Montana Administrative Register Notice 37-533 No. 12   06/23/2011    
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In the matter of the adoption of New Rule I, amendment of 37.87.903, 37.87.1201, 37.87.1202, 37.87.1206, 37.87.1217, 37.87.1222, and 37.87.1223, and repeal of 37.88.910 pertaining to psychiatric residential treatment facility reimbursement










TO: All Concerned Persons


1. On March 10, 2011, the Department of Public Health and Human Services published MAR Notice No. 37-533 pertaining to the public hearing on the proposed adoption, amendment, and repeal of the above-stated rules at page 293 of the 2011 Montana Administrative Register, Issue Number 5.


2.  The department has adopted New Rule I (37.87.1210) as proposed.


3. The department has amended ARM 37.87.903, 37.87.1201, 37.87.1202, 37.87.1206, 37.87.1217, 37.87.1222, and 37.87.1223, and repealed 37.88.910 as proposed.


4. 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 proposed adjusting retrospectively the psychiatric residential treatment facility (PRTF) statewide bundled per diem interim rate as well as the PRTF ancillary rate in ARM 37.87.1222(5). Commenter proposed adjusting the PRTF interim per diem rate because the department's rules requiring "…active treatment designed to achieve the youth's discharge to a less restrictive level of care at the earliest possible time" has significantly reduced the PRTF average length of stay. The highest level of treatment intensity is in the first couple of months following a youth's admission to a PRTF. Under previous regulations, longer average lengths of stay allowed the PRTF the opportunity to recapture some of the costs incurred within the first months of treatment. Therefore, a cost settlement reimbursement system that includes the PRTF rate along with the ancillary rate would more fairly reimburse a PRTF for the costs incurred to treat a youth while in their facility.


RESPONSE #1: The department believes the commenter is confusing the terms and using the interim rate definition in ARM 37.87.1222(1) with the psychiatric service rate in ARM 37.87.1222(1)(a) because they proposed to add "psychiatric residential treatment facility" costs in ARM 37.87.1222(5)(a) and (b). The interim rate in ARM 37.87.1222(1) is composed of the psychiatric service rate in (1)(a), an applicable direct care wage add-on in (1)(b) and a facility specific ancillary add-on rate in (1)(c). 


The department disagrees with the proposal to cost settle all PRTF costs or the psychiatric service rate costs in ARM 37.87.1222(1)(a) and notes it did not propose changes to ARM 37.87.1222(5), other than to renumber the rule. Only the PRTF ancillary expenses in ARM 37.87.1222(1)(c) are cost settled, not the psychiatric service rate. The proposed change to ARM 37.87.1222(5) is outside the scope of the proposed rule change.


COMMENT #2: One commenter proposed limiting reimbursement for ancillary services in ARM 37.87.1222(7), provided by an enrolled Medicaid provider to the department's published Medicaid fee schedule rate instead of reimbursing the provider's usual and customary charges. Without requiring outside providers to accept the Medicaid rate, the cost of ancillary services will increase for the department. The current language allows outside providers to demand their ancillary services to be reimbursed at their usual and customary charge, when they would be reimbursed the Medicaid rate for the same service if the youth were not in a PRTF.


The current language encourages outside providers to self-regulate and accept the Medicaid rate, but this could become an opportunity for the outside providers to maximize their reimbursement while providing services to Medicaid patients in a PRTF.


The commenter believes the changes are necessary to improve the ancillary service reimbursement process for PRTFs and to avoid a negative impact to the Medicaid mental health program budget by increasing ancillary service costs.


RESPONSE #2: The department appreciates the commenter's recommendation, but disagrees. Limiting reimbursement for ancillary services provided outside the PRTF by Medicaid providers to the current Medicaid fee schedule rate may limit ancillary services for youth in a PRTF. It is not the department's intent to limit ancillary services to youth in a PRTF. The department does not have the staff or resources to manually price ancillary service claims, and assumes the same applies for the ancillary service providers and PRTFs. In addition, the department cannot require ancillary service providers who are not enrolled in the Montana Medicaid program to enroll in the program and accept the Medicaid reimbursement rate.


COMMENT #3: One commenter recommended Medicaid and third party liability (TPL) requirements apply to PRTF and ancillary services reimbursed by the Medicaid program in ARM 37.87.1222(8). The proposed changes would address a number of issues and assist both the department and PRTFs in processing and reimbursing ancillary services provided to youth in a PRTF.


