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Montana Administrative Register Notice 37-572 No. 2   01/26/2012    
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BEFORE THE DEPARTMENT OF PUBLIC

HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

 

In the matter of the amendment of ARM 37.86.2803, 37.86.2907, 37.86.2918, and 37.86.2925 pertaining to Medicaid inpatient hospital services

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO:  All Concerned Persons

 

            1.  On February 15, 2012, at 9:30 a.m., the Department of Public Health and Human Services will hold a public hearing in Room 207 of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed 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 February 8, 2012, 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 dphhslegal@mt.gov.

 

3.  The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

            37.86.2803  ALL HOSPITAL REIMBURSEMENT, COST REPORTING

            (1)  Allowable costs will be determined in accordance with generally accepted accounting principles as defined by the American Institute of Certified Public Accountants.  Such definition of allowable costs is further defined in accordance with the Medicare Provider Reimbursement Manual, CMS Publication 15 Transmittal 21 last updated January 2010, subject to the exceptions and limitations provided in the department's administrative rules.

            (a)  The department adopts and incorporates by reference Pub. CMS Publication 15, which is a manual published by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), which provides guidelines and policies to implement Medicare regulations which set forth principles for determining the reasonable cost of provider services furnished under the Health Insurance for Aged Act of 1965, as amended.  A copy of Pub. CMS Publication 15 may be obtained through the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT  59620-2951.

            (b)  For cost report periods occurring on or after May 1, 2010, such definition of allowable costs is further defined in accordance with the Medicare Provider Reimbursement Manual, CMS Publication 15, Form 2552-10, Transmittal 2, last updated August 2011, subject to the exceptions and limitations provided in the department's administrative rules.

            (c)  For cost report periods occurring prior to May 1, 2010, such definition of allowable costs is further defined in accordance with the Medicare Provider Reimbursement Manual, CMS Publication 15, Form 2552-96, Transmittal 25, last updated April 2011, subject to the exceptions and limitations provided in the department's administrative rules.

            (a) (d)  For cost report periods ending on or after January 1, 2006, for each hospital which is a critical access hospital, as defined in ARM 37.86.2901, reimbursement for reasonable costs of inpatient and outpatient hospital services shall be limited to 101% of allowable costs, as determined in accordance with (1).

            (2) and (3) remain the same.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:     53-2-201, 53-6-101, 53-6-111, 53-6-113, 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, tThe 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) through (1)(b) remain 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 August 1, 2011 April 1, 2012 the average base price, including capital expenses, is $4,129 $4,630.  Disproportionate share payments are not included in this price.

            (i)  The average base price for Center of Excellence hospitals, including capital expenses, is $6,890 $7,725.  Disproportionate share payments are not included in this price.

            (d) and (e) remain the same.

            (2)  The Montana Medicaid APR-DRG relative weight values, average national length of stay (ALOS), and outlier thresholds, and APR grouper version 29 are contained in the APR-DRG Table of Weights and Thresholds (effective July 1, 2010 April 1, 2012) published by the department.  The department adopts and incorporates by reference the APR-DRG Table of Weights and Thresholds (effective July 1, 2010 April 1, 2012).  Copies may be obtained from the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

 

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

 

            37.86.2918  INPATIENT HOSPITAL, READMISSIONS, PARTIAL ELIGIBILITY, OUTPATIENT BUNDLING, AND TRANSFERS FOR PROSPECTIVE PAYMENT SYSTEM (PPS) FACILITIES  (1) and (2) remain the same.

            (3)  Outpatient hospital services, including provider-based entity hospital outpatient services, emergency room services, and diagnostics services (including clinical diagnostic laboratory tests) that are provided by an entity owned or operated by the hospital and occur the day of or the day before the inpatient hospital admission are deemed to be inpatient services and must be bundled into the inpatient claim.

            (4) 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

 

            37.86.2925  INPATIENT HOSPITAL REIMBURSEMENT, DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS  (1) and (2) remain the same.

            (3)  Disproportionate share hospital payments, including routine disproportionate share hospital payments and supplemental disproportionate share hospital payments will be limited to the cap established by the federal Centers for Medicare and Medicaid Services (CMS) for the state of Montana.  The adjustment percentages specified in this rule shall be ratably reduced as determined necessary by the department to avoid exceeding the cap.

            (a)  The department will submit an independent certified audit to CMS for each completed Medicaid state plan rate year, consistent with 42 CFR Part 455, Subpart D.

                (b)  To the extent that audit findings demonstrate that DSH payments exceed the documented hospital-specific limits, the department will collect overpayments and redistribute DSH payments.

