WSR 03-22-089

PROPOSED RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES
(Medical Assistance Administration)

[ Filed November 5, 2003, 10:55 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 02-24-010.

Title of Rule: Chapter 388-500 WAC, Medical definitions.

Purpose: To update the definition of "medical necessity" in order to incorporate the use of medical information that is supported by scientific evidence in its determination of services. To include definitions for new or existing terms that may be necessary to clearly define "medically necessary." To ensure consistency with the medical definitions and WAC 388-501-0165. To carry out the directives of ESHB 1299.PL, an act relating to evidence-based health services purchasing by state purchased health care programs.

Statutory Authority for Adoption: RCW 74.08.090, ESHB 1299 (chapter 276, Laws of 2003).

Statute Being Implemented: RCW 74.08.090, ESHB 1299 (chapter 276, Laws of 2003).

Summary: See Purpose above.

Reasons Supporting Proposal: See Purpose above.

Name of Agency Personnel Responsible for Drafting: Ann Myers, P.O. Box 45533, Olympia, WA 98504, (360) 725-1345; Implementation and Enforcement: Bill Hagens, P.O. Box 45500, Olympia, WA 98504, (360) 725-1337.

Name of Proponent: Department of Social and Health Services, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The rule amends the definition of "medical necessity" and related rules.

The rule is being amended to include the use of scientific evidence in the department's coverage and service determinations; to help ensure the department's clients will not be harmed or injured by inappropriate service utilization in view of the robust development and availability of new drugs, treatments, and therapies; to help ensure that available resources be spend in the most effective manner to improve the health of clients; and to help expedite service determinations.

The anticipated effects are as stated above.

Proposal Changes the Following Existing Rules: The rule described in Title of Rule and Purpose above is being amended to include a reference to scientific evidence, include definitions related to the new definition of "medical necessity."

No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has analyzed the proposed rule and concludes that it will not have a more than minor impact on the small businesses affected by it.

RCW 34.05.328 applies to this rule adoption. The department has analyzed the proposed rule and concludes that it meets the definition of a "significant legislative rule" as defined by the legislature. An analysis of the probable costs and probable benefits is available from the person listed above.

Hearing Location: Blake Office Park (behind Goodyear Courtesy Tire), 4500 10th Avenue S.E., Rose Room, Lacey, WA 98503, on December 9, 2003, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Andy Fernando, DSHS Rules Coordinator, by December 5, 2003, phone (360) 664-6094, TTY (360) 664-6178, e-mail fernaax@dshs.wa.gov.

Submit Written Comments to: Identify WAC Numbers, DSHS Rules Coordinator, Rules and Policies Assistance Unit, mail to P.O. Box 45850, Olympia, WA 98504-5850, deliver to 4500 10th Avenue S.E., Lacey, WA, fax (360) 664-6185, e-mail fernaax@dshs.wa.gov, by 5:00 p.m., December 9, 2003.

Date of Intended Adoption: Not sooner than December 10, 2003.

October 30, 2003

Brian H. Lindgren, Manager

Rules and Policies Assistance Unit

3327.1
AMENDATORY SECTION(Amending Order 3913, #100246 [WSR 98-15-066], filed 7/13/98, effective 7/30/98)

WAC 388-500-0005   Medical definitions.   Unless defined in this chapter or in other chapters of the Washington Administrative Code, use definitions found in the Webster's New World Dictionary. This section contains definitions of words and phrases the department uses in rules for medical programs. Definitions of words used for both medical and financial programs are defined under WAC 388-22-030.

"Assignment of rights" means the client gives the state the right to payment and support for medical care from a third party.

"Base period" means the time period used in the limited casualty program which corresponds with the months considered for eligibility.

"Beneficiary" means an eligible person who receives:

((*)) (1) A federal cash Title XVI benefit; and/or

((*)) (2) State supplement under Title XVI; or

((*)) (3) Benefits under Title XVIII of the Social Security Act.

"Benefit period" means the time period used in determining whether Medicare can pay for covered Part A services. A benefit period begins the first day a beneficiary is furnished inpatient hospital or extended care services by a qualified provider. The benefit period ends when the beneficiary has not been an inpatient of a hospital or other facility primarily providing skilled nursing or rehabilitation services for sixty consecutive days. There is no limit to the number of benefit periods a beneficiary may receive. Benefit period also means a "spell of illness" for Medicare payments.

