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| Montana Administrative Register Notice 37-802 | No. 23 12/08/2017 | |
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BEFORE THE Department of Public health and human services of the STATE OF MONTANA
TO: All Concerned Persons
1. On July 7, 2017, the Department of Public Health and Human Services published MAR Notice No. 37-802 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 1043 of the 2017 Montana Administrative Register, Issue Number 13.
2. The department has amended the following rules as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:
37.34.3005 REIMBURSEMENT FOR SERVICES OF MEDICAID FUNDED DEVELOPMENTAL DISABILITIES HOME AND COMMUNITY-BASED SERVICES (HCBS) WAIVER PROGRAMS (1) remains as proposed. (2) The department adopts and incorporates by this reference the rates of reimbursement for the delivery of services and items available through each Home and Community-Based Services Waiver Program as specified in the Montana Developmental Disabilities Program Manual of Service Rates and Procedures of Reimbursement for Home and Community-Based Services (HCBS) 1915c 0208 and 0667 Waiver Programs, effective
37.86.3607 CASE MANAGEMENT SERVICES FOR PERSONS WITH DEVELOPMENTAL DISABILITIES, REIMBURSEMENT (1) Reimbursement for the delivery by provider entities of Medicaid funded targeted case management services to persons with developmental disabilities is provided as specified in the Montana Developmental Disabilities Program Manual of Service Reimbursement Rates and Procedures for Developmental Disabilities Case Management Services for Persons with Developmental Disabilities Who Are 16 Years of Age or Older or Who Reside in a Children's Community Home, dated (2) The department adopts and incorporates by this reference the Montana Developmental Disabilities Program Manual of Service Reimbursement Rates and Procedures for Developmental Disabilities Case Management Services for Persons with Developmental Disabilities Who Are 16 Years of Age or Older or Who Reside in a Children's Community Home, dated
AUTH: 53-6-113, MCA IMP: 53-6-101, MCA
3. 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: The department received many comments opposing the 3.47% reduction in Medicaid provider rates.
Response 1: The department has lowered the rate reduction from 3.47% to 2.99%, which will be effective January 1, 2018. The lowered rate reduction was achieved by implementing legislatively mandated funding reductions in Senate Bill (SB) 261 §§ 12 and 21. SB 261 § 12 included a 0.5% reduction to Medicaid benefits of $1,423,827, which is part of the rate reduction. The SB 261 § 21 reduction for Health Resources Division of $3,500,000 is included in the calculation of the rate reduction.
Comment 2: On July 26, 2017, the Legislative Children, Families, Health and Human Services Interim Committee (committee) notified the department that members of the committee objected to the proposal notice, pursuant to 2-4-305(9), MCA, although the committee did so without articulating any basis for its objection. On November 8, 2017, the committee adopted a formal written objection to the proposal notice, pursuant to 2-4-406(1), MCA, which set forth its reasons for objecting.
Response 2: As originally proposed, the effective date of the rate change would have been October 1, 2017. The department delayed the filing of its final notice in light of the committee’s objection pursuant to 2-4-305(9), MCA. The committee first set forth the bases for its objection in its formal objection adopted November 8, 2017, pursuant to 2-4-406(1), MCA. Pursuant to 2-4-406(2), MCA, the department is permitted to submit to the committee its response to the written objection, after which the committee may withdraw its objection.
Comment 3: The department received comments that its interpretation of HB 2 and SB 261 is contrary to legislative intent. Response 3: The department decreased the rate reduction from the proposed 3.47% cut to a 2.99% cut. The department does not agree with the commenters that its interpretation of House Bill 2 of the regular session (HB 2) or SB 261 is contrary to legislative intent.
Legislative Intent:
Section 17-7-138(1)(a), MCA, provides: "Expenditures by a state agency must be made in substantial compliance with the budget approved by the legislature. Substantial compliance may be determined by conformity to the conditions contained in the general appropriations act and to legislative intent as established in the narrative accompanying the general appropriations act."
The department considered the following factors while calculating the 2.99% provider rate decrease:
a. Legislative intent as adopted in the legislative fiscal analyst narrative (Legislative Fiscal Report) located at http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2019/fiscal-publications.asp;
b. Conditions contained in Senate Bill (SB) 261 (Note: In the special session the legislature amended and revised HB 2 by incorporating legislative changes from the 2017 regular session that were made by several bills, including SB 261. In doing so, the legislature intended the incorporated changes to reflect current law before the special session commencing November 14, 2017.); and
c. The amount of time available to achieve the required spending reductions.
