Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF PUBLIC

HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

In the matter of the adoption of New Rules I through XIII pertaining to the Montana Medicaid Provider Incentive Program for electronic healthcare records

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION

TO: All Concerned Persons

1. On June 15, 2011, at 10:00 a.m. the Department of Public Health and Human Services will hold a public hearing in Room 207 of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed adoption of the above-stated rules.

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 June 6, 2011, 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 [email protected].

3. The rules as proposed to be adopted provides as follows:

NEW RULE I PURPOSE (1) The rules in this chapter implement the Montana Medicaid Provider Incentive Program (MMPIP). The purpose of the program is to provide incentive payments to eligible health care and hospital providers to adopt, implement, or upgrade certified electronic health record (EHR) technology and demonstrate the meaningful use of such technology. This incentive program is designed to encourage eligible health care providers to improve health information technology capabilities and accelerate the use of EHRs in meaningful ways to help Montana improve the quality, safety, and efficiency of patient health care.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE II DEFINITIONS For purposes of the Montana Medicaid Provider Incentive Program (MMPIP), the following definitions apply:

(1) "Act" means the Health Information Technology for Economic and Clinical Health Act or "HITECH" Title XIII of Division A and Title IV of Division B of the American Recovery and Reinvestment Act of 2009 (ARRA), Pub. L. No. 111-5 (2009).

(2) "Electronic Health Records" (EHR) means a systematic collection of electronic health information about individual patients or populations. For the purposes of these rules, the term "EHR" will refer to an electronic health record information system that is certified by the Certification Commission for Health Information Technology and therefore qualifies for the Montana Medicaid Provider Incentive Program.

(3) "Eligible hospital" (EH) means an acute care hospital (including critical access hospitals and cancer hospitals) with at least 10% Medicaid patient volume and a children's hospital with no Medicaid patient volume requirements. An EH must have a Centers for Medicare and Medicaid (CMS) Certification Number with the last four digits in the series 0001-0879 as defined in 42 CFR 495.302 (2011).

(4) "Eligible hospital patient volume encounter" means the services rendered during one day by an eligible hospital to individuals, per inpatient discharges, or in an emergency department, for which Medicaid, or a Medicaid demonstration projection under 42 USC 1315 (2011), paid all or part of the fee or paid all or part of the individual's premiums, copayments, and/or cost-sharing.

(5) "Eligible provider" (EP) means a physician, dentist, nurse practitioner, certified nurse midwife, physician assistant practicing at a federally qualified health center (FQHC) or rural health clinic (RHC) so led by a physician assistant, critical access hospital, or acute care hospital.

(6) "Eligible provider patient volume encounter" means services rendered during one day by an eligible provider to individuals for which Medicaid, or a Medicaid demonstration project under 42 USC 1315 (2011), paid part or all of the fee or paid all or part of the individual's premiums, copayments, and/or cost-sharing.

(7) "Encounter" means a face-to-face meeting between a patient and health care provider taking place on any one day and at a single location.

(8) "Federally qualifying health clinics" (FQHC) means an entity defined at 42 USC 1395x(aa)(3) and 42 USC 1395y(aa)(3). This includes an outpatient health program or facility operated by a tribe or tribal organization receiving funds under Title V of the Indian Health Care Improvement Act for the provision of primary health services. In considering this definition, it should be noted that programs meeting FQHC requirements commonly include the following (but must be certified and meet all requirements stated above):

(a) Community Health Centers;

(b) Migrant Health Centers;

(d) Public Housing Primary Care Programs;

(e) Federally Qualified Health Center Look-Alikes; and

(f) Tribal Health Centers.

(9) "Meaningful use" means the use of a certified EHR in a meaningful manner. Examples of meaningful use include: e-Prescribing, the use of certified EHR technology for electronic exchange of health information to improve quality of health care, and the use of certified EHR technology to submit clinical quality or other measures.

(10) "Montana Medicaid fiscal agent" means a contractor hired by the Department of Public Health and Human Services to provide a variety of services associated with the operation of the state Medicaid Program including claims processing, provider services, and other functionality.

