WSR 04-17-114



(Medical Assistance Administration)

[ Filed August 17, 2004, 1:47 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 04-13-105.

Title of Rule and Other Identifying Information: Amending WAC 388-550-3800 Rebasing and recalibration.

Hearing Location(s): Office Building 2 Auditorium (DSHS Headquarters), 1115 Washington, Olympia, WA 98504 (public parking at 11th and Jefferson), on September 21, 2004, at 10:00 a.m.

Date of Intended Adoption: Not sooner than September 22, 2004.

Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA, e-mail, fax (360) 664-6185, by 5:00 p.m., September 21, 2004.

Assistance for Persons with Disabilities: Contact Fred Swenson, DSHS Rules Consultant, by September 17, 2004, TTY (360) 664-6178 or (360) 664-6097.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rule will allow MAA to recalibrate the relative weights used in its diagnostic-related group (DRG) reimbursement system without creating unintended cost increases to MAA. Recalibration is done as part of a periodic rebasing of MAA's DRG reimbursement system. Recalibrating relative weights at this time serves the purpose of recognizing and adjusting for changes in hospital cost experience. Also, periodically, relative weights are recalibrated separately from a rebasing effort in order to adopt and implement a more recent version of the All Patient DRG (AP DRG) grouper software.

Reasons Supporting Proposal: This intent is to allow redistribution of reimbursement according to updated diagnosis groups. The anticipated effect of the rule is to allow MAA to recalibrate while maintaining budget neutrality within the system, and to allow MAA to adopt current versions of the AP DRG grouper without exceeding its budget appropriation.

Statutory Authority for Adoption: RCW 74.08.090 and 74.09.500.

Statute Being Implemented: RCW 74.08.090 and 74.09.500.

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

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

Name of Agency Personnel Responsible for Drafting: Kathy Sayre, P.O. Box 45533, Olympia, WA 98504, (360) 725-1342; Implementation and Enforcement: John Hanson, P.O. Box 45510, Olympia, WA 98504, (360) 725-1856.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has analyzed the proposed rule amendments and concludes that they will impose no new costs on small businesses. The preparation of a comprehensive small business economic impact statement is not required.

A cost-benefit analysis is not required under RCW 34.05.328. Since the proposed amendments do not "make significant amendments to a policy or regulatory program" (see RCW 34.05.328 (5)(c)(iii)), MAA has determined that the proposed rule is not "significant" as defined by the legislature. This rule has been rewritten to allow MAA to redistribute reimbursement to hospitals according to updated diagnosis groupings, and to allow MAA to be able to recalibrate while maintaining budget neutrality within the diagnostic-related group system.

August 13, 2004

Brian H. Lindgren, Manager

Rules and Policies Assistance Unit

AMENDATORY SECTION(Amending WSR 01-16-142, filed 7/31/01, effective 8/31/01)

WAC 388-550-3800   Rebasing and recalibration.   (1) The medical assistance administration (MAA) rebases the Medicaid payment system periodically using each hospital's cost report for its fiscal year that ends during the calendar year designated by MAA to be used for each update.

(2) MAA recalibrates diagnosis-related group (DRG) relative weights periodically, as described in WAC 388-550-3100, but no less frequently than each time rebasing is conducted. The department makes recalibrated relative weights effective on the rate implementation date, which can change with each rebasing.

(3) When recalibrating DRG relative weights without rebasing, MAA may apply a budget neutrality factor (BNF) to hospitals' cost based conversion factors to ensure that total DRG payments to hospitals do not exceed total DRG payments that would have been made to hospitals if the relative weights had not been recalibrated. For the purposes of this section, BNF equals the percentage change from total reimbursement calculated under a new payment system to total reimbursement calculated under the prior payment system.

[Statutory Authority: RCW 74.08.090 and 42 U.S.C. 1395x(v), 42 C.F.R. 447.271, .11303, and .2652. 01-16-142, 388-550-3800, filed 7/31/01, effective 8/31/01. Statutory Authority: RCW 74.08.090, 74.09.730, 74.04.050, 70.01.010, 74.09.200, [74.09.]500, [74.09.]530 and 43.20B.020. 98-01-124, 388-550-3800, filed 12/18/97, effective 1/18/98.]

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