(1) For purposes of this rule, the following definitions apply:

(a) "Anesthesia units" means time and base units used to compute reimbursement under RBRVS for anesthesia services. Base units are those units as defined by the Medicare program. Time units are 15 minute intervals during which anesthesia is provided.

(b) "Conversion factor" means a dollar amount by which the relative value units, or the base and time units for anesthesia services, are multiplied in order to establish the RBRVS fee for a service. Effective July 1, 2008 there are four conversion factor categories. They are:

(i) physician services, which applies to the following health care professionals listed in (2): physicians, mid-levels, podiatrists, public health clinics, independent diagnostic testing facilities, nutrition providers, QMB and EPSDT chiropractors, and dentists rendering medical procedures. The conversion factor for physician services for state fiscal year 2010 is $40.09;

(ii) allied services, which applies to the following health care professionals listed in (2): physical therapists, occupational therapists, speech therapists, optometrists, opticians, audiologists, and school-based services. The conversion factor for allied services for state fiscal year 2010 is $30.39;

(iii) mental health services, which applies to the following health care professionals listed in (2): psychologists, licensed clinical social workers, and licensed professional counselors. The conversion factor for mental health services for state fiscal year 2010 is $24.26; and

(iv) anesthesia services, which applies to anesthesia services. The conversion factor for anesthesia services for state fiscal year 2010 is $27.55.

(c) "Conversion factor category" means the four categories of providers for purposes of calculating Medicaid fees. The categories are physician services, allied services, mental health services, and anesthesia services.

(d) "Policy adjustor" means a factor by which the product of the relative value units and the conversion factor is multiplied to increase or decrease the fees paid by Medicaid for certain categories of services.

(e) "Provider rate of reimbursement adjustment" means the change to the RBRVS fee calculated for a procedure based on the health care professional delivering the service.

(f) "Rate variable" means a multiplier in the rate equation, such as a policy adjustor, a provider rate of reimbursement, or pricing modifier, that changes the RBRVS rate for a procedure or service.

(g) "RBRVS fee" for a covered procedure means the amount calculated by multiplying the relative value units (or the base and time units for anesthesia services) for the procedure by the appropriate conversion factor. If applicable, a rate variable may be applied to the RBRVS fee to calculate the Montana Medicaid fee for the procedure.

(h) "Relative value unit (RVU)" means a numerical value assigned in the resource based relative value scale to each procedure code used to bill for services provided by a health care provider. The relative value unit assigned to a particular code expresses the relative effort and expense expended by a provider in providing one service as compared with another service.

(i) "Resource based relative value scale (RBRVS)" means the most current version of the Medicare resource based relative value scale contained in the physicians' Medicare Physician Fee Schedule adopted by the Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health and Human Services and published at 73 Federal Register 224, 69726 (November 19, 2008), effective January 1, 2009 which is adopted and incorporated by reference. A copy of the Medicare Physician Fee Schedule 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. The RBRVS reflects RVUs for estimates of the actual effort and expense involved in providing different health care services.

(j) "Subsequent surgical procedure" means any additional surgical procedure or service, except for add-ons and modifier 51 exempt codes, performed after a primary operation in the same operative session.

(2) Services provided by the following health care professionals will be reimbursed in accordance with the RBRVS methodology set forth in (3):

(a) physicians;

(b) mid-level practitioners;

(c) podiatrists;

(d) physical therapists;

(e) occupational therapists;

(f) speech therapists;

(g) audiologists;

(h) optometrists;

(i) opticians;

(j) providers of clinic services;

(k) providers of EPSDT services;

(l) licensed psychologists;

(m) licensed clinical social workers;

(n) licensed professional counselors;

(o) dentists providing medical services;

(p) providers of oral surgery services;

(q) providers of pathology and laboratory services;

(r) independent diagnostic testing facilities (IDTF);

(s) school based services; and

(t) QMB and EPSDT chiropractic services.

(3) Except as set forth in (8) through (12)(a)(vi), the RBRVS fee for a covered service is calculated by multiplying the RVUs determined in accordance with (7) through (7)(a)(ii)(C) (or the base and time units for anesthesia services) by the conversion factor, which is required to achieve the overall budget appropriation for provider services made by the Montana Legislature in the most recent legislative session. The RBRVS fee may also be multiplied by a rate variable to calculate the fee paid by Medicaid.

(4) The conversion factor for physician services is calculated as stated in sections 53-6-124 through 126, MCA. The conversion factor for allied services, mental health services, and anesthesia services is calculated as follows:

(a) The total RVUs for the prior period is calculated as the sum of the product of the RVUs for a procedure code multiplied by the number of times the procedure code was paid in a prior period.

(b) The total RVUs for the prior period is multiplied by the projected change in utilization to estimate utilization during the appropriation period.

(c) The Montana Legislature's appropriation for the period is divided by the estimated utilization for the period to calculate the conversion factor.

(d) The RVU assigned to each procedure code is multiplied by the appropriate conversion factor to calculate the RBRVS fee for a particular procedure code.