"Cabulance" means a vehicle for hire designed and used to transport a physically restricted person.

"Carrier" means:

((*)) (1) An organization contracting with the federal government to process claims under Part B of Medicare; or

((*)) (2) A health insurance plan contracting with the department.

"Categorical assistance unit (CAU)" means one or more family members whose eligibility for medical care is determined separately or together based on categorical relatedness.

"Categorically needy" means the status of a person who is eligible for medical care under Title XIX of the Social Security Act. See WAC 388-503-0310, chapter 388-517 WAC and WAC 388-523-2305.

"Children's health program" means a state-funded medical program for children under age eighteen:

((*)) (1) Whose family income does not exceed one hundred percent of the federal poverty level; and

((*)) (2) Who are not otherwise eligible under Title XIX of the Social Security Act.

"Coinsurance-Medicare" means the portion of reimbursable hospital and medical expenses, after subtraction of any deductible, which Medicare does not pay. Under Part A, coinsurance is a per day dollar amount. Under Part B, coinsurance is twenty percent of reasonable charges.

"Community services office (CSO)" means an office of the department which administers social and health services at the community level.

"Cost-effective" means that the benefits and harms relative to costs represent an economically efficient use of resources. Cost-effective does not necessarily mean lowest price.

"Couple" means, for the purposes of an SSI-related client, an SSI-related client living with a person of the opposite sex and both presenting themselves to the community as husband and wife. The department shall consider the income and resources of such couple as if the couple were married except when determining institutional eligibility.

"Deductible-Medicare" means an initial specified amount that is the responsibility of the client.

((*)) (1) "Part A of Medicare-inpatient hospital deductible" means an initial amount of the medical care cost in each benefit period which Medicare does not pay.

((*)) (2) "Part B of Medicare-physician deductible" means an initial amount of Medicare Part B covered expenses in each calendar year which Medicare does not pay.

"Delayed certification" means department approval of a person's eligibility for medicaid made after the established application processing time limits.

"Department" means the state department of social and health services.

"Early and periodic screening, diagnosis and treatment (EPSDT)" also known as the "healthy kids" program, means a program providing early and periodic screening, diagnosis and treatment to persons under twenty-one years of age who are eligible for Medicaid or the children's health program.

"Effective" means that the service or supply can reasonably be expected to produce the intended results and to have expected benefits that outweigh potential harmful effects.

"Electronic fund transfers (EFT)" means automatic bank deposits to a client's or provider's account.

"Emergency medical condition" means the sudden onset of a medical condition (including labor and delivery) manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in:

((*)) (1) Placing the patient's health in serious jeopardy;

((*)) (2) Serious impairment to bodily functions; or

((*)) (3) Serious dysfunction of any bodily organ or part.

"Emergency medical expense requirement" means a specified amount of expenses for ambulance, emergency room or hospital services, including physician services in a hospital, incurred for an emergency medical condition that a client must incur prior to certification for the medically indigent program.

"Essential spouse" see "spouse."

"Expert opinion" means a position or view expressed by a person with a high degree of scientific knowledge and skill in a specific field or health care scope of practice, based on the most widely accepted scientific information available.

"Extended care patient" means a recently hospitalized Medicare patient needing relatively short-term skilled nursing and rehabilitative care in a skilled nursing facility.

"Garnishment" means withholding an amount from earned or unearned income to satisfy a debt or legal obligation.

"Grandfathered client" means:

((*)) (1) A noninstitutionalized person who meets all current requirements for Medicaid eligibility except the criteria for blindness or disability; and

((*)) (2) Was eligible for Medicaid in December 1973 as blind or disabled whether or not the person was receiving cash assistance in December 1973; and

((*)) (3) Continues to meet the criteria for blindness or disability and other conditions of eligibility used under the Medicaid plan in December 1973; and

((*)) (4) An institutionalized person who was eligible for Medicaid in December 1973 or any part of that month, as an inpatient of a medical institution or resident of an intermediate care facility that was participating in the Medicaid program and for each consecutive month after December 1973 who:

((*)) (5) Continues to meet the requirements for Medicaid eligibility that were in effect under the state's plan in December 1973 for institutionalized persons; and

((*)) (6) Remains institutionalized.

"Health care provider" means a person or entity, as listed in WAC 388-502-0010, who provides health care services to eligible clients.