(11) "Montana Medicaid Management Information System" (MMIS) means an automated system used by the department to administer various aspects of the Montana Medicaid Program, including claims processing and payment.

(12) "National Level Repository" (NLR) means a new record system authorized by provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) (P.L. 111-5) and designed to collect, maintain, and process information that is required for the Medicaid EHR Incentive Program.

(13) "Needy individual patient volume encounter" means:

(a) a patient for whom Medicaid, Healthy Montana Kids (HMK) Plan, or a demonstration project under 42 USC 1315(2011), paid for part or all of the services or paid all or part of the individual's premiums, copayments, and/or cost sharing; or

(b) services rendered to an individual on any one day on a sliding scale or that were uncompensated.

(14) "Program" means the Montana Medicaid Provider Incentive Program (MMIP).

(15) "Rural Health Clinic (RHC) means a clinic that is certified under 42 USC 1935x(aa)(2) to provide care in underserved areas, and therefore, to receive cost-based Medicare and Medicaid reimbursements.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE III Eligible Provider Registration with Centers for Medicare and Medicaid (CMS) National Level REPOSITORY (NLR) (1) Medicaid Eligible Providers (EPs) and Eligible Hospitals (EHs) that choose to participate in the MMIP, will register through the Centers for Medicare and Medicaid (CMS) National Level Repository (NLR) indicating the program (Medicare or Medicaid) and the state selected. EPs may choose to participate in either the Medicare incentive program or a state Medicaid Incentive Program, but not both. EHs may participate in both the Medicare and Medicaid Incentive Programs. The department will use the NLR system to confirm provider eligibility and prevent duplication of payments. CMS will notify the department electronically of EPs and EHs who are electing to participate in MMIP.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE IV ELIGIBLE PROVIDER and ELIGIBLE HOSPITAL Eligibility Verification by DPHHS (1) The following information will be verified by the department upon receipt of notification from the CMS that a Montana EP enrolled:

(a) the EP has no sanctions preventing participation;

(b) the EP is alive;

(d) the EP is an eligible provider type (e.g., physician, dentist, nurse practitioner, certified nurse midwife, physician assistant practicing in a FQHC or RHC led by a physician assistant, critical access hospital, or acute care hospital);

(e) the EP is appropriately licensed by the state of Montana; and

(f) the EP is listed on the NLR correctly.

(2) Montana Medicaid will verify eligibility through the Montana Medicaid Management Information System (MMIS). If the provider is listed in the MMIS in an active status, the Montana Medicaid Fiscal Agent has already completed the verification for licensure, sanctions, and death.

(3) An EP must be actively enrolled in Medicaid in order to apply for the MMPIP program. If the provider is not listed as active in the MMIS, the provider must enroll, or clarify enrollment status with the Montana Medicaid Fiscal Agent prior to continuing registration in the MMPIP program.

(4) For an EP to qualify as "not hospital-based" at least 10% of his or her services must be performed somewhere other than a hospital. To verify that the EP is not hospital-based, Montana Medicaid will use Medicaid claims information from the MMIS and apply the formula in (a).

(a) (Paid Claims with Place Of Service (POS) codes 21 and 23) divided by (Total Paid Claims for all Services). A resulting value less than 90% qualifies.

(b) Prior to remittance of any incentive payment by the department, the EP must attest his or her hospital-based services are less than 90%.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE V ELIGIBLE HOSPITAL ELIGIBILITY VERIFICATION BY DPHHS (1) The following information will be verified by the department upon receipt of notification from the CMS NLR that a Montana EH enrolled:

(a) the EH has no sanctions preventing participation;

(b) the EH is appropriately licensed by the state of Montana;

(d) the EH has a 10% Medicaid patient volume; and

(e) the EH is an eligible provider type (e.g., acute care hospital including critical access hospitals, cancer hospital, or children's hospital).

