WSR 07-10-101

PROPOSED RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES
(Health and Recovery Services Administration)

[ Filed May 1, 2007, 3:52 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 06-22-054.

Title of Rule and Other Identifying Information: Part 1 of 3; new WAC 388-550-5410 Medicaid cost report schedules; and amending WAC 388-550-5400 Payment method -- PHDSH, 388-550-5425 Upper payment limit (UPL) payments for inpatient hospital services, and 388-550-5450 Supplemental distributions to approved trauma service centers.

Hearing Location(s): Blake Office Park East, Rose Room, 4500 10th Avenue S.E., Lacey, WA 98503 (one block north of the intersection of Pacific Avenue S.E. and Alhadeff Lane. A map or directions are available at http://www1.dshs.wa.gov/msa/rpau/docket.html or by calling (360) 664-6097), on June 5, 2007, at 10:00 a.m.

Date of Intended Adoption: Not earlier than June 6, 2007.

Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA 98503, e-mail schilse@dshs.wa.gov, fax (360) 664-6185, by 5:00 p.m. on June 5, 2007.

Assistance for Persons with Disabilities: Contact Stephanie Schiller by June 1, 2007, TTY (360) 664-6178 or (360) 664-6097 or by e-mail at schilse@dshs.wa.gov.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department is proposing new rules and amendments to existing rules to ensure clear and consistent policies for hospital reimbursement and to ensure compliance with federal and state guidelines. The proposed rules add new sections to ensure all disproportionate share hospital (DSH) programs are identified in rule and ensure that sufficient program detail is provided; amend sections pertaining to DSH requirements to ensure consistency with federal guidelines; describe how hospitals qualify for DSH payments; add definitions that apply to DSH payments; amend sections pertaining to the certified public expenditure (CPE) payment program to clarify CPE payment program policies and ensure consistency with federal guidelines embodied in the state plan; and amend sections pertaining to supplemental distributions to approved trauma centers in response to hospital provider input to the department; and incorporate into rule that the department is terminating the upper payment limit (UPL) program.

Reasons Supporting Proposal: See above.

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 45504, Olympia, WA 98504-5504, (360) 725-1342; Implementation and Enforcement: Ayuni Wimpee, P.O. Box 45510, Olympia, WA 98504-5510, (360) 725-1835.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has determined that the proposed rule will not create more than minor costs for affected small businesses.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Ayuni Wimpee, P.O. Box 45510, Olympia, WA 98504-5510, phone (360) 725-1835, fax (360) 753-9152, e-mail wimpeah@dshs.wa.gov.

April 26, 2007

Stephanie E. Schiller

Rules Coordinator

3860.3
AMENDATORY SECTION(Amending WSR 06-08-046, filed 3/30/06, effective 4/30/06)

WAC 388-550-5400   Payment method--Public hospital disproportionate share hospital (PHDSH).   (1) The department's public hospital disproportionate share hospital (PHDSH) program is a public hospital program for:

(a) Public hospitals located in the state of Washington that are:

(i) Owned by a public hospital district((s)); and

(ii) Not certified by the department of health (DOH) as a critical access hospital;

(b) Harborview Medical Center; and

(c) University of Washington Medical Center.

(2) The ((department pays)) PHDSH payments to a hospital((s)) eligible under this program ((a payment equal to)) may not exceed the hospital's ((individual)) disproportionate share hospital (DSH) ((payment limit)) cap calculated according to WAC 388-550-4900. The ((resulting amount is multiplied by)) hospital receives only the federal matching assistance percentage ((in effect for Washington State at the time of the payment. This amount is sent to the hospital)) of the total computable payment amount.

(3) Hospitals receiving payment under ((this DSH)) the PHDSH program must ((certify that funds have been spent on uncompensated care at the hospital equal to or in excess of the payment amount before applying the federal matching assistance percentage)) provide the local match for the federal funds through certified public expenditures (CPE). Payments are limited to costs incurred by the participating hospitals.

(4) A hospital receiving payment under the PHDSH program must submit to the department federally required medicaid cost report schedules apportioning inpatient and outpatient costs, beginning with the services provided during the state fiscal year 2006. See WAC 388-550-5410.

(5) PHDSH payments are subject to the availability of DSH funds under the statewide DSH cap. If the statewide DSH cap is exceeded, the department will recoup PHDSH payments first, but only from hospitals that received total inpatient and DSH payments above the hold harmless level, and only to the extent of the excess amount above the hold harmless level. See WAC 388-550-4900 (13) and (14), and WAC 388-550-4670.

[Statutory Authority: RCW 74.08.090, 74.09.500. 06-08-046, 388-550-5400, filed 3/30/06, effective 4/30/06. Statutory Authority: RCW 74.04.050, 74.08.090. 05-12-132, 388-550-5400, filed 6/1/05, effective 7/1/05. Statutory Authority: RCW 74.08.090, 74.09.500, 74.09.035(1), and 43.88.290. 03-13-055, 388-550-5400, filed 6/12/03, effective 7/13/03. Statutory Authority: RCW 74.08.090, 74.09.730, chapter 74.46 RCW and 42 U.S.C. 1396r-4. 99-14-025, 388-550-5400, filed 6/28/99, effective 7/1/99. 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, 388-550-5400, filed 12/18/97, effective 1/18/98.]