"Health care service" means a service or item undertaken or delivered primarily to treat a medical condition or to maintain or restore functional ability. A health care service is considered to be new if it is not yet in widespread use for the medical condition and client indications being considered.

"Health maintenance organization (HMO)" means an entity licensed by the office of the insurance commissioner to provide comprehensive medical services directly to an eligible enrolled client in exchange for a premium paid by the department on a prepaid capitation risk basis.

"Health outcomes" means the results that affect health status as measured by the length or quality of a client's life.

"Healthy kids," see "EPSDT."

"Home health agency" means an agency or organization certified under Medicare to provide comprehensive health care on a part-time or intermittent basis to a patient in the patient's place of residence.

"Hospital" means an institution licensed as a hospital by the department of health.

"Income for an SSI-related client," means the receipt by an individual of any property or service which the client can apply either directly, by sale, or conversion to meet the client's basic needs for food, clothing, and shelter.

((*)) (1) "Earned income" means gross wages for services rendered and/or net earnings from self-employment.

((*)) (2) "Unearned income" means all other income.

"Institution" means an establishment which furnishes food, shelter, medically-related services, and medical care to four or more persons unrelated to the proprietor. This includes medical facilities, nursing facilities, and institutions for the mentally retarded.

((*)) (1) "Institution-public" means an institution, including a correctional institution that is the responsibility of a governmental unit or over which a governmental unit exercises administrative control.

((*)) (2) "Institution for mental diseases" means an institution primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases including medical attention, nursing care, and related services.

((*)) (3) "Institution for the mentally retarded or a person with related conditions" means an institution that:

((*)) (a) Is primarily for the diagnosis, treatment or rehabilitation of the mentally retarded or a person with related conditions; and

((*)) (b) Provides, in a protected residential setting, on-going care, twenty-four hour supervision, evaluation, and planning to help each person function at the greatest ability.

((*)) (4) "Institution for tuberculosis" means an institution for the diagnosis, treatment, and care of a person with tuberculosis.

((*)) (5) "Medical institution" means an institution:

((*)) (a) Organized to provide medical care, including nursing and convalescent care;

((*)) (b) With the necessary professional personnel, equipment and facilities to manage the health needs of the patient on a continuing basis in accordance with acceptable standards;

((*)) (c) Authorized under state law to provide medical care; and

((*)) (d) Staffed by professional personnel. Services include adequate physician and nursing care.

"Intermediary" means an organization having an agreement with the federal government to process Medicare claims under Part A.

"Legal dependent" means a person for whom another person is required by law to provide support.

"Limited casualty program (LCP)" means a medical care program for medically needy, as defined under WAC 388-503-0320 and for medically indigent, as defined under WAC 388-503-0370.

"Medicaid" means the federal aid Title XIX program under which medical care is provided to persons eligible for:

((*)) (1) Categorically needy program as defined in WAC 388-503-0310 and 388-511-1105; or

((*)) (2) Medically needy program as defined in WAC 388-503-0320.

"Medical assistance." See "Medicaid."

"Medical assistance administration (MAA)" means the unit within the department of social and health services authorized to administer the Title XIX Medicaid and the state-funded medical care programs.

"Medical assistance unit (MAU)" means one or more family members whose eligibility for medical care is determined separately or together based on financial responsibility.

"Medical care services" means the limited scope of care financed by state funds and provided to general assistance (GAU) and ADATSA clients.

"Medical condition" means a disease, illness, injury, genetic or congenital defect, or a biological or psychological condition that lies outside the range of normal, age-appropriate human variation and interferes with the physical or mental functions needed to cope with everyday life. For medical assistance administration (MAA) purposes, "medical condition" also includes pregnancy.

"Medical consultant" means a physician employed by the department.

"Medical facility" see "Institution."

"Medically indigent (MI)" means a state-funded medical program for a person who has an emergency medical condition requiring hospital-based services.

"Medically necessary" ((is a term for describing requested service which is reasonably calculated to prevent, diagnose, correct, cure, alleviate or prevent worsening of conditions in the client that endanger life, or cause suffering or pain, or result in an illness or infirmity, or threaten to cause or aggravate a handicap, or cause physical deformity or malfunction. There is no other equally effective, more conservative or substantially less costly course of treatment available or suitable for the client requesting the service. For the purpose of this section, "course of treatment" may include mere observation or, where appropriate, no treatment at all)) means a health care service is:

(1) For the purpose of treating (i.e., prevent, diagnose, detect, treat, or palliate) a medical condition;

(2) The most appropriate supply or level of care, considering potential benefits and harms to the client;

(3) Cost-effective for the condition compared to alternative health care services, including no service; and

(4) Known to be effective in improving health outcomes.

