Original Notice.

     Preproposal statement of inquiry was filed as WSR 03-10-050.

     Title of Rule: Part 1 of 3, chapter 388-550 WAC, Hospital services, amending WAC 388-550-1300 Revenue code categories and subcategories and 388-550-6000 Payment -- Outpatient hospital services; and new section WAC 388-550-1350 Revenue code categories and subcategories -- CPT and HCPCS reporting requirements for outpatient hospitals.

     Purpose: To avoid federal penalties, the department is amending these rules to be HIPAA-compliant by October 16, 2003.

     Statutory Authority for Adoption: RCW 74.04.050, 74.04.057, and 74.08.090.

     Statute Being Implemented: RCW 74.04.050, 74.04.057, and 74.08.090.

     Summary: The department is amending the rules to comply with the requirements of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104-191. Also, the rules are being revised to ensure the department's administrative code reflects current policy and practice.

     Reasons Supporting Proposal: Complies with the HIPAA requirements and avoids federal penalties by amending rules to be HIPAA-compliant by October 16, 2003. Updates rule content to reflect current department policy.

     Name of Agency Personnel Responsible for Drafting: Kathy Sayre, P.O. Box 45533, Olympia, WA 98504, (360) 725-1342; Implementation and Enforcement: Cynthia Smith, P.O. Box 45510, Olympia, WA 98504, (360) 725-1839.

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

     Rule is necessary because of federal law, Public Law 104-191 (Health Insurance Portability and Accountability Act of 1996).

     Explanation of Rule, its Purpose, and Anticipated Effects: The proposed rules meet HIPAA-specific standards that all states must meet in regards to electronic health information transactions and the privacy of client health information. In addition, the proposed rules update rule content and create a new section to update revenue code categories and subcategories and reporting requirements for inpatient and outpatient claims. Also, the proposed rules clarify that revenue code categories and subcategories are published in the UB-92 National Uniform Billing Data Element Specifications Manual and add language to state that MAA requires a hospital provider to report and bill hospital services under the appropriate revenue codes published in the UB-92 manual.

     The purpose of the rules is to ensure department rules are HIPAA-compliant by October 16, 2003, and to adopt into permanent rule clarifying language to reflect current department policy and business practices.

     The anticipated effects are: (1) The state will meet HIPAA-specific standards which all states are required to meet in regards to electronic health information transactions and the privacy of client health information. (2) MAA rules will be HIPAA-compliant by October 16, 2003, thereby avoiding federal penalties. (3) MAA's revenue code categories and subcategories and reporting requirements for inpatient and outpatient claims will be updated.

     Proposal Changes the Following Existing Rules: The department is amending language to comply with HIPAA requirements. In addition, the department has added language to clarify that revenue code categories and subcategories are published in the UB-92 National Uniform Billing Data Element Specifications Manual. The new rules also add language regarding MAA reporting and billing requirements for hospital services under the appropriate revenue codes published in the UB-92 manual.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. Small businesses are not affected by these rule changes.

     RCW 34.05.328 applies to this rule adoption. The rules meet the definition of a "significant legislative rule." The department has prepared a cost benefit analysis (CBA) memo regarding these rule changes. A copy of the memo can be obtained from Cynthia Smith, Division of Business and Finance, Medical Assistance Administration, Department of Social and Health Services, P.O. Box 45510, Olympia, WA 98504-5510, phone (360) 725-1839, e-mail smithch@dshs.wa.gov.

     Hearing Location: Blake Office Park (behind Goodyear Courtesy Tire), 4500 10th Avenue S.E., Rose Room, Lacey, WA 98503, on August 26, 2003, at 10:00 a.m.

     Assistance for Persons with Disabilities: Contact Andy Fernando, DSHS Rules Coordinator, by August 22, 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., August 26, 2003.

     Date of Intended Adoption: Not sooner than August 27, 2003.

July 17, 2003

Brian H. Lindgren, Manager

Rules and Policies Assistance Unit

     (2))) Revenue code categories and subcategories listed in this chapter ((shall be as listed in the state of Washington's UB-92 procedure manual, implemented October 1, 1993, which was patterned after the national uniform billing data element specifications adopted by the national uniform billing committee)) are published in the UB-92 National Uniform Billing Data Element Specifications Manual.