The commenter recommended all ancillary services provided to youth in a PRTF be billed to Medicaid, including services provided in and by or outside the PRTF, for both in- and out-of-state PRTFs. Commenter believes this would assist the department in estimating the cost of ancillary services prior to receiving the cost reports. Commenter recommended ancillary service providers bill the PRTFs using either a CMS 1500 or UB claim form. Copies of the explanation of benefits, denials, etc., are needed by the PRTF to determine whether or not the service would be covered by Medicaid and if any insurance payments were made. Use of these claim forms would also provide the department with the information they need for the cost report.


Commenter believes timely filing language is also needed in the rule for billing the PRTF for ancillary services. PRTFs have received reimbursement requests for ancillary services after the Medicaid timely filing requirements have lapsed. If this occurs, the department may not consider the claim in the cost settlement process. The ancillary service provider should also be required to collect the client's copayment for the service.


RESPONSE #3: The department disagrees with the commenter's recommendations for ARM 37.87.1222(7).


The department will not require in-state ancillary service providers, outside the PRTF, to bill Medicaid for ancillary services provided to a youth in a PRTF before billing the PRTF. The department is not party to the arrangement between the PRTF and the ancillary service provider and cannot stipulate in the PRTF rules what the billing relationships will be. If the PRTF has a question about whether or not the service is a covered ancillary service, they may consult with the department. Montana Medicaid does not require a copayment for individuals under 21 years of age.


COMMENT #4: One commenter asked if the ancillary services in ARM 37.87.1222(8) including ancillary services provided outside the PRTF by outside providers, are exempt from prior authorization requirements when provided to youth in a PRTF.


RESPONSE #4: Yes, ancillary service in ARM 37.87.1222(8) means ancillary services provided in and by the PRTF as well as those provided outside the PRTF by outside providers. Medicaid prior authorization requirements do not apply to ancillary services when provided to youth in a PRTF.


COMMENT #5: One commenter proposed the effective date of the proposed PRTF reimbursement changes in ARM 37.87.1223(1) be July 1, 2011 instead of September 1, 2010. The proposed retroactive date of September 1, 2010, if implemented, would increase costs for both the department and the PRTFs. The splitting of the department's fiscal reporting period requires PRTFs to file separate cost reports for each regulation period set within the department's fiscal period. The time and energy put into the preparation by the PRTFs and the review by the department outweigh any benefit. PRTFs have been required to operate under the existing rules for at least nine months following the proposed retroactive date.


RESPONSE #5: The department disagrees with the commenter's proposed change to the PRTF reimbursement effective date. The department received approval from the Centers for Medicare and Medicaid to use federal financial participation instead of state general funds to reimburse ancillary services effective September 1, 2010. The estimated annual impact of the retroactive effective date to September 1, is approximately $881,189 in saved state general funds.


COMMENT #6: One commenter proposed changing the out-of-state PRTF reimbursement rate in ARM 37.87.1223(4) from 50% of their usual and customary charges to the in-state PRTF reimbursement rate, whichever is less, their usual and customary charges or the department's fee schedule rate. Commenter also proposed out-of-state PRTFs receive a facility-specific ancillary rate, and that the ancillary costs are retrospectively cost settled like they are for in-state PRTFs. These changes are proposed to provide consistency in reimbursement for PRTF services whether or not they are provided by an in-state or out-of-state provider. The practice of reimbursing out-of-state providers at the same rate as in-state providers is commonly practiced by other state Medicaid programs.


RESPONSE #6: The department disagrees and will not be changing the language in ARM 37.87.1223(4). The three in-state PRTFs have the first opportunity to treat youth needing PRTF services. In-state PRTF denials are required prior to a youth being admitted to an out-of-state PRTF. Some of the most difficult-to-serve youth are served in out-of-state PRTFs. Out-of-state PRTF placements for treatment are used as a last resort when in-state PRTFs have determined that they cannot meet the youth's treatment needs. The department does not have the staff or resources to complete out-of-state PRTF cost reports.





/s/ John Koch                                     /s/ Anna Whiting Sorrell                               

Rule Reviewer                                   Anna Whiting Sorrell, Director

                                                            Public Health and Human Services


Certified to the Secretary of State June 13, 2011


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