(a) For new health care services, effectiveness is determined by the department, based on scientific evidence.

(b) For existing health care services, effectiveness and efficacy is determined by the department, in the following order of priority:

(i) Scientific evidence;

(ii) Professional standards; then

(iii) Expert opinion.

"Medically needy (MN)" is the status of a person who is eligible for a federally matched medical program under Title XIX of the Social Security Act, who, but for income above the categorically needy level, would be eligible as categorically needy. Effective January 1, 1996, an AFDC-related adult is not eligible for MN.

"Medicare" means the federal government health insurance program for certain aged or disabled clients under Titles II and XVIII of the Social Security Act. Medicare has two parts:

((*)) (1) "Part A" covers the Medicare inpatient hospital, post-hospital skilled nursing facility care, home health services, and hospice care.

((*)) (2) "Part B" is the supplementary medical insurance benefit (SMIB) covering the Medicare doctor's services, outpatient hospital care, outpatient physical therapy and speech pathology services, home health care, and other health services and supplies not covered under Part A of Medicare.

"Medicare assignment" means the method by which the provider receives payment for services under Part B of Medicare.

"Month of application" means the calendar month a person files the application for medical care. When the application is for the medically needy program, at the person's request and if the application is filed in the last ten days of that month, the month of application may be the following month.

"Nursing facility" means any institution or facility the department (([of health])) of health licenses as a nursing facility, or a nursing facility unit of a licensed hospital, that the:

((*)) (1) Department certifies; and

((*)) (2) Facility and the department agree the facility may provide skilled nursing facility care.

"Outpatient" means a nonhospitalized patient receiving care in a hospital outpatient or hospital emergency department, or away from a hospital such as in a physician's office, the patient's own home, or a nursing facility.

"Patient transportation" means client transportation to and from covered medical services under the federal Medicaid and state medical care programs.

"Physician" means a doctor of medicine, osteopathy, or podiatry who is legally authorized to perform the functions of the profession by the state in which the services are performed.

"Professional activity study (PAS)" means a compilation of inpatient hospital data, conducted by the commission of professional and hospital activities, to determine the average length of hospital stay for patients.

"Professional review organization for Washington (PRO-W)" means the state level organization responsible for determining whether health care activities:

((*)) (1) Are medically necessary;

((*)) (2) Meet professionally acceptable standards of health care; and

((*)) (3) Are appropriately provided in an outpatient or institutional setting for beneficiaries of Medicare and clients of Medicaid and maternal and child health.

"Prosthetic devices" means replacement, corrective, or supportive devices prescribed by a physician or other licensed practitioner of the healing arts within the scope of his or her practice as defined by state law to:

((*)) (1) Artificially replace a missing portion of the body;

((*)) (2) Prevent or correct physical deformity or malfunction; or

((*)) (3) Support a weak or deformed portion of the body.

"Provider" or "provider of service" means an institution, agency, or person:

((*)) (1) Who has a signed agreement with the department to furnish medical care, goods, and/or services to clients; and

((*)) (2) Is eligible to receive payment from the department.

"Resources for an SSI-related client," means cash or other liquid assets or any real or personal property that an individual or spouse, if any, owns and could convert to cash to be used for support or maintenance.

((*)) (1) If an individual can reduce a liquid asset to cash, it is a resource.

((*)) (2) If an individual cannot reduce an asset to cash, it is not considered an available resource.

((*)) (3) Liquid means properties that are in cash or are financial instruments which are convertible to cash such as, but not limited to, cash, savings, checking accounts, stocks, mutual fund shares, mortgage, or a promissory note.

((*)) (4) Nonliquid means all other property both real and personal evaluated at the price the item can reasonably be expected to sell for on the open market.

"Retroactive period" means the three calendar months before the month of application.

"Spell of illness" see "benefit period."