     (2) The medical assistance administration (MAA) requires a hospital provider to report and bill all hospital services provided to medical assistance clients using the appropriate revenue codes published in the manual referenced in subsection (1) of this section.

[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, § 388-550-1300, filed 12/18/97, effective 1/18/98.]

     (a) "IV therapy," only subcategory "infusion pump";

     (b) "Medical/surgical supplies and devices," only subcategory "prosthetic/orthotic devices";

     (c) "Laboratory";

     (d) "Laboratory pathological";

     (e) "Radiology - diagnostic";

     (f) "Radiology - therapeutic";

     (g) "Nuclear medicine";

     (h) "CT Scan";

     (i) "Operating room services," only subcategories "general classification" and "minor surgery";

     (j) "Blood and blood component administration, processing and storage," only subcategory "administration (e.g., transfusions)";

     (k) "Other imaging services";

     (l) "Respiratory services";

     (m) "Physical therapy";

     (n) "Occupational therapy";

     (o) "Speech - language pathology";

     (p) "Emergency room," only subcategories "general classification" and "urgent care";

     (q) "Pulmonary function";

     (r) "Audiology";

     (s) "Cardiology";

     (t) "Ambulatory surgical care";

     (u) "Outpatient services";

     (v) "Clinic," only subcategories "general classification," "dental clinic," and "other clinic";

     (w) "Magnetic Resonance Technology (MRT)";

     (x) "Medical/surgical supplies - extension";

     (y) "Pharmacy - extension";

     (z) "Labor room/delivery," only subcategories "delivery" and "birthing center";

     (aa) "EKG/ECG (electrocardiogram)";

     (bb) "EEG (electroencephalogram)";

     (cc) "Gastro-intestinal services";

     (dd) "Treatment/observation room";

     (ee) "Lithotripsy";

     (ff) "Acquisition of body components," only subcategories "living donor" and "cadaver donor";

     (gg) "Hemodialysis - outpatient or home," only subcategory "general classification";

     (hh) "Peritoneal dialysis - outpatient or home," only subcategory "general classification";

     (ii) "Continuous ambulatory peritoneal dialysis (CAPD) - outpatient or home," only subcategory "general classification";

     (jj) "Continuous cycling peritoneal dialysis (CCPD) - outpatient or home," only subcategory "general classification";

     (kk) "Miscellaneous dialysis," only subcategories "general classification" and "ultrafiltration";

     (ll) "Psychiatric/psychological treatments," only subcategory "electroshock therapy";

     (mm) "Other diagnostic services";

     (nn) "Other therapeutic services," only subcategory "other therapeutic service"; and

     (oo) Other revenue code categories and subcategories identified and published by the department.

     (2) For an outpatient claim line requiring a CPT or HCPCS code(s), the department denies payment if the required code is not reported on the line.

[]

     (4))) The medical assistance administration (MAA) pays outpatient hospital providers for providing covered outpatient hospital services to medical assistance clients using the maximum allowable fee schedule and/or the hospital outpatient rate.

     (1) Maximum allowable fee schedule:

     (a) MAA uses the maximum allowable fee schedule to pay for services listed in the outpatient hospital fee schedule and published in MAA's billing instructions.

     (b) Outpatient hospital services are included in the outpatient hospital fee schedule when:

     (i) A technical component has been established in the Medicare Fee Schedule Data Base (MFSDB); or

     (ii) MAA specifically identifies certain services for payment using the maximum allowable fee schedule.

     (c) Outpatient hospital services paid using MAA's maximum allowable fee schedule include:

     (i) Laboratory services;

     (ii) Imaging services;

     (iii) EKG/ECG/EEG and other diagnostics;

     (iv) Physical therapy;

     (v) Occupational therapy;

     (vi) Speech/language therapy;

     (vii) Synagis;

     (viii) Sleep studies; and

     (ix) Other hospital services as identified and published by the department.

     (d) MAA's payment for covered services included in the outpatient hospital fee schedule is the lesser of:

     (i) The hospital's billed amount; or

     (ii) MAA's maximum allowable.

     (e) Certain services or supplies listed in the outpatient hospital fee schedule are identified and designated by MAA to be paid by acquisition cost or by report. See subsection (7) of this section for MAA's requirement for submitting invoices.

