BEFORE THE DEPARTMENT OF PUBLIC

HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

 

In the matter of the amendment of ARM 37.86.2803, 37.86.2907, and 37.86.2925 pertaining to Medicaid inpatient hospital services

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO:  All Concerned Persons

 

            1.  On November 16, 2011, 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 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 November 9, 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 amended provide as follows, new matter underlined, deleted matter interlined:

 

            37.86.2803  ALL HOSPITAL REIMBURSEMENT, COST REPORTING

            (1)  Allowable costs will be determined in accordance with generally accepted accounting principles as defined by the American Institute of Certified Public Accountants.  Such definition of allowable costs is further defined in accordance with the Medicare Provider Reimbursement Manual, CMS Publication 15 Transmittal 21 25 last updated January 2010 April 2011, subject to the exceptions and limitations provided in the department's administrative rules.  The department adopts and incorporates by reference Pub. 15, which is a manual published by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), which provides guidelines and policies to implement Medicare regulations which set forth principles for determining the reasonable cost of provider services furnished under the Health Insurance for Aged Act of 1965, as amended.  A copy of Publication 15 may be obtained through the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT  59620-2951.

            (a) through (3)(a) remain the same.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:     53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-149, MCA

 

            37.86.2907  INPATIENT HOSPITAL PROSPECTIVE REIMBURSEMENT, APR-DRG PAYMENT RATE DETERMINATION  (1)  The department's APR-DRG prospective payment rate for inpatient hospital services is based on the classification of inpatient hospital discharges to APR-DRGs.  The procedure for determining the APR-DRG prospective payment rate is as follows:

            (a)  Effective July January 1st of each year, the department will assign an APR-DRG to each Medicaid client discharge in accordance with the current APR-grouper program version, as developed by 3M Health Information Systems.  The assignment and reimbursement of each APR-DRG is based on:

            (i) through (b) remain the same.

            (c)  The department computes a Montana average base price per case.  This base price includes in-state and out-of-state distinct part rehabilitation units and long term care (LTC) facilities.  Effective August 1, 2011 January 1, 2012 the average base price, including capital expenses, is $4,129 $4,200.  Disproportionate share payments are not included in this price.

            (i)  The average base price for Center of Excellence hospitals, including capital expenses, is $6,890 $6,900.  Disproportionate share payments are not included in this price.

            (d) and (e) remain the same.

            (2)  The Montana Medicaid APR-DRG relative weight values, average national length of stay (ALOS), and outlier thresholds are contained in the APR-DRG Table of Weights and Thresholds (effective July 1, 2010 January 1, 2012) published by the department.  The department adopts and incorporates by reference the APR-DRG Table of Weights and Thresholds (effective July 1, 2010 January 1, 2012).  Copies may be obtained from the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:     2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2925  INPATIENT HOSPITAL REIMBURSEMENT,

DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS  (1) through (3) remain the same.

            (a)  The department will submit an independent certified audit to CMS for each completed Medicaid state plan rate year, consistent with 42 CFR Part 455, Subpart D.

            (b)  To the extent that audit findings demonstrate that disproportionate share hospital (DSH) payments exceed the documented hospital-specific limits, the department will collect overpayments and redistribute DSH payments.

            (c)  Beginning with state fiscal year (SFY) 2011, based on audit findings, should the department determine that there is an overpayment to a provider, the department will:

            (i)  recover the overpayment from the provider;

            (ii)  redistribute the amount in overpayment to providers that had not exceeded the hospital-specific limit during the period in which the DSH payments were determined; and

            (iii)  ensure all payments will be subject to hospital-specific limits.

            (d)  Should the DSH overpayment exceed the aggregate hospital-specific limit, the federal amount of overpayment will be returned to the Center for Medicare and Medicaid Services (CMS).

            (e)  Beginning with SFY 2011, facilities choosing nonparticipation in the annual DSH audit will forfeit 100% of their DSH payment allocated for that year.  This allocation will be deemed an overpayment and will be recovered from the provider.

            (f)  Disproportionate share payments must not exceed the DSH state allotment, except as otherwise required by the Social Security Act.  In no event is the department obligated to use state Medicaid funds to pay more than the state Medicaid allotment of DSH payments due a provider.

            (4)  Eligibility for routine disproportionate share hospital DSH and supplemental disproportionate share hospital DSH payments will be determined based on a provider's year-end reimbursement status. 

            (5)  If at any time during an audit, the department discovers evidence suggesting fraud or abuse by a provider, that evidence, in addition to the department's final audit report regarding that provider, will be referred to the Medicaid Fraud Unit.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:     2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            4.  Statement of Reasonable Necessity

 

The Department of Public Health and Human Services (the department) is proposing amendments to ARM 37.86.2803, 37.86.2907, and 37.86.2925 pertaining to Medicaid Inpatient Hospital Services.

 

ARM 37.86.2803

 

The department is updating this rule because the Centers for Medicare and Medicaid Services (CMS) publication, Medicare Provider Reimbursement Manual, was updated to the current transmittal number (25), and current effective date of April, 2011.  The proposed amendments to ARM 37.86.2803 are necessary to update a reference to a federal publication.  It is necessary to refer to the most recent version of the publication to ensure that the department and providers are utilizing the most current federal standards and are in compliance with these requirements.

 

ARM 37.86.2907

 

The department is making the following changes to this rule:  the date, July 1, is being changed to January 1 of each year.  This is the date the department assigns an "all patient refined diagnosis related groups" (APR-DRG) to each Medicaid client discharge in accordance with the current APR-grouper; the Montana average base rate is changing from $4,129 to $4,200; and the base rate for hospitals designated as Centers of Excellence is changing from $6,890 to $6,900.

 

It is necessary for the department to change the date as to when the department will assign an APR-DRG to each Medicaid client discharge as this change in date will coincide with the update to the APR grouper.  The APR grouper is updated in January of each year and is the tool used to assign each APR-DRG to each discharge.

 

The department finds it is necessary to change the hospital base rates which will offset the reduced weights that take effect with the new APR grouper.

 

ARM 37.86.2925

 

Language was added to clarify how the department will collect "disproportionate share payments" (DSH) overpayments and redistribute DSH payments based upon audit findings.  It is necessary for the department to add this language to rule as DSH audits are required by CMS.  The added language will clarify to providers how the department will collect any overpayments and address the redistribution of these overpayments.

 

Fiscal Impact

 

The department proposes to increase inpatient hospital base rates effective January 1, 2012.  Even though rate increases are proposed, these proposed increases will have a budget neutral effect on the Medicaid budget for state fiscal year (SFY) 2012.  For each APR-DRG, the department determines a relative weight using a national data base.  These relative weights will be re-centered to offset the proposed increase in base rates.  Because of this, there will not be any fiscal impact.  The revisions in ARM 37.86.2803 and 37.86.2925 will also have no fiscal impact.

 

The proposed changes will affect approximately 372 inpatient hospital providers both in and out of state.  Services provided to Medicaid clients will not be affected.

 

            5.  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 [email protected], and must be received no later than 5:00 p.m., November 25, 2011.

 

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

 

7.  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 5 above or may be made by completing a request form at any rules hearing held by the department.

 

8.  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.

 

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

 

 

/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 October 17, 2011.