(2) Montana Medicaid will verify eligibility through the Montana Medicaid Management Information System (MMIS). If the EH is listed in the MMIS in an "active" status, the Montana Medicaid fiscal agent has already completed the verification for licensure and sanctions.

(3) An EH must be actively enrolled in Medicaid in order to apply for the MMPIP program. If an EH wants to participate in MMPIP but is not listed as active in the MMIS, the provider must enroll, or clarify enrollment status with the Montana Medicaid fiscal agent, prior to continuing registration in the MMPIP program.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE VI Registration, Attestations and Certification (1) Upon receipt of notification from the CMS NLR of a Montana EP or EH registration, the department will accept the provider's request to register for the department's MMPIP program via secure web portal application.

(2) An EP must attest to qualifying patient volume threshold calculation as specified by 42 CFR 495.306 (2011), calculated as follows: (Total Medicaid (or needy individuals) Patient Encounters in any 90-day period in the review calendar Year) divided by (All Patient Encounters over the Same Period). Provider will submit the timeframe for the 90-day time period selected for the patient encounters measure, identify the source the information was obtained from, and submit the numerator and denominator with the resulting percentage for the Medicaid and/or needy patient volume.

(a) For all EPs except pediatricians, the minimum patient volume threshold is 30%. For pediatrician EPs, the minimum patient volume threshold is 20%.

(b) Group practices or clinics (GP/C) will be permitted to calculate patient volume at the GP/C level if all the following requirements are met:

(i) The GP/C patient volume is appropriate as a measure of patient volume for each EP;

(ii) Each EP working in the GP/C accepts Medicaid and/or needy individuals as patients;

(iii) There is an auditable data source to support the GP/C patient volume determination;

(iv) All EPs in GP/C use the same methodology for the payment year;

(v) The GP/C uses the entire practice or clinic's patient volume and does not limit patient volume in any way; and

(vi) If an EP works inside and outside of the GP/C practice, the patient volume calculation only includes patient encounters associated with the clinic or group practice, and not the EP's outside encounters.

(c ) EPs practicing at FQHC or RHC must demonstrate that more than 50% of their clinical encounters occurred at an FQHC/RHC over a six-month period and that a minimum of 30% of their patient volume consists of needy individuals. EPs practicing predominantly at FQHC/RHC must provide the clinic location, the needy patient encounters for the location, the EP's total patient encounters, and the resulting percentage. This information must be for an identified six-month period.

(3) An EP or EH will report the amount of nonstate or local funds for an EHR system received that coincides with the payment year being requested, or certify that it has not received nonstate or local funds for EHRs.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE VII REPORTING REQUIREMENTS IN FIRST AND SUBSEQUENT YEARS (1) For the first year of participation the EP or EH must provide proof of EHR certification as described in [New Rule VIII], identify the system and date and attest to the adoption, implementation, or upgrade of a certified EHR.

(2) During the second and subsequent years of participation an EP must meet 20 of 25 meaningful use objectives as defined in 42 CFR 495.6 (2011) and 42 CFR 495.8.

(3) During the second and subsequent years of participation an EH must meet 19 of 24 meaningful use objectives as defined in 42 CFR 495.6 (2011) and 42 CFR 295.8.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE VIII PROOF OF ELECTRONIC HEALTH RECORDS CERTIFICATION (1) Proof of EHR certification must be filed simultaneously with the provider's or hospital's attestation and certification. The attestation and certification will be verified prior to any payments being made. If a provider omits information necessary to determine eligibility or payment, the provider will be notified that participation in the MMPIP program is denied based on the omission of required information.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE IX COMMUNICATION WITH PROVIDERS (1) Upon notification by the CMS NLR that an EP or EH has applied for the MMPIP, and after initial verification of eligibility, the department will notify the provider of approval or denial of eligibility in the MMPIP program. All notifications regarding continued eligibility, payment, or other notifications will be done electronically.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE X APPLICATION FOR PAYMENTS BY AN ELIGIBLE PROVIDER OR ELIGIBLE HOSPITAL (1) An EP qualifying to receive payment must submit the following provider identification information:

(a) name;

(b) National Provider Identification Number (NPI);

(d) Taxpayer Identification Number (TIN).