     (2) Outpatient rate:

     (a) MAA uses the outpatient rate to pay hospitals for covered services reported on a hospital claim that are not listed in the outpatient hospital fee schedule.

     (b) The outpatient rate is a hospital-specific rate that uses the hospital's ratio of costs-to-charges (RCC) rate as its base. MAA's rate-setting method for an outpatient rate is described in WAC 388-500-4500.

     (3) The department considers hospital stays of twenty-four hours or less outpatient short stays and uses the outpatient payment ((method to reimburse)) methods in subsections (1) and (2) of this section to pay a hospital for these ((stays)) services. However, when an outpatient short stay involves one of the following situations, the department uses inpatient payment methods to ((reimburse)) pay a hospital for covered services:

     (a) Death of a client;

     (b) Obstetrical delivery;

     (c) Initial care of a newborn; or

     (d) Transfer of a client to another acute care hospital.

     (((5) Under WAC 246-976-935, MAA may:

     (a) Enhance payments for trauma care provided to a client eligible under the medically indigent MI) program or a Title XIX Medicaid program when the trauma:

     (i) Qualifies under the trauma program; and

     (ii) Care is provided in a nongovernmental hospital designated by the department of health (DOH) as a trauma services center.

     (b) Provide an annual grant for trauma services to:

     (i) A governmental hospital certified by DOH as a trauma services center; and

     (ii) An MAA-approved critical access hospital (CAH).

     (6))) (4) The department uses the outpatient payment ((method to reimburse)) methods in subsections (1) and (2) of this section to pay for covered inpatient hospital services provided within twenty-four hours of a client's inpatient admission that are not related to the admission. Inpatient hospital services provided within twenty-four hours of a client's inpatient admission that are related to the admission are paid according to WAC 388-550-2900(12).

     (((7))) (5) For a client enrolled in an MAA-contracted ((Healthy Options)) managed care plan, the plan is responsible to ((reimburse)) pay a hospital provider for hospital services that the plan covers. MAA ((reimburses)) pays for a service not covered by the managed care plan only when:

     (a) The service is included in the scope of coverage under the client's medical assistance program;

     (b) The service is medically necessary as defined in WAC 388-550-1050; and

     (c) The provider has a current core provider agreement with MAA and meets applicable MAA program requirements in other published WACs.

     (((8))) (6) The department does not ((reimburse)) pay for:

     (a) Room and ancillary services charges beyond the twenty-four hour period for outpatient short stays; or

     (b) Emergency room, labor room, observation room, and other room charges in combination when billing periods for theses charges overlap.

     (((9))) (7) In order to be paid for covered outpatient hospital services listed in the outpatient hospital fee schedule as a paid at acquisition cost or by report, MAA requires the hospital provider to submit an invoice for billed amounts of five hundred or more.

     (8) In order to be ((reimbursed)) paid for covered outpatient hospital services, hospitals must bill MAA according to the conditions of payment under WAC 388-502-0100, time limits under WAC 388-502-0150, and other applicable published issuances. In addition, MAA requires hospitals to bill outpatient claims using the line item date of service and the appropriate revenue codes, ((CPT)) admit and discharge hour, Current Procedural Terminology (CPT) codes, Healthcare Common Procedural Coding System (HCPSCS) codes, and modifiers listed in MAA's published outpatient hospital fee schedule. A hospital's bill to the department must show the admitting, principal, and secondary diagnoses and include the attending physician's name and MAA-assigned provider number.

[Statutory Authority: RCW 74.08.090, 74.09.500, 74.09.035(1), and 43.88.290. 02-21-019, § 388-550-6000, filed 10/8/02, effective 11/8/02. Statutory Authority: RCW 74.09.090, 42 U.S.C. 1395x(v), 42 C.F.R. 447.271 and 42 C.F.R. 11303. 99-14-028, § 388-550-6000, filed 6/28/99, effective 7/1/99. Statutory Authority: RCW 74.08.090, 42 USC 1395 x(v), 42 CFR 447.271, 447.11303, and 447.2652. 99-06-046, § 388-550-6000, filed 2/26/99, effective 3/29/99. 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, § 388-550-6000, filed 12/18/97, effective 1/18/98.]

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