Montana Administrative Register Notice 37-636 No. 12   06/20/2013    
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In the matter of the adoption of New Rules I and II, and the amendment of ARM 37.40.705, 37.40.1105, 37.40.1303, 37.79.102, 37.79.304, 37.85.105, 37.85.212, 37.86.105, 37.86.205, 37.86.805, 37.86.1004, 37.86.1006, 37.86.1105, 37.86.1506, 37.86.1802, 37.86.1807, 37.86.2005, 37.86.2206, 37.86.2207, 37.86.2230, 37.86.2405, 37.86.2505, 37.86.2605, 37.86.3020, 37.86.3515, 37.86.4010, 37.86.4205, 37.87.901, 37.87.1303, 37.87.1313, 37.87.1314, 37.87.1333, 37.87.2233, 37.88.907, 37.89.125, 37.89.523, and 37.90.408 pertaining to revision of fee schedules for Medicaid provider rates




















TO: All Concerned Persons


1. On April 25, 2013 the Department of Public Health and Human Services published MAR Notice No. 37-636 pertaining to the public hearing on the proposed adoption and amendment of the above-stated rules at page 621 of the 2013 Montana Administrative Register, Issue Number 8. On May 23, 2013, the Department of Public Health and Human Services published an Amended Notice of Public Hearing on Proposed Adoption and Amendment at page 824 of the 2013 Montana Administrative Register, Issue Number 10.


2. The department has adopted New Rule II (37.85.104), as proposed.


3. The department has amended ARM 37.40.705, 37.40.1105, 37.40.1303, 37.79.102, 37.79.304, 37.85.105, 37.85.212, 37.86.105, 37.86.205, 37.86.805, 37.86.1004, 37.86.1006, 37.86.1105, 37.86.1506, 37.86.1802, 37.86.1807, 37.86.2005, 37.86.2206, 37.86.2207, 37.86.2230, 37.86.2405, 37.86.2505, 37.86.2605, 37.86.3020, 37.86.3515, 37.86.4010, 37.86.4205, 37.87.901, 37.87.1303, 37.87.1313, 37.87.1314, 37.87.1333, 37.87.2233, 37.88.907, 37.89.125, 37.89.523, and 37.90.408 as proposed.


4. The department has adopted the following rule as proposed with the following changes from the original proposal. Matter to be added is underlined. Matter to be deleted is interlined.



(2) Orientation and Mobility Specialist Services are medically necessary services provided to Medicaid clients whose health conditions blindness and visual impairment cause them to need vision-assisted services.


AUTH: 53-2-201, 53-6-101, 53-6-113, MCA

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


5. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:






No comments were received regarding the Healthy Montana Kids Program.




COMMENT #1: One comment supported the department’s proposal to propose all Medicaid fee schedules in a single notice. An additional comment stated appreciation for the department amending the proposed rule to eliminate sequestration from the rule.


RESPONSE #1The department interprets the comment to mean that the commenter is referring to the rule rather than the notice. The department thanks the commenters for their support of the rule.


COMMENT #2: One comment expressed support for the 5.7% increase in the physician services conversion factor regarding the RBRVS fee schedule.


RESPONSE #2: The department thanks the commenter for their support regarding the rate increase.


COMMENT #3: One commenter, representing Montana health care providers did not support or oppose the department’s decision to put the entire rate increase into inpatient services. The department requested provider reaction to this proposal. After polling its members, the commenter felt that providers were unable to respond because no data was available illustrating the implications of the proposal.  The commenter solicited a commitment from the department to work with the commenter to better analyze the policy implications prior to state fiscal year 2015.


RESPONSE #3: The department appreciates the need for accurate data in order to review the policy implications generated by the proposed rule amendments. The department’s methodologies for calculating Medicaid reimbursement rates are set forth in ARM 37.86.2803, 37.86.2905, 37.86.2907, 37.86.2912, 37.86.2916, 37.86.2918, 37.86.292037.86.2925, and 37.86.2928. While the limited time available to implement a July 1, 2013 rule for a provider rate increase prevented the department from generating the different rate scenarios, providers were able to calculate alternative rate scenarios and comment accordingly. The department is committed to working with members of the health care industry in the implementation of the rate increases slated for July 1, 2014. The department acknowledges and thanks the commenter for their concerns.


COMMENT #4: One comment expressed concern about the proposed base price for the APR-DRG system.  The commenter expressed inability to determine how the department calculated the proposed rate increase. In addition, the commenter suggests the department uses fiscal year 2012 actual discharges to figure the base payment as opposed to fiscal year 2013 actual discharges.


RESPONSE #4: The department provided the rate sheet calculations to interested parties. A complete list of Medicaid provider rate methodologies appears in the response to comment #3. The calculations proposed by the department were based upon a set dollar figure appropriated by the 63rd Montana Legislature.  The department believes that figuring the base payment using fiscal year 2013 actual discharges provides a more current and accurate base rate figure.  The department does recognize that an incorrect calculation did occur with the proposed base rate figure of $4,742.  The corrected figure for the Montana average inpatient hospital base rate will be amended to $4,758.  The department wishes to thank the commenter for bringing this to the attention of the department.




