BEFORE THE Department of Public
health and human services of the
STATE OF MONTANA
TO: All Concerned Persons
1. On January 26, 2012, the Department of Public Health and Human Services published MAR Notice No. 37-572 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 173 of the 2012 Montana Administrative Register, Issue Number 2.
2. The department has amended the above-stated rules as proposed.
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: One commenter stated an interest in working with the department to examine the reasons for falling APR/DRG weights.
RESPONSE #1: On average, DRG weights have fallen which is why the department increased the hospital-based rates in order to compensate for these fallen DRG weights. The department recognizes and thanks the commenter for their interest in collaboratively researching decreasing APR/DRG weights.
COMMENT #2: Three comments were received regarding inpatient psychiatric care urging the department to consider a policy adjuster to ensure Medicaid payments for psychiatric services continues at a sustainable rate, and to better align Medicaid payments with existing service intensity.
An additional comment suggested the department may need to increase the children's mental health modifier to establish reasonable payment amounts.
RESPONSE #2: At this time, the department is not considering the implementation of a policy adjuster for adult mental health services, or an increase in the children's mental health policy adjustor which is presently set at 1.51 for children less than eighteen years of age. The department will continue to research existing service intensity, and continue to monitor the adjusted weights for mental health DRGs and the subsequent payments to providers.
COMMENT #3: Two comments were received regarding neonatal intensive care DRGs. Mentioned was the need for establishing a policy adjuster to offset a reduction in acute care reimbursement stating that the current fee schedule creates the perception of inequity by placing a disproportionate burden over acute care services.
One commenter expressed concern over the significant change in grouper logic particularly regarding low birth weight cases grouped to DRG 589.4.
An additional comment mentioned that the outlier threshold for DRG 589.4 was significantly over stated.
RESPONSE #3: At this time, the department is not considering increasing the current policy adjustor for neonate services. Currently, the department has a policy adjustor for neonate services which is set at 1.43. The department will continue to monitor the adjusted weights for neonate services and their corresponding DRGs and the subsequent payments to providers.
DRG 589.4 is for extremely premature babies who do not receive any major procedures and have high mortality rates. The severity of illness logic is unique to this DRG since no newborn intervention procedures are performed. These clients have an average length of stay of just one day, which is why there is a very low relative weight assigned to this DRG. Because of the reasons previously stated, these clients use less hospital resources which also contributes to the very low relative weight assigned to this DRG. At this time, the department is not considering changing the methodology for establishing cost outlier thresholds. Regarding DRG 589.4, the department does not anticipate a claim hitting an outlier payment for this DRG.
COMMENT #4: One comment was received regarding obstetrics and establishing a policy adjuster to offset the reduction in reimbursement for normal newborn and obstetric services.
RESPONSE #4: A this time, the department is not considering the implementation of a policy adjuster for obstetric services. Currently, the department has a policy adjuster for normal newborn services which is set at 1.36. The department will continue to monitor the adjusted weights for normal newborn and obstetric services and their corresponding DRGs and the subsequent payments to providers.
COMMENT #5: One comment was received recommending that the department continue to analyze claims data and consider additional modifications to assure that hospitals or service lines are not unfairly reduced from current spending levels.
An additional comment suggested that the department monitor the impact of the new fee schedule on a quarterly basis.
RESPONSE #5: The department agrees with the commenter and will continue to analyze data on an ongoing basis. Each year, the department must stay within the appropriation amount allocated by the Legislature which determines Medicaid spending levels. In-state hospitals will be able to recoup most unpaid costs through the distribution of the hospital utilization fee.
COMMENT #6: One comment indicated support of the department's proposed rule to recover DSH overpayments.
RESPONSE #6: The department thanks the commenter for their support of the rule.
4. These rule amendments are effective April 1, 2012.
/s/ John Koch /s/ Hank Hudson for
Rule Reviewer Anna Whiting Sorrell, Director
Public Health and Human Services
Certified to the Secretary of State March 12, 2012.