(5) For state fiscal year 2010, policy adjustors will be used to accomplish the targeted funding allocations. The department's list of services affected by policy adjustors through July 1, 2009 is adopted and incorporated by reference. The list is available from the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

(6) The 61st Legislature appropriated additional funds for state fiscal year 2010. For provider services identified in (2) there will be $1,065,121 additional funds.

(7) The RVUs for most services are adopted from the resource based RBRVS. For services for which the RBRVS does not specify RVUs, the department sets those RVUs as follows:

(a) The RVUs for a Medicaid covered service provided by any of the provider types specified in (2) are calculated as follows:

(i) if Medicare sets RVUs, the Medicare RVUs are applicable;

(ii) if Medicare does not set RVUs but Medicaid sets RVUs, the Medicaid RVUs are set in the following manner:

(A) convert the existing dollar value of a fee to an RVU value;

(B) evaluate the RVU of similar services and assign an RVU value; or

(C) convert the average by report dollar value of a fee to an RVU value.

(8) Except for physician administered drugs as provided in ARM 37.86.105(4), clinical, laboratory services, and anesthesia services, if neither Medicare nor Medicaid sets RVUs, then reimbursement is by report.

(a) Through the by report methodology the department reimburses a percent of the provider's usual and customary charges for a procedure code where no fee has been assigned. The percentage is determined by dividing the previous state fiscal year's total Medicaid reimbursement for RBRVS provider covered services by the previous state fiscal year's total Medicaid billings.

(b) For state fiscal year 2010, the by report rate is 46% of the provider's usual and customary charges.

(9) For clinical laboratory services for which there is an established fee:

(a) the department pays the lower of the following for procedure codes with fees:

(i) the provider's usual and customary charges for the service; or

(ii) 60% of the Medicare fee schedule for physician offices and independent labs and hospitals functioning as independent labs; or

(iii) the established Medicaid fee.

(b) for clinical laboratory services for which there is no established fee, the department pays the lower of the following for procedure codes without fees:

(i) the provider's usual and customary charges for the service;

(ii) the rate established using the by report methodology; or

(A) for purposes of (9)(b) through (9)(b)(iii), the by report methodology means averaging 50 paid claims for the same code that have been submitted within a 12 month span and then multiplying the average by the amount specified in (8)(b).

(iii) the historical comparative value of the procedure as indicated by the reimbursement amount paid by Medicaid and other third party payors for the same procedure within the last 12 months.

(10) For anesthesia services the department pays the lower of the following for procedure codes with fees:

(a) the provider's usual and customary charges for the service;

(b) a fee determined by multiplying the anesthesia conversion factor by the sum of the applicable base and time units, and then multiplying the product by the applicable policy adjustor, if any;

(c) the department pays the lower of the following for procedure codes without fees:

(i) the provider's usual and customary charges for the services; or

(ii) the by report rate.

(11) For providers listed at ARM 37.85.212(2) billing for durable medical equipment, prosthetics, orthotics, and medical supplies (DMEPOS), except for the bundled items as provided in (13); the department pays:

(a) the fee listed on the Medicaid fee schedule as provided in ARM 37.86.1807; or

(b) if there is no fee in (11)(a), the amount determined by multiplying the by report rate provided in (8)(b) by the billed charges.

(12) Subject to the provisions of (12)(a), when billed with a modifier, payment for procedures established under the provisions of (7) is a percentage of the rate established for the procedures.

(a) The methodology to determine the specific percent for each modifier is as follows:

(i) The department obtains information from Medicare and other third party payers regarding the comparative value utilized for payment of procedures billed with modifiers.

(ii) The department establishes a specific percentage for each modifier based upon the purpose of the modifier, the comparative value of the modified service and the medical insurance industry trend of reimbursement for the modifier.

(iii) The department's list of the specific percents for the modifiers used by Medicaid as amended through July 1, 2009 is adopted and incorporated by reference. A copy of the list is available on request from the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

(iv) Notwithstanding any other provision, procedure code modifiers "80", "81", "82", and "AS", used by assistant surgeons shall be reimbursed at 16% of the department's fee schedule.

(v) Notwithstanding any other provision, procedure code modifier "62" used by cosurgeons shall be reimbursed at 62.5% of the department's fee schedule for each cosurgeon.

(vi) Notwithstanding any other provision, subsequent surgical procedures shall be reimbursed at 50% of the department's fee schedule.

(13) In applying the RBRVS methodology set forth in this rule, Medicaid reimburses in accordance with Medicare's policy on the bundling of services, as set forth in the physicians' Medicare fee schedule adopted by CMS and published in the Federal Register annually, whereby payment for certain services constitutes payment for certain other services which are considered to be included in those services.

(14) Providers must bill for services using the procedure codes and modifiers set forth, and according to the definitions contained in the Federal Health Care Administration's Common Procedure Coding System (HCPCS). Information regarding billing codes, modifiers, and HCPCS is available upon request from the Health Resources Division at the address previously stated in this rule.