Montana Administrative Register Notice 37-664 No. 1   01/16/2014    
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In the matter of the amendment of ARM 37.85.105 pertaining to the revision of fee schedules for Medicaid provider rates in January 2014








TO: All Concerned Persons


            1. On February 5, 2014, at 10:00 a.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed amendment of the above-stated rule.


2. The Department of Public Health and Human Services will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact Department of Public Health and Human Services no later than 5:00 p.m. on January 29, 2014, to advise us of the nature of the accommodation that you need. Please contact Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; telephone (406) 444-4094; fax (406) 444-9744; or e-mail dphhslegal@mt.gov.


3. The rule as proposed to be amended provides as follows, new matter underlined, deleted matter interlined:


            37.85.105 Effective dates, CONVERSION FACTORS, POLICY ADJUSTERS, AND COST-TO-CHARGE RATIOS of Montana Medicaid Provider Fee Schedules (1) remains the same.

            (2) The department adopts and incorporates by reference, the resource-based relative value scale (RBRVS) reimbursement methodology for specific providers as described in ARM 37.85.212 on the date stated.

            (a) through (g) remain the same.

            (h) Optometric services receive a 112% provider rate of reimbursement adjustment to the reimbursement for allied services as provided in ARM 37.85.105(2) effective July 1, 2013 January 1, 2014.

            (i) Reimbursement for physician administered drugs described at ARM 37.86.105 is determined at 42 CFR 414.904 (2013) and is effective July 1, 2013.

            (3) The department adopts and incorporates by reference, the fee schedule for the following programs within the Health Resources Division, on the date stated.

            (a) and (b) remain the same.

            (c) The hearing aid services fee schedule, as provided in ARM 37.86.805, is effective July 1, 2013 January 1, 2014.

            (d) through (k) remain the same.

            (l) Montana Medicaid adopts and incorporates by reference the Region D Supplier Manual which outlines the Medicare coverage criteria for Medicare covered durable medical equipment, local coverage determinations (LCDs), and national coverage determinations (NCDs) as provided in ARM 37.86.1802, effective July 1, 2013 January 1, 2014. The prosthetic devices, durable medical equipment, and medical supplies fee schedule, as provided in ARM 37.86.1807, is effective July 1, 2013 January 1, 2014.

            (m) through (5) remain the same.

            (6) The department adopts and incorporates by reference, the fee schedule for the following programs within the Developmental Services Division, on the date stated.

            (a) Mental health services for youth, as provided in ARM 37.87.901 in the Medicaid Youth Mental Health Services Fee Schedule, is effective November 1, 2013 January 1, 2014.

            (b) and (c) remain the same.


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

IMP:     53-2-201, 53-6-101, 53-6-402, MCA




The Department of Public Health and Human Services (the department) is proposing amendments to three fee schedules in ARM 37.85.105. The three fee schedules of this rule are listed below with an explanation of the amendments and why they are necessary. Two of the fee schedule proposed amendments are within the Health Resources Division rules and the third proposed amendment is within the Developmental Services Division rules.


The other proposed amendment concerns physician-administered drugs. The department intends to remove the date information in ARM 37.85.105(2).


ARM 37.85.105




Physician-Administered Drugs


The Montana Medicaid Program is administered by the department to provide health care to Montana's qualified low income and disabled residents (hereinafter "Medicaid clients"). It is a public assistance program paid for with state and federal funds appropriated to pay health care providers (hereinafter "Medicaid providers") for the covered medical services they deliver to Medicaid clients. The Legislature delegates authority to the department under 53-6-101(8) and 53-5-113, MCA, to set the reimbursement rates Montana pays Medicaid providers for Medicaid clients covered services.


The department reimburses physician-administered drugs using Average Sales Price methodology as described at 42 CFR 414.904. This pricing methodology is maintained by the Centers for Medicare and Medicaid Services (CMS) and is updated quarterly by them. The department accepts the CMS update file and adjusts its pricing for physician-administered drugs. To keep this rule current requires periodic amendment. The amendment will better align the reimbursement of physician-administered drugs with the methodology used by the Medicaid Outpatient Pharmacy Program. Outpatient drugs are reimbursed using a reimbursement method that responds to fluctuations in drug prices due to market volatility. Pricing of physician-administered drugs will continue to be updated quarterly with no change in methodology or business practice.