(2) In addition to the information in (1), an EP practicing outside of a FQHC or RHC must certify or attest that:

(a) the EP is using a certified electronic health record;

(b) the EP meets the meaningful use requirement;

(c) the EP meets applicable patient volume thresholds and identifies the 90-day continuous reporting period of the previous calendar year;

(d) the EP furnished less than 90% of covered services in "place of service" codes 21 Inpatient, and 23 Emergency Room;

(e) in the first payment year, the EP must adopt, implement, upgrade, or demonstrate meaningful use over any continuous 90-day period in a calendar year; and

(f) during the second and subsequent years the EP must attest through submission of defined objectives and clinical quality measures use of the certified EHR.

(3) In addition to (1) an EP practicing in a FQHC or RHC must certify or attest that:

(a) the EP practices predominantly at an FQHC or RHC and that more than 50% of total patient encounters during a six-month period in the most recent calendar year occurred at the FQHC/RHC;

(b) the EP is using a certified EHR;

(d) the EP meets the needy patient volume threshold.

(4) An EH qualifying to receive payment must submit the following provider identification information:

(a) name;

(b) CMS Certification Number (CNN);

(d) Hospital Tax Identification Number.

(5) In addition to the information in (4), the EH must attest or certify that:

(a) the hospital is using a certified electronic health record;

(b) the average length of stay for patients at the facility is 25 days or fewer; and

(c) the hospital meets the 10% Medicaid Patient Volume threshold and identifies the associated 90-day continuous period for the federal fiscal year.

(6) In the first payment year, the EH must adopt, implement, upgrade, or demonstrate meaningful use over any continuous 90-day period in a calendar year.

(7) During the second and subsequent years the EH must attest through submission of defined objectives and clinical qualifying measures use of the certified EHR.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE XI ELIGIBLE PROVIDER INCENTIVE PAYMENT SCHEDULE (1) The department adopts and incorporates by reference the EP incentive payment schedule specified in 42 CFR 495.310 (2011), a copy of which is posted at www.medicaidprovider.hhs.mt.gov/providerpages/ehrincentives.shtml and may also be obtained by writing DPHHS Director's Office, PO Box 4210, Helena, MT 59604.

(2) Pediatricians who do not meet the 30% threshold, but meet the 20% threshold will receive reduced payments as specified in 42 CFR 495.310 (2011). Also, an EP's payment may be adjusted downward depending on net average allowable costs.

(3) Each year the EP will attest to the receipt of funds from sources other than state or local government to offset the cost of the certified electronic health record. If the EP received funds from other sources, the EP must identify the calendar year of receipt, the amount, and the source. For the first year, any amount over $29,000 will reduce the payment by a like amount. For years two through six any amount over $10,610 will reduce the payment by a like amount.

(4) Assignment of payment - EPs must choose either direct payment or may assign payment to the provider's group practice or clinic. If the EP is a member of a group and chooses to assign the incentive payment to the group, payment will be made to a group consistent with existing MMIS capabilities. If a member of a group chooses to retain the incentive payment, the payment will be made directly to the EP through an existing process in the MMIS. Due to existing MMIS limitations, Montana Medicaid will not make direct incentive payments to any entity (individual, group, or clinic) that is not recognized as a Montana Medicaid provider. For example, EHR system vendors are not recognized as Montana Medicaid providers, and as such cannot be assigned payment.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE XII ELIGIBLE HOSPITAL INCENTIVE PAYMENT CALCULATION (1) Payment of the EH's incentive payment will be made over a four year period with 50% of the amount paid in year one, 30% in year two, 20% in year three, and 10% in year four.

(2) The department adopts and incorporates by reference the formula to calculate an EH's incentive payment amount found in 42 CFR Part 495.310 (2011).