The department's proposed provider rates were based on legislative appropriations: The department calculated the 2.99% rate decrease based on the money the legislature appropriated to spend for the following programs: Medicaid provider services (MAR Notice No. 37-788); targeted case management services (MAR Notice No. 37-801); developmental disabilities program services that were available through the 1915c, 0208 and 0667 Home and Community Based Waiver programs (MAR Notice No. 37-802); and nursing facility reimbursement rates (MAR Notice No. 37-805).
SB 261
SB 261 revised Montana's state budgeting law. SB 261 reduced appropriations if actual state revenue was less than thresholds the legislature established in SB 261.
Section 21(1) of SB 261 provides as follows: If the amount of the certified unaudited state general fund revenue and transfers into the general fund received at the end of fiscal year 2017 is less than $2,192,000,000, as determined by the state treasurer on or before August 15, 2017, and if House Bill No. 2 is passed and approved, then the department of public health and human services general fund appropriation for "Health Resources Division" in House Bill No. 2 is reduced by $3,500,000 in fiscal year 2018 and $3,500,000 in fiscal year 2019.
Section 21(3) of SB 261 provides as follows: The legislature intends that the appropriation reduction in subsections (1) and (2) be used to reduce Medicaid provider rates over the 2019 biennium.
Section 21(4) of SB 261 provides as follows: The appropriation reductions in subsections (1) and (2) are in addition to the across-the-board reduction in general fund appropriations in [section 12].
Section 12(1) of SB 261 provides as follows: If the amount of the certified unaudited state general fund revenue and transfers into the general fund received at the end of fiscal year 2017 is less than $2,204,000,000, as determined by the state treasurer on or before August 15, 2017, and if House Bill No. 2 is passed and approved [section 11 of House Bill No. 2] must be amended as follows:
Section 11. Appropriations -- reduced appropriations for certain fiscal year 2019 general fund appropriations. (1) All general fund appropriations in this section for fiscal year 2019, excluding the appropriations for K-12 BASE Aid, Reimbursement Block Grants, State Tuition Payments, Transportation, Natural Resource Development K-12 School Facilities Payment, Special Education, and the Coal-Fired Generating Unit Closure Mitigation Block Grant are reduced by 0.5%.
The 2.99% decrease in provider rates is calculated as follows:
Appropriation reductions in SB 261
SB 261, Section 12, amends HB 2, §11 to reduce Medicaid general fund appropriations by 0.5% or -$1,423,827
SB 261, Section 21, reduces the appropriation for the Health Resources Division by -$3,500,000 Total reduction -$4,923,827
Total federal funds lost due to general fund appropriation reduction -$9,331,608
Total required cost reduction in SFY 2018 -$14,255,435
Projected expenditures for impacted Medicaid provider types $954,922,507
Rate reduction required to achieve reduction in 12 months 1.49% Rate reduction required to achieve reduction in 6 months 2.99%
The earliest the department can implement the rate reductions is January 1, 2018. Therefore the rate reduction implemented in this notice, in accordance with legislative intent as previously described, is 2.99%.
Comment 4: Instead of cutting Medicaid rates, why doesn't the department cut employees, facilities, programs, and operating costs?
Response 4: The department has numerous cost reduction measures in place including staff reductions. The Legislature reduced the department's total personnel services budget by 6.3% in HB 2 and SB 261. The department has limited its hiring to essential positions since April of 2017 to achieve this cost constraint. In addition, there is a 1.7% reduction in non-Medicaid general fund appropriations included in HB 2. Cost constraints in operating costs, facilities, and other department programs have been implemented to achieve this requirement. These appropriation reductions and corresponding cost constraints are separate and distinct from the proposed Medicaid provider rate reduction discussed in this notice.
The department continues to look for cost savings in facilities, programs and operating costs, but it has not identified any additional savings that would not adversely impact citizens.
Comment 5: Provider rate reductions will increase Medicaid expenditures in higher cost usages, such as emergency room visits, inpatient hospitalizations, and the state psychiatric facility.
Response 5: The department does not agree that an across-the-board 2.99% rate reduction will significantly impact access. See response to comment 7. The department's analysis shows that Medicaid members will continue to receive medical care and services despite the rate reduction; therefore the rate reduction will not cause increased use of higher cost services.
Comment 6: Why did the department reduce all rates by a uniform amount instead of evaluating each program's reimbursement rates?
Response 6: Evaluating and adjusting each program's reimbursement rates would have been time consuming and costly and would not result in rate changes that were significantly different than the uniform reduction. Instead of evaluating each program, the department calculated a uniform rate reduction based on the amount of the budget reductions in SB 261, the time needed to recover the amount of the budget reductions, and the specific instructions in SB 261, Section 21. Acting promptly is important because the reduction must be made during SFY 2018. A percentage rate reduction can be smaller if the total is recovered over a longer period of time. The uniform reduction is a reasonable, non-biased solution.