Fiscal Impact


There is no fiscal impact.


Optometric and Optician Fee Schedules


The department is proposing amendments to ARM 37.85.105(2)(h) for reimbursement of optometric services. The proposed rule change is necessary to update the Medicaid posted fee schedule effective January 1, 2014, for optometric and optician providers. The Medicare rates being used will be updated to accurately reflect those codes that are updated with the January update to Medicare reimbursements.


The optometric and optician fee schedules use the same reimbursement method as Medicare fees for some of the allowed codes. When Medicare does its biannual price change and/or code change in January every year, these codes must have their reimbursement fees changed also. This rule quotes the date of the fee schedules that the Montana Medicaid Optometric Program uses and when any changes are made to the posted fee schedules the date of that change is reflected on the schedule itself.


The change is necessary to keep the rule updated and current to reflect proper payment of posted fees allowed for procedures.


Fiscal Impact


The proposed amendments to this rule are expected to have no fiscal impact for optometrists as they have not billed these codes in the past, and an increase in reimbursement to opticians of an estimated $3,536.35 is expected for the remainder of the state fiscal year (SFY) 2014. There is an expected increase to the opticians only of $7,072.69 for the SFY of 2015.


The proposed rule amendments could affect an estimated 156 optometrists and 25 opticians.  The increased funding will aid in providing services for the 101,087 members within Montana who receive optometric benefits.


Hearing Aids and Durable Medical Equipment


The department is proposing to amend ARM 37.85.105(3)(c) for reimbursement of hearing aid services. This proposed amendment to the fee schedule date is necessary to reflect yearly changes in Medicare rates.


The department is proposing to amend ARM 37.85.105(3)(l) for reimbursement of durable medical equipment to reflect yearly changes in Medicare rates. The Medicare Region D Supplier Manual, Local Coverage Determinations (LCD) policy articles, and National Coverage Determinations (NCD) fee schedule is being updated to January 1, 2014, to reflect changes in Medicare policy.


Fiscal Impact


ARM 37.85.105(3)(c) Hearing Aid Services, Reimbursement


The fiscal impact is negligible for SFY 2014 and 2015.


ARM 37.85.105(3)(l) Prosthetic Devices, Durable Medical Equipment, and Medical Supplies, General Requirements, and Fee Schedule


SFY 2014

State General Fund: $22,822       Federal Funds: $44,840    Total Funds: $67,662


SFY 2015

State General Fund: $47,992       Federal Funds: $94,080    Total Funds: $142,072


The proposed amendments are estimated to affect:  324 DME providers, 20 hearing aid providers, 24 audiology providers, and 101,479 Medicaid recipients.




The department is proposing to amend ARM 37.85.105(6)(a) to implement a rate increase for Targeted Case Management for Youth With Serious Emotional Disturbances (SED). The rate increase is being done because the 63rd Legislature increased rates to remedy a perceived inequity between adult and youth case management rates.


The department is also proposing to remove the reference to the facility-specific ancillary rate for Psychiatric Residential Treatment Center (PRTF) on the Medicaid Youth Mental Health Fee Schedule. This proposed amendment is necessary to implement changes that were made in ARM 37.87.1223 which allow ancillary services to be paid directly to providers.


Fiscal Impact


To increase the targeted case management rate the Legislature appropriated $2,811,236 in total funds for state fiscal year (SFY) 2014 and $2,867,563 for SFY 2015. The appropriated amounts listed do not include additional referral services attributable to increased case management.


Approximately 500 youth receive PRTF services annually. Approximately 4,000 youth receive targeted case management services annually.


            5. The department intends to apply these proposed rule amendments retroactively to January 1, 2014. A retroactive application of the proposed rule amendments does not result in a negative impact to any affected party.


            6. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail dphhslegal@mt.gov, and must be received no later than 5:00 p.m., February 13, 2014.


7. The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.


8. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 6 above or may be made by completing a request form at any rules hearing held by the department.


9. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.


10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.


11. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rule will not significantly and directly impact small businesses.



/s/ John C. Koch                                          /s/ Marie Matthews for                                

John C. Koch                                               Richard H. Opper, Director

Rule Reviewer                                               Public Health and Human Services


Certified to the Secretary of State January 6, 2014.



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