(1) Subject to the availability of funding, restrictions imposed by federal law, and the approval of the state plan by the Centers for Medicare and Medicaid Services (CMS), the department will pay, in addition to the Medicaid payments provided for in ARM 37.86.2806, 37.86.2905, 37.86.2907, 37.86.2912, 37.86.2916, 37.86.2918, 37.86.2920, 37.86.2924, 37.86.2925, 37.86.2928, 37.86.2943, and 37.86.2947, a Graduate Medical Education (GME) payment for the purpose of partially funding primary care and psychiatry residency programs for eligible hospitals located in Montana.

(2) Revenue for the GME payment will be generated through a transfer of funds from the Montana University System to the department through an Intergovernmental Transfer contract agreement. The transfer of funds from the University System will occur prior to July 31 of each year.

(3) The department will make an annual payment to each eligible hospital on or before August 31 of each year.

(a) The payment will be calculated based upon the eligible hospital's inpatient Medicaid utilization per year, as calculated in (4).

(b) If an eligible hospital reports no primary care or psychiatry resident full time equivalents (FTE) participating in the GME program for any given program year or portion thereof, the eligible hospital will not receive payment for those time periods of nonparticipation. FTE totals include residents conducting rural rotations. For purposes of this rule, a rural rotation is a period of one month where a primary care or psychiatry resident is working in a rural location, outside of their primary facility and urbanized area, with the express purpose of the resident being available to provide care to the rural area's patient population.

(4) To calculate an eligible hospital's GME payment, the department will:

(a) divide the total amount of GME funding, including federal match, by the total number of primary care and psychiatry resident full-time equivalents (FTE) participating in the program to establish the per-resident amount (PRA);

(b) divide the number of FTE residents at each eligible hospital by the total number of primary care and psychiatry resident FTEs at all eligible hospitals participating in the program to establish each hospital's resident FTE percentage;

(c) divide the eligible hospital's Medicaid inpatient days by its total inpatient days to determine each eligible hospital's Medicaid utilization percentage;

(d) multiply each eligible hospital's Medicaid utilization percentage by its resident FTE percentage and then add the results from all of the eligible hospitals to establish the weighted average Medicaid utilization percentage for all hospitals;

(e) divide an eligible hospital's Medicaid utilization percentage from (c) by the weighted Medicaid utilization percentage for all eligible hospitals to establish each eligible hospital's Medicaid utilization index;

(f) multiply the eligible hospital's Medicaid utilization index by the PRA in (a) to establish each eligible hospital's adjusted PRA; and

(g) multiply the eligible hospital's adjusted PRA by the number of resident FTEs at the hospital to determine the GME payment amount.

(5) The GME payment must comply with the following criteria:

(a) if the eligible hospital's cost of inpatient hospital services do not exceed the total Montana Medicaid allowed payments for inpatient care, the eligible hospital will receive a GME payment as calculated in (4);

(b) as-filed cost reports from eligible hospitals and information from the Medicaid paid claims database will be used for calculations;

(c) the GME payment must be for services derived from Medicaid paid claims. The dates of these services must occur within the eligible hospital's fiscal year end, and the hospital's fiscal year must be the year immediately prior to the payment date; and

(d) at the end of the contract period, the department will reconcile the total Medicaid payments including the Medicaid GME payments to ensure that the total of these payments do not exceed the Medicaid Upper Payment Limit (UPL) for the fiscal year.