Montana Administrative Register Notice 37-582 No. 12   06/21/2012    
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In the matter of the amendment of ARM 37.85.212 and 37.86.105 pertaining to resource based relative value scale (RBRVS)







TO:  All Concerned Persons


1.  On April 26, 2012, the Department of Public Health and Human Services published MAR Notice No. 37-582 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 862 of the 2012 Montana Administrative Register, Issue Number 8.


2.  The department has amended ARM 37.86.105 as proposed.


3.  The department has amended the following rule as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:


            37.85.212  RESOURCE BASED RELATIVE VALUE SCALE (RBRVS) REIMBURSEMENT FOR SPECIFIED PROVIDER TYPES  (1)  For purposes of this rule, the following definitions apply:

            (a) remains as proposed.

            (b)  "Conversion factor" means a dollar amount by which the relative value units, or the anesthesia units for anesthesia services, are multiplied in order to establish the RBRVS fee for a service.  There are four conversion factor categories:

            (i) and (ii) remain as proposed.

            (iii)  mental health services, which applies to the following health care professionals listed in (2):  licensed psychologists, licensed clinical social workers, and licensed professional counselors.  The conversion factor for mental health services for state fiscal year 2013 is $22.80 $22.81; and

            (iv) through (14) remain as proposed.


AUTH:  53-2-201, 53-6-113, MCA

IMP:     53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-125, MCA


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:  A comment was received that the proposed rule changes do not comply with the intent of Senate Bill 241 (SB 241).  The commenter states that the legislative intent of SB 241 is for all physicians to be treated the same, regardless of specialty, and that all physicians should, at a minimum, be paid the same Medicaid rates they received in SFY 2010.


RESPONSE #1:  53-6-124(7), MCA defines the resourcebased relative value scale (RBRVS) to mean the Medicare resource based relative value scale contained in the physician's Medicare fee schedule adopted by the Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health and Human Services.  SB241 did not change the definition of RBRVS.


The RBRVS system is used nationwide by many health plans, including Medicare and many state Medicaid programs.  The system was developed by Medicare and implemented in 1992.  In 1997 the Montana Department of Public Health and Human Services (the department) adopted an RBRVS based fee schedule as the basis for payment for most services provided to Medicaid clients by physicians, midlevel practitioners, therapists, and other individual practitioners.  The department has used an RBRVS system to calculate provider rates since 1997.


The relative value unit (RVU) component of the RBRVS system is revised annually by CMS and the American Medical Association (AMA).  An RVU is a numerical value assigned to every medical procedure based on its relative value in relation to other medical services.  There are thousands of medical procedures identified by current procedural terminology (CPT) codes.  RVUs are added for new procedures and the RVUs for existing medical procedures may increase or decrease from year to year.  The department annually proposes to amend ARM 37.85.212(1)(i) to adopt current RVUs for CMS and the AMA.  The department uses RVUs for medical procedures that are determined by CMS and the AMA.


The RBRVS system for setting rates uses the following formula to set a reimbursement rate for a medical procedure:


            RVU x Conversion Factor x Policy Adjuster (if any) = Reimbursement rate


The department annually calculates conversion factors for allied services, mental health services, and anesthesia services.  These conversion factors are calculated by dividing the Montana Legislature's appropriation for Medicaid clients' health care during the upcoming state fiscal year (SFY) by the estimated total units of health care, expressed as total RVUs paid, to be provided during the upcoming SFY.  The resulting quotient is the conversion factor.  The conversion factor for licensed physicians is described in 53-6-124 and 53-6-125, MCA.  The fee paid by the department for a service is calculated by multiplying that procedure's RVU by the conversion factor and any policy adjustors.  Policy adjustors by statute are not permitted to be less than one.


The department believes that in order to maintain rates at levels no lower than 2010 rates and stay within the Legislature's appropriation for SFY 2013 (the same amount as 2010 with only an adjustment for caseload).  The department would have to maintain the 2010 Medicare RVU scale that is obsolete and would be out of compliance with the definition of RBRVS at 53-6-124(7), MCA.  The department believes that the approach proposed in this rule meets the intent of SB241 to not lower reimbursement from 2010, while continuing to also meet the intent of the remaining portions of the MCA by keeping the Medicare RBRVS in place.  While this approach will pay some individual services and providers an amount less than or more than what was paid historically, the department has made every effort to assure that the aggregate payments will remain the same for physicians.


The Legislature has established a system for setting Medicaid rates.  The intent of the statute is to set the rates for all services, including physician services.  Physician services are based on the RBRVS system and the factors listed in 53-6-113(3), MCA.  The department has implemented the language of SB 241 to be consistent with all the provisions of Title 53, chapter 6, MCA adopted by the Legislature.


COMMENT #2:  Several commenters noted that practitioners in a facility setting, psychiatrists, psychiatric hospitals, and radiologists receive lower fees but that maternity and obstetric providers are seeing fee increases as a result of this rule amendment.  More specifically, they reported an approximate one percent decrease in nonmental health rates in a facility setting and a rate decrease approaching five percent for mental health providers practicing in a facility setting.  These decreases in reimbursement may create or exacerbate access to service issues for Medicaid clients.  The commenter's proposed remedy to this problem is to enhance the psychiatrist rate of reimbursement presently set at 125 percent.


RESPONSE #2:  The department is very concerned that Medicaid clients have access to services and that providers enrolled with the department receive a reasonable level of reimbursement.  As discussed in response # 1, the department sets reimbursement levels based on 53-6-125, MCA, but also must stay within the appropriation.


The department uses nationally computed RVUs as do many payers.  The changes in RVUs may increase or decrease a provider's reimbursement or that of a provider's specialty.  When a change has been made to increase the relative value for services of some procedures or specialties then the relative value for other procedures or specialties must be reduced to offset those increases.  These annual RVU changes may impact some specialties to a greater degree than others.


This year the increases were made to maternity and obstetric providers and decreases to psychiatrists and radiologists.  At this point in time, the department does not believe the SFY 2013 RBRVS fee changes will decrease Medicaid client access to the services of psychiatrists, radiologists, or services at psychiatric hospitals.  Therefore, the department will not either, increase the rate paid to psychiatrists above the present rate which is 25 percent more than the rate paid to other physicians, nor will adjustments be made to the fees set for radiologists.  Although the RBRVS system sets the rates for many mental health service providers, it is not a tool used to reimburse psychiatric hospitals.  Therefore no adjustment is possible for them.  The department will continue to monitor the adequacy of our provider network.


COMMENT #3:  At the public rule hearing, the department entered a comment concerning the mental health services conversion factor for SFY 2013 and noted that the proposed rule amendment originally requested a conversion factor of $22.80.  However, after additional modeling, the department is able to adjust the conversion factor up to $22.81.


RESPONSE #3:  The department will amend the proposed rule and set the conversion factor for mental health services in SFY 2013 at $22.81.


COMMENT #4:  A comment was received stating that the department should be more intentional in its performance of an impact analysis as part of the rulemaking process, to provide more useful information about the areas and types of providers that are impacted when rules are proposed, and questions whether the department met the Medicaid impact analysis requirement in rulemaking in both 2011 and 2012.


RESPONSE #4:  The department provided necessary data to providers so that each provider could perform an analysis.  Completing specific analyses for some providers without making the same analyses available to all would not be equitable.  Given the large number of providers impacted by RBRVS, the department made every reasonable effort to provide data necessary for each provider to evaluate and perform an individual analysis.



/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 June 11, 2012


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