(1) Routine disproportionate share hospitals (RDSH) shall receive an additional payment amount equal to the product of the hospital's prospective base rate times the adjustment percentage of:

(a) 4% for rural hospitals; or

(b) 5% for urban hospitals.

(2) Subject to federal approval and the availability of sufficient state special revenue, all supplemental disproportionate share hospitals shall receive a supplemental disproportionate share hospital payment. In order to maintain access and quality in the most rural areas in Montana, critical access hospitals and exempt hospitals shall receive an increased portion of the available funding. The supplemental disproportionate share hospital payment shall be calculated using the formula: SDSH=(M/D)*P.

(a) For the purposes of the determining supplemental disproportionate share hospital payment amounts, the following definitions apply:

(i) "SDSH" represents the calculated supplemental disproportionate share hospital amount.

(ii) "M" represents the number of weighted Medicaid paid inpatient days provided by the hospital for which the payment amount is being calculated.

(A) For critical access hospitals and exempt hospitals, weighted Medicaid inpatient days shall equal the number of Medicaid inpatient days provided multiplied by 3.8.

(B) For all other hospitals, weighted Medicaid inpatient days equals the number of Medicaid paid inpatient days provided.

(iii) "D" equals the total number of weighted Medicaid paid inpatient days provided by all supplemental disproportionate share hospitals in Montana.

(iv) "P" equals the unexpended, unencumbered disproportionate share hospital allotment for Montana, as determined by CMS according to section 1923 of the Social Security Act, remaining after routine disproportionate share hospital payments have been calculated according to (1), plus the state financial participation.

(v) The figures used in (2)(a)(ii) and (iii) must be from the department's paid claims data for the hospital's fiscal year that ended in the most recent calendar year that ended at least 12 months prior to the calculation of the HRA payments.

(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.

(4) Eligibility for routine disproportionate share hospital and supplemental disproportionate share hospital payments will be determined based on a provider's year-end reimbursement status.