COMMENT #5: One commenter expressed support for the 5.7% increase in the physician services conversion factor regarding the RBRVS fee schedule.


RESPONSE #5: The department thanks the commenter for their support regarding this rate increase.




COMMENT #6: A commenter was concerned that Orientation and Mobility (O&M) Specialist Services would be less accessible to all Montana children rather than more accessible.


RESPONSE #6: The department appreciates the comment, but respectfully disagrees. The O&M Specialist Service that is being added to the School-Based Services in ARM 37.86.2230 is to make the services of promoting self-care and home-management training as well as teaching activities of daily living and help in learning sensory integrative techniques. By adding a reference to New Rule I (37.86.2235) in ARM 37.86.2206, the services are also being made available to Medicaid eligible children, age 0 to 3 years old, that are not in school and require these services from an O&M specialist. The department believes that by making this service available for Medicaid reimbursement, children, both in school and before school age, would have greater access to this service.


COMMENT #7: A commenter was concerned about Medicaid purchasing canes for blind children and the cost of the cane going up.


RESPONSE #7: The department appreciates the comment; however, the purchasing of canes is not a part of this rule. The department currently reimburses the cost of canes through the Medicaid Durable Medical Equipment (DME) program for those members that qualify and will continue to do so in the future.


COMMENT #8: A commenter was concerned about the O&M Specialist Services being reimbursed in a school when "The Office of Public Instruction (OPI) already pays for Mobility and Vision Services." This appears to be a duplication of existing state services. The commenter also is concerned that this rule will set blind children apart from the mainstream educational setting and that non-Medicaid eligible children will not receive the service in a school.


RESPONSE #8: The department thanks the commenter and understands that OPI already supplies the service to those that need and qualify for O&M Specialist Services. This rule will allow Medicaid reimbursement for those students whose Individual Education Plan (IEP) includes O&M Specialist Services and will help offset the schools expense in providing the services. The department's school-based services program ensures that Medicaid eligible children with IEPs receive access to medically necessary services to fulfill their education plan.


COMMENT #9: A commenter suggested changes in the O&M Specialist Services New Rule 1 (37.86.2235) that would have replaced "medically necessary" with "educationally necessary" and "health conditions" with "blindness or visual impairment."


RESPONSE #9: The department thanks the commenter and has adopted the suggested change from "health conditions" to "blindness or visual impairment." The department will not change the "medically necessary" verbiage because Medicaid does not reimburse for educational activities in the School-Based Services Program.


COMMENT #10: The department received multiple comments in support of adding the O&M Specialist Services to its fee schedule for Montana Medicaid eligible clients, age 0 to 20, that are not in school or in school as a reimbursable service.


RESPONSE #10: The department appreciates the comments of support from these individuals.


COMMENT #11: The department received several comments that suggested the department set a fee schedule amount for the diabetic testing supplies instead of utilizing the Medicare single payment amount that goes into effect July 1, 2013. The commenters also pointed out numerous flaws that they see in regards to the new competitive bidding rate process and the negative impact it could have on the residents and DME providers for our state. They argued that the adoption of the Medicare Round Two Competitive Bidding rates were set by studies of large metropolitan areas and did not take into consideration the impact on the smaller rural areas. The commenters argue that the rates are too low and will ultimately create job losses in our state and poor access for Medicaid patients needing these products and services.


RESPONSE #11: The department thanks the commenters but disagrees. The department's DME fee schedule follows the Medicare Region D allowable fee for all items except where no Medicare allowable fee is available. The new Medicare single payment amount for the mail order diabetic testing supplies will replace the existing fee schedule amount on the Medicare fee schedule effective July 1, 2013. The department's DME fee schedule has incorporated Medicare fees since 2004 and will continue to follow this methodology.


COMMENT #12: The department received comments voicing concerns about Medicare's requirement that a documented face-to-face evaluation, between the beneficiary and the physician, be done prior to the dispensing of DME items. Commenters also argued that the Medicare system's coverage criteria are outdated and that Medicare rules and coverage determinations are written primarily to meet the need of the elderly population. They stated this creates a major gap in coverage of essential DME items for the younger population. Commenters also argued that the department chooses to follow Medicare coverage criteria when it is convenient to do so.


RESPONSE #12: The department thanks the commenters. However, the comments are not relevant to the proposed amendments of rule ARM 37.85.105. The department has adopted Medicare coverage criteria for Medicare covered DME as outlined in the Region D Supplier Manual, local coverage determinations (LCDs), and national coverage determinations (NCDs). The department will continue to take into consideration relevant coverage and policy exceptions to Medicare coverage criteria as it relates to the Medicaid DME Program.




