(1) All hospitals meeting the eligibility requirements in ARM 37.86.2940 will receive a hospital reimbursement adjustor (HRA) payment. The payment consists of two separately calculated amounts. In order to maintain access and quality in the most rural areas of Montana, critical access hospitals will receive both components of the HRA. All other hospitals will receive only Part 1, as defined in (2)(a). Eligibility for an HRA payment will be determined based on a hospital's year-end reimbursement status.

(2) Part 1 of the HRA payment will be based upon Medicaid inpatient utilization, and will be computed as follows: HRA1 = (M ÷ D) x P.

(a) For the purposes of calculating Part 1 of the HRA, the following apply:

(i) "HRA1" represents the calculated Part 1 HRA payment.

(ii) "M" equals the number of Medicaid inpatient days provided by the hospital for which the payment amount is being calculated.

(iii) "D" equals the total number of Medicaid inpatient days provided by all hospitals eligible to receive an HRA payment.

(iv) "P" equals the total amount to be paid via Part 1 of the HRA. "P" consists of a state-paid amount plus the applicable federal financial participation (FFP). The portion of "P" that is paid by the state will equal the amount of revenue generated by Montana's hospital utilization fee, less all of the following:

(A) 4% of the total revenue generated by the hospital utilization fee, which will be expended as match for continuity of care adjustor payments, as provided in ARM 37.87.1224; and

(B) 8% of the total revenue generated by the hospital utilization fee, which will be expended as match for Part 2 of the HRA, as provided in (3).

(3) Part 2 of the HRA payment will be based upon total hospital Medicaid charges, and will be computed as follows: HRA2 = (I ÷ D) x P.

(a) For the purposes of calculating Part 2 of the HRA, the following apply:

(i) "HRA2" represents the calculated Part 2 HRA payment.

(ii) "I" equals the total hospital charges from Medicaid paid claims for which Montana Medicaid was the primary payer for the hospital for which the payment is being calculated.

(iii) "D" equals the total hospital charges from Medicaid paid claims for which Montana Medicaid was the primary payer for all hospitals eligible to receive Part 2 of the HRA payment.

(iv) "P" equals the total amount to be paid via Part 2 of the HRA. "P" will be 8% of the total revenue generated by Montana's hospital utilization fee plus applicable FFP.

(b) The numbers used in (2) through (3)(a)(iv) must be from the department's paid claims data for the most recent calendar year.

(c) For hospitals that have not been operating for two full calendar years when the HRA payments are calculated, the department may use Medicaid paid claim data from a partial or more recent 12-month period or both in order to make the calculations.