"Scientific evidence" means evidence that consists primarily of the results of controlled clinical trials that either directly or indirectly demonstrate the effect of the service on health outcomes. If controlled clinical trials are not available, observational studies that demonstrate a causal relationship between the service and health outcomes can be used. Partially controlled observational studies and uncontrolled clinical series may be suggestive, but do not by themselves demonstrate a causal relationship unless the magnitude of the effect observed exceeds anything that could be explained either by the natural history of the medical condition or potential experimental biases. If controlled trials are not available, case studies that show a consistent relationship between service and health outcomes may be used for rare health conditions.

"Spenddown" means the process by which a person uses incurred medical expenses to offset income and/or resources to meet the financial standards established by the department.

"Spouse" means:

((*)) (1) "Community spouse" means a person living in the community and married to an institutionalized person or to a person receiving services from a home and community-based waivered program as described under chapter 388-515 WAC.

((*)) (2) "Eligible spouse" means an aged, blind or disabled husband or wife of an SSI-eligible person, with whom such a person lives.

((*)) (3) "Essential spouse" means, a husband or wife whose needs were taken into account in determining old age assistance (OAA), aid to the blind (AB), or disability assistance (DA) client for December 1973, who continues to live in the home and to be the spouse of such client.

((*)) (4) "Ineligible spouse" means the husband or wife of an SSI-eligible person, who lives with the SSI-eligible person and who has not applied or is not eligible to receive SSI.

((*)) (5) "Institutionalized spouse" means a married person in an institution or receiving services from a home or community-based waivered program.

((*)) (6) "Nonapplying spouse" means an SSI-eligible person's husband or wife, who has not applied for assistance.

"SSI-related" means an aged, blind or disabled person not receiving an SSI cash grant.

"Supplemental security income (SSI) program, Title XVI" means the federal grant program for aged, blind, and disabled established by section 301 of the Social Security amendments of 1972, and subsequent amendments, and administered by the Social Security Administration (SSA).

"Supplementary payment (SSP)" means the state money payment to persons receiving benefits under Title XVI, or who would, but for the person's income, be eligible for such benefits, as assistance based on need in supplementation of SSI benefits. This payment includes:

((*)) (1) "Mandatory state supplement" means the state money payment to a person who, for December 1973, was a client receiving cash assistance under the department's former programs of old age assistance, aid to the blind and disability assistance; and

((*)) (2) "Optional state supplement" means the elective state money payment to a person eligible for SSI benefits or who, except for the level of the person's income, would be eligible for SSI benefits.

"Third party" means any entity that is or may be liable to pay all or part of the medical cost of care of a medical program client.

"Title XIX" is the portion of the federal Social Security Act that authorizes grants to states for medical assistance programs. Title XIX is also called Medicaid.

"Transfer" means any act or omission to act when title to or any interest in property is assigned, set over, or otherwise vested or allowed to vest in another person; including delivery of personal property, bills of sale, deeds, mortgages, pledges, or any other instrument conveying or relinquishing an interest in property. Transfer of title to a resource occurs by:

((*)) (1) An intentional act or transfer; or

((*)) (2) Failure to act to preserve title to the resource.

"Value-fair market for an SSI-related person" means the current value of a resource at the price for which the resource can reasonably be expected to sell on the open market.

"Value of compensation received" means, for SSI-related medical eligibility, the gross amount paid or agreed to be paid by the purchaser of a resource.

"Value-uncompensated" means, for SSI-related medical eligibility, the fair market value of a resource, minus the amount of compensation received in exchange for the resource.

[Statutory Authority: RCW 74.04.050, 74.04.057, 74.08.090, 74.09.530, 74.04.005, 74.08.331, 74.08A.010, [74.08A.]100, [74.08A.]210, [74.08A.]230, 74.09.510, 74.12.255, Public Law 104-193 (1997) and the Balanced Budget Act [of] 1997. 98-15-066, 388-500-0005, filed 7/13/98, effective 7/30/98. Statutory Authority: RCW 74.08.090. 95-22-039 (Order 3913, #100246), 388-500-0005, filed 10/25/95, effective 10/28/95; 94-10-065 (Order 3732), 388-500-0005, filed 5/3/94, effective 6/3/94. Formerly parts of WAC 388-80-005, 388-82-006, 388-92-005 and 388-93-005.]

Reviser's note: The bracketed material preceding the section above was supplied by the code reviser's office.

Legislature Code Reviser 

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Washington State Code Reviser's Office