COMMENT #13: One commenter disagrees with the department's decision to reduce the proposed psychiatrist provider rate of reimbursement adjustment from 125% to 112% in ARM 37.85.105(f). The commenter states the rate of adjustment for psychiatry was150% and the department reduced the rate to 125% because it was "stated the adjustment did not affect Medicaid patient's access to psychiatry." The commenter expressed concern that the provider rate of reimbursement is further reduced to 112%. The commenter asked the department to explain why there is a need for further reduction, what evidence does the department have that this will not affect access to psychiatry, does the state think psychiatry is over-compensated or is in over-abundance, how does it benefit the rural accessibility, and what is the purpose for the reduction?


RESPONSE #13: The department recognizes the contribution Medicaid providers make to quality health care and agrees with the commenter that access to psychiatrists is important for Medicaid clients. The department uses federally computed relative value units (RVUs). Changes in RVUs increase or decrease a provider's reimbursement or that of a provider's specialty. When a change is 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 in order for the department to remain within the legislative appropriation. These annual RVU changes may impact some specialties to a greater degree than others.


Resource-Based Relative Value Scale (RBRVS) provider rates for psychiatrists adjusted at 125% of the rate paid to physicians in order to address inadequate access to mental health services by Medicaid members. These services will continue to have a favorable provider rate adjustment to address access problems; however, it has been adjusted from 125% to 112% in order for the department to stay with the legislative appropriations for state fiscal year (SFY) 2014.


The policy adjustor is just one piece to the equation in how the rate is set in RBRVS; although the policy adjustor was reduced from 125% to 112% for psychiatrists, the actual rates to psychiatrists increase overall with RVU and conversion factor changes. Since rates will be higher overall for psychiatrists, it should not negatively impact access. Additionally, the department's proposed change remains a positive rate adjustment for psychiatrists in relation to other licensed physicians.




COMMENT #14: The department received several comments related to ARM 34.40.1303, "Self-Directed Personal Assistance Services" and ARM 37.40.1105, "Personal Care Services – Agency Based" asking for clarifications on various definitions that are currently in these rules. The commenters requested additional clarification on the tasks that can be provided under various definitions in the rule and when the definitions will be completed and if there will be a comment period.


RESPONSE #14: The department has not proposed any changes related to the service delivery provision of these services or the definition of these services in this rule notice. These rule changes were to incorporate the fee schedule by reference into one administrative rule, and to restate in a clearer way the services under each of these rules.


The personal assistance service administrative rule and program policy provides for billing of specific oversight and nurse supervision; however, this service was never intended to reimburse for all administrative and follow-up costs. The department understands that there are costs to doing business that are not directly billable and accounts for this in the overall rate structure. The department has developed specific policy related to Medicaid provider requirements for program oversight in the personal assistance program. Administrative costs are not billable and are included in the reimbursement rate for personal assistance service.


The department has developed specific policy related to what constitutes an approved service under medical escort. It is up to the personal assistance provider agency to implement safeguards to ensure that the service of medical escort is provided within the policy guidance. The department has allowed for flexibility so that each agency can design their own approach for delivering this service within the parameters set through rule and policy.


The department agrees that the rule does not specifically address reimbursement of mileage for medical escort. Reimbursement for this service is primarily provided through Medicaid Transportation. When this service is billed to the Personal Assistance Program it is very limited and the department provides the parameters for its use in the Personal Assistance Service and Self-Directed Personal Assistance Service Policy Manuals. The service is billed the same as mileage for shopping, which is included in the amended rule.


The rate for mileage reimbursement in the Personal Assistance Service Program coincides with the rate Medicaid pays for mileage reimbursement under Medicaid Transportation. The Medicaid Transportation rate did not increase, thus the rate for mileage in the Personal Assistance Program remained unchanged.


The department provides direction, clarification, and examples in the Personal Assistance Service and Self-Directed Personal Assistance Service Policy Manuals related to the types of activity that can be included under these categories of service and definitions for these services. The department would direct the respondent and others interested to those policy manuals, which are available upon request or are located on the division's web site at http://www.dphhs.mt.gov/sltc/services/communityservices/PAS.shtml.


COMMENT #15: A commenter raised concerns about the quarterly updates as necessary to the fee schedule noted in the amendment in ARM 37.85.105(1) and would like clarification that this sentence specifies only new and old procedure codes will be added, deleted, or both and does not indicate rates will be adjusted quarterly. Quarterly adjustment of rates would be an unreasonable administrative burden on billing staff.


RESPONSE #15: The rule language allows for quarterly updates to the fee schedule, in addition to procedure codes. It does not require quarterly updates to programs where these updates are not necessary. The department needs the ability to be responsive to changing circumstances that may precipitate a change in the fee schedule, which is the subject of this section of the administrative rules. It would be unlikely that the department would update the fee schedule for Personal Assistance or Self-Directed Personal Assistance providers more often than annually.


            6. These rule amendments are effective July 1, 2013.




/s/ John Koch                                               /s Richard H. Opper                                    

John Koch                                                    Richard H. Opper, Director

Rule Reviewer                                             Public Health and Human Services


Certified to the Secretary of State June 10, 2013.



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