(1) The department will pay a qualified rate adjustment (QRA) payment to an eligible rural hospital in Montana for inpatient services or outpatient services or both when:
(a) the hospital's most recently reported costs are greater than the reimbursement received from Montana Medicaid;
(b) the hospital is county owned, county operated, or partially county funded, including tax district funding;
(c) county funds are transferred directly to the department and are certified by the county as match for payment of services eligible for federal financial participation in accordance with 42 CFR 433.51;
(d) the county funds are not federal funds or are federal funds authorized by federal law to be used to match other federal funds; and
(e) the hospital has executed and entered into a written agreement with the department and has agreed to abide by the terms of the written agreement:
(i) the written agreement between the department and the hospital must be executed prior to the issuance of the qualified rate adjustment payment;
(ii) a retroactive effective date on the written agreement shall not be allowed; and
(iii) a hospital that does not enter into a written agreement with the department or does not abide by the terms of the agreement will not be eligible for the qualified rate adjustment payment process.
(2) The qualified rate adjustment payment is subject to the restrictions imposed by federal law, to federal approval of the state plan with respect to qualified rate adjustment and to the availability of sufficient state, county, and federal funding.
(3) The department will calculate the amount of the qualified rate adjustment payment for each eligible rural hospital using the hospital's most recently submitted cost report and paid claims data. The qualified rate adjustment payment for each eligible rural hospital shall be the lesser of:
(a) the amount of county funds transferred to the department plus federal financial participation;
(b) the difference between established Medicaid rates and the upper payment limit (UPL) as set by federal regulation; or
(c) the amount of county match funds to be transferred to the department plus the federal matched funds equal the total QRA payment.
(4) The department will pay the qualified rate adjustment only to hospitals that choose to participate and such payments shall not be subject to the cost settlement process.