same.
(e) For claims with dates of payment on or after August 1, 2011, when a hospital-acquired condition occurs during hospitalization and the condition was not present or undetermined to be present on admission, claims will be paid as though the diagnosis is not present or undetermined to be present. Hospital-acquired conditions refers to the Centers for Medicare and Medicaid Services (CMS) definition as provided in Section 1886(d)(4) of the Social Security Act.
(2) remains the same.
AUTH: 2-4-201, 53-2-201, 53-6-113, MCA
IMP: 2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA
5. STATEMENT OF REASONABLE NECESSITY:
The Department of Public Health and Human Services (the department) is proposing New Rule I and amendments to ARM 37.86.2801, 37.86.2901, and 37.86.2907 regarding Medicaid inpatient hospital services.
The purpose of the proposed rule amendments is to update the current administrative rules governing inpatient hospital services with 42 CFR 447.272, and to interface these rules with the inpatient hospital state plan.
The proposed amendments give notice that the department will be reducing the reimbursement rates to the identified Medicaid providers by up to 2% beginning on August 1, 2011. These provider rate changes are based on a provider rate increase that went into effect in Fiscal Year (FY) 2010, and was held constant in FY 2011. The 2010 provider rate increase was paid for with one-time-only funding appropriated by the 61st Legislative session meeting in 2009. This one-time-only funding was not included in the budget base for FY 2012 and the funds were not appropriated by the current 62nd Legislative session.
The department considered whether a rate decrease could cause a cost shift to a more expensive service. The department considered the impact of the rate changes on efficiency, economy, quality of care, and access to Medicaid services and concluded that the rates are still sufficient to meet the requirements of 42 USC 1396a (a) (30(A).
In evaluating the reductions needed to live within the legislative appropriation, the department considered the alternatives of eliminating covered services and/or decreasing Medicaid eligibility. The department is unable to decrease eligibility for services after March 23, 2010 and be in compliance with the Medicaid maintenance-of-effort (MOE) requirements of the Patient Protection and Affordable Care Act, PL 111-148, Title II, Sections 2001, et seq. Eliminating optional services was considered and rejected because of the impact on vulnerable Medicaid clients who would lose coverage for services.
New Rule I
The department proposes a general medical education program for the purpose of providing formal hospital-based training and education under the supervision of a licensed medical physician.
The department is proposing language to ARM 37.86.2801 to clarify prior authorization requirements for medically necessary requests for hospital service.
Under ARM 37.86.2901 (Inpatient Hospital Services, Definitions), for purposes of clarity, additional language was added to define the term "graduate medical education".
ARM 37.86.2907 establishes two base rates which provide the basis for reimbursement regarding prospective payment system (PPS) hospitals. These two rates include a Montana average base rate and an average base rate for hospitals meeting the criteria for Centers of Excellence. The primary reason for amending this rule is to establish these base rates for the coming state fiscal year.
The reduction in base rates will reduce the Medicaid budget for State Fiscal Year (SFY) 2012 by $2,885,671. This reduction removes the one-time-only monies appropriated by the 2009 Legislature.
The proposed changes will affect approximately 372 inpatient hospital providers both in and out of state.
Even though Medicaid base rates have been reduced, the proposed changes will not affect or reduce services provided to Medicaid clients. Therefore, there is no impact to clients.
6. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail email@example.com, and must be received no later than 5:00 p.m., June 23, 2011.
7. The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.
8. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 6 above or may be made by completing a request form at any rules hearing held by the department.
9. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.
10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.
/s/ John Koch /s/ Anna Whiting Sorrell
Rule Reviewer Anna Whiting Sorrell, Director
Public Health and Human Services
Certified to the Secretary of State May 16, 2011.