Comment 7: The department received several comments stating that rate reductions will cause more providers to refuse Medicaid patients, reducing access to services, and affecting quality of care.
Response 7: The new rates are consistent with efficiency, economy, and quality of care. The rates are sufficient to enlist enough Medicaid providers so that care and services through the Montana Medicaid program are available to the extent that such care and services are available to the general population in the geographic area.
Comment 8: The department received several comments that rate reductions will detrimentally impact small businesses.
Response 8: The department agrees that all rate reductions detrimentally impact providers, including small businesses; however the requirements of 2-4-111, MCA, are not triggered by the rate change. Section 2-4-111, MCA, requires state agencies to determine if a proposed rule will significantly and directly impact small businesses. For purposes of 2-4-111, MCA, a small business is defined as "a business entity, including its affiliates, that is independently owned and operated and that employs fewer than 50 full-time employees." Section 2-4-102 (13), MCA. The Governor's Office of Economic Development (GOED) has interpreted “small business” to mean privately owned, for-profit entities. (July 22, 2013, memorandum from GOED).
Although the proposed rate decreases do not significantly and directly impact small businesses, as defined in statute, the department included statements of the fiscal impact on providers in its notice of proposed amendment. Because the rate decrease is required by law there are no alternatives to identify.
Comment 9: The department received comments that the legislature intended the provider rate cut in SB 261 to be 1%.
Response 9: The department does not agree that a 1% Medicaid provider rate reduction represents the entirety of legislative intent. Section 21 of SB 261 requires a provider rate reduction evenly spread across applicable providers to achieve a $3,500,000 annual general fund cost reduction. If implemented over a 12-month period, the $3,500,000 reduction in Section 21 alone would result in an approximate 1% provider rate reduction. Section 21, however, is just one of several components of reductions in SB 261. In addition to Section 21, this rule also implements other reductions mandated by SB 261. See response to comment 1.
Comment 10: One commenter disagreed with politicians balancing the budget on the backs of poor, old, or disabled. A family member is already not receiving care he is supposed to be receiving.
Response 10: The department thanks the commenter for the comment. The department is trying to minimize the impact of reduced funding but funding decisions are made by the Montana Legislature and the department is required to operate within the Legislature’s appropriations.
Quality of care issues are within the authority of the department, however. The commenter, and any other interested person, is urged to bring any quality of care issues to the department's attention either by contacting the Developmental Disabilities Program directly or contacting the regional offices.
Comment 11: One commenter stated that they have previously submitted optional solutions to DPHHS regarding rule/policy change in lieu of cuts and received no response.
Response 11: The department thanks the commenter for the comment. All suggestions are appreciated and it is the department's practice to consider all suggestions. While not all suggestions can be implemented, the department regrets that the commenter did not receive a response and urges the commenter to continue to contact the department.
Comment 12: One commenter stated that they are concerned that unlicensed individuals without proper education will provide therapeutic services.
Response 12: The department thanks the commenter for their concern. Therapeutic services must be provided by qualified individuals. If applicable, license and qualification requirements are established by statute, administrative rule, and professional licensing requirements. The department and its providers must comply with those requirements.
Comment 13: One commenter stated that the proposed rules imply that program design and monitoring and children's autism trainer services will end July 1, 2017, and that the Developmental Disabilities Program has not stated, in writing, a plan to continue those services using other funding sources.
Response 13: The department thanks the commenter for the comment. Children's autism services will continue to be available as a new state plan service. These services are being implemented through a separate rule adoption notice from this rulemaking.
Comment 14: One commenter commented that rates will have an effect on the efficiency, economy, and quality of care and requested a genuine explanation of how the department's federal mandate to ensure access, quality and client choice are being met given that providers are unable to recruit and retain direct care workers to provide services.
Response 14: The department thanks the commenter for the comment. 42 U.S.C. § 1396a(a)(30)(A) requires a state to assure Medicaid payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available. SB 261 reduced the general fund appropriation for targeted case management in the Addictive and Mental Disorder Division and Developmental Services Division. The department is required to follow the funding directions of the Legislation. There has been no loss of contractors. There continues to be new contractor enrollment. There are ongoing inquiries from potential new contractors. The department does not expect that there will be a loss of access or quality at the rates being adopted.
Comment 15: One commenter requested the department reconsider the removal or reduction of speech language therapy in regard to autism.
Response 15: The department thanks the commenter for the comment. Speech and language therapy remain available as Medicaid state plan services.
4. These rule amendments are effective January 1, 2018.
/s/ Francis X. Clinch /s/ Sheila Hogan Francis X. Clinch Sheila Hogan, Director Rule Reviewer Public Health and Human Services
Certified to the Secretary of State November 27, 2017. |
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