            (c)  Beginning with state fiscal year (SFY) 2011, based on audit findings, should the department determine that there is an overpayment to a provider, the department will:

            (i)  recover the overpayment from the provider;

            (ii)  redistribute the amount in overpayment to providers that had not exceeded the hospital-specific limit during the period in which the DSH payments were determined; and

            (iii)  ensure all payments will be subject to hospital-specific limits.

            (d)  Should the DSH overpayment exceed the aggregate hospital-specific limit, the federal amount of overpayment will be returned to the Center for Medicare and Medicaid Services (CMS).

            (e)  Beginning with SFY 2011, facilities choosing not to participate in the annual DSH audit will forfeit 100% of their DSH payment allocated for that year.  This allocation will be deemed an overpayment and will be recovered from the provider.

            (f)  Disproportionate share payments must not exceed the DSH state allotment, except as otherwise required by the Social Security Act.  In no event is the department obligated to use state Medicaid funds to pay more than the state Medicaid allotment of DSH payments due a provider.

            (4) 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

 

            4.  STATEMENT OF REASONABLE NECESSITY

 

The Department of Public Health and Human Services (the department) is proposing amendments to ARM 37.86.2803, 37.86.2907, 37.86.2918, and 37.86.2925 regarding Medicaid Inpatient Hospital Services.

 

The following describes the purpose and necessity of the proposed rule amendments pertaining to each rule:

 

ARM 37.86.2803

 

The CMS Publication 15 (Medicare Provider Reimbursement Manual) was updated to the current transmittal number and current effective date for cost reporting periods occurring prior to May 1, 2010, and for cost reporting periods occurring on or after May 1, 2010.  The proposed amendments to ARM 37.86.2803 are necessary to update two separate references to a federal publication regarding two distinct cost reporting periods.  It is necessary to refer to the most recent version of the publication to ensure that the department and providers are utilizing the most current federal standards and are in compliance with these requirements.

 

ARM 37.86.2907

 

In (1)(a) the department changes weights, thresholds, and grouper version number used to assign an All Patient Refined Diagnosis Related Group (APR-DRG) to each Medicaid client discharge in accordance with the current APR grouper.

 

In (1)(c) the department changes the Montana average base rate from $4,129 to $4,630.

 

In (1)(c)(i) the department changes the base rate for hospitals designated as Centers of Excellence from $6,890 to $7,725.

 

It is necessary for the department to change the date as to when the department will update the APR grouper.  The APR grouper is available in October of each year and will be updated by the department the following April.

 

The department finds it is necessary to change the hospital base rates which will offset the reduced weights that take effect with the implementation of the new APR grouper.

 

ARM 37.86.2918

 

Language was added to clarify that outpatient services provided by an entity owned or operated by the hospital and that occur the day of or the day prior to the inpatient hospital admission, must be bundled into a single inpatient claim.  It is necessary for the department to add this language to the rule to clarify to providers that these outpatient services are bundled into the inpatient claim and provide no additional payment to providers.

 

ARM 37.86.2925

 

Language was added to clarify how the department will collect Disproportionate Share Hospital (DSH) overpayments and redistribute DSH payments based upon audit findings.  It is necessary for the department to add this language to rule because DSH audits are required by CMS and such requirements are not enforceable unless they are promulgated as administrative rules.  The added language will clarify to providers how the department will collect any overpayments and address the redistribution of these overpayments.

 

FISCAL IMPACT

 

The proposed language in ARM 37.86.2907 regarding inpatient hospital base rates will increase these rates effective April 1, 2012.  Even though rate increases are proposed, these proposed increases will have a budget neutral effect on the Medicaid budget for SFY 2012.  For each APR-DRG, the department determines a relative weight using a national database.  These relative weights will be recentered to offset the proposed increase in base rates.  Because of this, there will not be any fiscal impact to the Medicaid budget.  The revisions in ARM 37.86.2803, 37.86.2918, and 37.86.2925 will also have no fiscal impact.  

 

The proposed changes will affect approximately 372 inpatient hospital providers both in and out of state.  Services provided to Medicaid clients will not be affected.

 

            5.  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 dphhslegal@mt.gov, and must be received no later than 5:00 p.m., February 23, 2012.

 

6.  The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.

 

7.  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 5 above or may be made by completing a request form at any rules hearing held by the department.

 

8.  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.

 

9.  The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

 

/s/ John Koch                                               /s/ Mary E. Dalton acting for                      

Rule Reviewer                                             Anna Whiting Sorrell, Director

                                                                      Public Health and Human Services

           

Certified to the Secretary of State January 17, 2012.

 

 

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