(3) Assignment of payment - a multisite hospital with one CMS certification number is considered one hospital for purposes of calculating payment. Payments will be made to EHS consistent with existing MMIS capabilities. Due to existing MMIS limitations, Montana Medicaid will not make direct incentive payments to any entity that is not recognized as a Montana Medicaid provider.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

NEW RULE XIII DENIALS AND APPEALS (1) A provider participating in the MMPIP and aggrieved by the department's denial of eligibility, incentive payments, demonstration of efforts to adopt, implement, upgrade, or meaningful use of certified EHR technology, may request a fair hearing in accordance with ARM 37.5.310.

AUTH: 53-6-113, MCA

IMP: 53-6-111, MCA

4. Statement of Reasonable Necessity. The Department of Public Health and Human Services (department) is proposing to adopt new rules to implement the Montana Medicaid Provider Incentive Program (MMPIP) to provide incentive payments to eligible health care and hospital providers who adopt, implement, or upgrade certified electronic health record (EHR) technology and demonstrate the meaningful use of such technology.

The Montana Medicaid program is administered by the department to provide health care to Montana's qualified low income and disabled residents. The nation's healthcare system is undergoing a transformation in an effort to improve quality, safety, and efficiency of care through advancements in the adoption, implementation, and upgrade of Electronic Health Record (EHR) technology and the creation of a statewide Healthcare Information Exchange (HIE). To help facilitate this, Congress passed the Health Information Technology for Economic and Clinical Health Act, or the "HITECH Act" that establishes programs under the direction of State Medicaid Agencies to provide incentive payments to qualifying healthcare providers for the "meaningful use" of certified EHR technology.

The Montana Medicaid EHR incentive program will provide incentive payments to eligible professional and hospital providers as they adopt, implement, or upgrade to certified EHR technology, and demonstrate the meaningful use of such technology. This incentive program is designed to encourage providers to improve health information technology capabilities and accelerate the use of EHRs in meaningful ways to help Montana improve the quality, safety, and efficiency of patient health care. The programs begin in 2011 and continue until 2021.

New Rule I

This rule is necessary to state the purpose of the MMPIP and assist the reader in understanding this subchapter.

New Rule II

This rule is necessary to define the technical terms used in the HITECH and the MMPIP.

New Rule III

This rule is necessary to state the requirement for participating providers to enroll in the CMS National Level Repository.

New Rule IV

This rule is necessary to state the criteria by which the department will verify that Eligible Provider (EPs) may participate in MMPIP.

New Rule V

This new rule is necessary to define the criteria by which the department will verify that Eligible Hospitals (EHs) may participate in MMPIP.

New Rule VI

This new rule is necessary to state the registration, attestation, and certification process required for EPs and EHs.

New Rule VII

This new rule is necessary to state the reporting requirements for EPs and EHs in the first and subsequent years of participation in the MMPIP.

New Rule VIII

This rule is necessary to state the requirement that participating providers must provide proof that the EHR implemented is federally certified.

New Rule IX

This rule is necessary to state that the department will notify participating providers regarding the status of their eligibility for the MMPIP.

New Rule X

This new rule is necessary to state the process by which participating providers will apply for incentive payments upon receipt of notification of eligibility in the MMPIP.

New Rule XI

This new rule is necessary to state the EP incentive payment schedule.

New Rule XII

This rule is necessary to state the EH incentive payment schedule.

New Rule XIII

This rule is necessary to state the appeal process used by participating providers with respect to the MMPIP.

Fiscal Impact

The payments to eligible providers and hospitals under MMPIP will be paid from $35 million federal funds only that do not require a state match. The state share of the administrative costs over the biennium is $120,000. Approximately 1,000 eligible providers and hospitals qualify for participation.

5. The department intends the proposed new rules to be applied retroactively to July 1, 2011. There is no negative impact to the enrollee or applicant affected by applying the new rules retroactively.

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) 444-4094; or e-mail [email protected], and must be received no later than 5:00 p.m., June 23, 2011.

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.

/s/ Geralyn Driscoll /s/ Anna Whiting Sorrell

Rule Reviewer Anna Whiting Sorrell, Director

Public Health and Human Services

Certified to the Secretary of State May 16, 2011