WSR 05-07-096

PROPOSED RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES
(Medical Assistance Administration)

[ Filed March 17, 2005, 4:31 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 05-01-129.

Title of Rule and Other Identifying Information: Amending WAC 388-550-3000 DRG payment system.

Hearing Location(s): Blake Office Park East (behind Goodyear Courtesy Tire), Rose Room, 4500 10th Avenue S.E., Lacey, WA, on April 26, 2005, at 10:00 a.m.

Date of Intended Adoption: Not sooner than April 27, 2005.

Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA, e-mail fernaax@dshs.wa.gov, fax (360) 664-6185, by 5:00 p.m., April 26, 2005.

Assistance for Persons with Disabilities: Contact Fred Swenson, DSHS Rules Consultant, by April 22, 2005, TTY (360) 664-6178 or (360) 664-6097.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department is updating and clarifying policy regarding the diagnostic-related group (DRG) classification system for inpatient hospital services provided to medical assistance clients.

Reasons Supporting Proposal: See above.

Statutory Authority for Adoption: RCW 74.04.050, 74.08.090.

Statute Being Implemented: RCW 74.04.050, 74.08.090.

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 98504-5533, (360) 725-1342; Implementation and Enforcement: John Hanson, P.O. Box 45510, Olympia, WA 98504-5510, (360) 725-1856.

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

A cost-benefit analysis is not required under RCW 34.05.328. Since the proposed amendment does 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. The rule has been rewritten to update and clarify policy regarding the diagnostic-related group (DRG) classification system for inpatient hospital services provided to a client from the date of inpatient admission to date of discharge.

March 15, 2005

Andy Fernando, Manager

Rules and Policies Assistance Unit

3530.2
AMENDATORY SECTION(Amending WSR 99-06-046, filed 2/26/99, effective 3/29/99)

WAC 388-550-3000   Payment method--DRG ((payment system)).   (1) ((Except where otherwise specified, MAA)) The medical assistance administration (MAA) uses the diagnosis-related group (DRG) ((system, which categorizes patients into clinically coherent and homogenous groups with respect to resource use, as the reimbursement method for)) payment method to reimburse covered inpatient hospital services, except as specified in WAC 388-550-4300 and 388-550-4400.

(2) MAA uses the all-patient grouper (AP-DRG) to assign a DRG to each inpatient hospital stay. MAA periodically evaluates which ((all-patient grouper (AP-DRG) version)) version of the AP-DRG to use.

(3)(((a) MAA calculates the DRG payment for a particular hospital by multiplying the assigned DRG's relative weight, as determined in WAC 388-550-3100, for that admission by the hospital's cost-based conversion factor, as determined in WAC 388-550-3450.

(b) If the hospital is participating in the selective contracting program, the department multiplies the DRG relative weight for the admission by the hospital's negotiated conversion factor, as specified in WAC 388-550-4600(4).

(4)(a) MAA pays for a hospital readmission within seven days of discharge for the same client when department review concludes the readmission did not occur as a result of premature hospital discharge.

(b) When a client is readmitted to the same hospital within seven days of discharge, and MAA review concludes the readmission resulted from premature hospital discharge, MAA treats the previous and subsequent admissions as one hospital stay and pay a single DRG for the combined stay)) A DRG payment includes, but is not limited to:

(a) All covered hospital services provided to a client during the client's inpatient hospital stay.

(b) Outpatient hospital services, including preadmission, emergency room, and observation services related to an inpatient hospital admission and provided within one calendar day of a client's inpatient hospital admission. These outpatient services must be billed on the inpatient hospital claim (see WAC 388-550-6000 (3)(c))

(c) Any specific service(s), treatment(s), or procedure(s) (such as renal dialysis services) that the admitting hospital is unable to provide and:

(i) The admitting hospital sends the client to another facility or provider for the service(s), treatment(s), or procedure(s) during the client's inpatient stay; and

(ii) The client returns as an inpatient to the admitting hospital.

(d) All transportation costs for an inpatient client when the client requires transportation to another facility or provider for a specific service(s), treatment(s), or procedure(s) that the admitting hospital is unable to provide and:

(i) The admitting hospital sends the client to another facility or provider for the service(s), treatment(s), or procedure(s); and

(ii) The client returns as an inpatient to the admitting hospital.

(4) MAA's DRG payment is determined by multiplying the assigned DRG's relative weight, as determined in WAC 388-550-3100, by the hospital's conversion factor. See WAC 388-550-3450 and 388-550-4600(4).

(5) ((If two different DRG assignments are involved in a readmission as described in subsection (4) of this section, MAA reviews the hospital's records to determine the appropriate reimbursement .

(6) MAA recognizes Medicaid's DRG payment for a Medicare-Medicaid dually eligible client to be payment in full.

(a) MAA pays the Medicare deductible and co-insurance related to the inpatient hospital services provided to clients eligible for Medicare and Medicaid subject to the Medicaid maximum allowable limit set in WAC 388-550-1200(6).

(b) MAA ensures total Medicare and Medicaid payments to a provider for such client does not exceed Medicaid's maximum allowable charges.

(c) MAA pays for those allowed charges beyond the threshold using the outlier policy described in WAC 388-550-3700 in cases where:

(i) Such client's Medicare Part A benefits including lifetime reserve days are exhausted; and

(ii) The Medicaid outlier threshold status is reached)) MAA's DRG payments to hospitals may be adjusted when one or more of the following occur:

(a) A claim qualifies as a DRG high-cost or low-cost outlier (see WAC 388-550-3700);

(b) A client transfers from one acute care hospital or distinct unit to another acute care hospital or distinct unit (see WAC 388-550-3600);

(c) A client is not eligible for a medical assistance program on one or more of the days of the hospital stay;

(d) A client is eligible for Part B Medicare and Medicare has made a payment for the Part B hospital charges; or

(e) A client is discharged from an inpatient hospital stay and is readmitted as an inpatient within seven days. MAA or its designee performs a retrospective utilization review (see WAC 388-550-1700 (3)(b)(iii)) on the initial admission and the readmission(s) to determine which inpatient hospital stay(s) qualify for DRG payment.

[Statutory Authority: RCW 74.08.090, 42 USC 1395 x(v), 42 CFR 447.271, 447.11303, and 447.2652. 99-06-046, 388-550-3000, 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, 388-550-3000, filed 12/18/97, effective 1/18/98.]

Washington State Code Reviser's Office