NEW SECTION
WAC 388-550-5410   Medicaid cost report schedules.   (1) A certified public expenditure (CPE) hospital must annually submit to the department federally required medicaid cost report schedules, using schedules approved by the centers for medicare and medicaid services (CMS), that apportion inpatient and outpatient costs to medicaid clients and uninsured patients for the service year, as follows:

(a) Title XIX fee-for-service claims;

(b) Medicaid managed care organization (MCO) plan claims;

(c) Uninsured patients (individuals who are not covered under any health care insurance plan for the hospital service provided). The cost report schedules for uninsured patients must not include the cost of services that medicaid would not have paid for had the patients been medicaid eligible; and

(d) State-administered program patients. State-administered program patients are reported separately and are not to be included on the Uninsured patient cost report schedule. The department will provide Provider Statistics and Reimbursements (PS&R) reports for the state-administered program claims.

(2) The department requires each CPE hospital to submit medicaid cost report schedules to the department for services provided to patients discharged on or after July 1, 2005.

(3) A CPE hospital must:

(a) Use the information on individualized PS&R reports provided by the department when completing the medicaid cost report schedules. The department provides the hospital with the PS&R reports at least thirty days prior to the appropriate deadline.

(i) For state fiscal year (SFY) 2006, the deadline for all CPE hospitals to submit the federally required medicaid cost report schedules is June 30, 2007.

(ii) For SFY 2007 and thereafter, each CPE hospital is required to submit the medicaid cost report schedules to the department within thirty days after the medicare cost report is due to its medicare fiscal intermediary.

(iii) For hospitals with a December 31 year end, partial year medicaid cost report schedules for the period July 1, 2005 through December 31, 2005 must be submitted to the department by August 31, 2007.

(b) Complete the cost report schedules for medicaid MCO plan and the uninsured patients using the hospital provider's records.

(c) Comply with the department's instructions regarding how to complete the required cost report schedules.

[]


AMENDATORY SECTION(Amending WSR 06-08-046, filed 3/30/06, effective 4/30/06)

WAC 388-550-5425   Upper payment limit (UPL) payments for inpatient hospital services.   (1) ((Each state fiscal year, in accordance with legislative direction and established prospective payment methods, the department creates an upper payment limit (UPL) payment pool that provides supplemental payments for inpatient hospital services to a hospital provider of Title XIX Medicaid services that is classified as either a:

(a) Washington state-owned or state-operated hospital; or

(b) Nonstate government-owned hospital.

(2) UPL payments for inpatient hospital services are subject to:

(a) Federal approval for federal matching funds; and

(b) A department analysis of the Medicare UPL for hospital payment.

(3) The department determines each payment year's UPL payment for inpatient hospital services by:

(a) Using the charge and payment data from the department's payment system for inpatient hospital services for the base year; and

(b) Calculating the cumulative difference between Medicare payments and Title XIX payments, including third party liability payment for all eligible hospitals during the most recent state fiscal year.

(4) UPL payments for inpatient hospital services:

(a) Are determined for participating eligible hospitals during each federal fiscal year;

(b) Are paid by the department on a periodic basis to one or more of the participating eligible hospitals; and

(c) Must be used by the receiving hospital(s) to improve health care services to low income patients)) The upper payment limit (UPL) program is terminated effective July 1, 2007. The department will not make UPL payments after June 30, 2007.

[Statutory Authority: RCW 74.08.090, 74.09.500. 06-08-046, 388-550-5425, filed 3/30/06, effective 4/30/06.]


AMENDATORY SECTION(Amending WSR 06-08-046, filed 3/30/06, effective 4/30/06)

WAC 388-550-5450   Supplemental distributions to approved trauma service centers.   (1) The ((department's)) trauma care fund (TCF) is an amount legislatively appropriated to ((DSHS)) the department each biennium, at the legislature's sole discretion, for the purpose of supplementing the department's payments to eligible trauma service centers for providing qualified trauma services to eligible medicaid fee-for-service clients. Claims for trauma care provided to clients enrolled in the department's managed care programs are not eligible for supplemental distributions from the TCF.

(2) Beginning with trauma services provided after June 30, 2003, the department makes supplemental distributions from the TCF to qualified hospitals, subject to the provisions in this section and subject to legislative action.

(3) To qualify for supplemental distributions from the TCF, a hospital must:

(a) Be designated or recognized by the department of health (DOH) as an approved Level 1, Level 2, or Level 3 adult or pediatric trauma service center;

(b) Meet the provider requirements in this section and other applicable WAC;

(c) Meet the billing requirements in this section and other applicable WAC;

(d) Submit all information the department requires to ensure services are being provided; and

(e) Comply with DOH's Trauma Registry reporting requirements.

(4) Supplemental distributions from the TCF are:

(a) ((For qualified hospitals, determined as a percentage of a fixed amount per quarter. Each eligible hospital's share per quarter is based on the amount paid by the department to that hospital for inpatient and outpatient trauma care the hospital provides to Medicaid clients during that quarter, expressed as a percentage of the following total)) Allocated into five fixed payment pools of equal amounts. Timing of payments is described in subsection (5) of this section. Distributions from the payment pools to the individual hospitals are determined by first summing each eligible hospital's qualifying payments since the beginning of the service year and expressing this amount as a percentage of total payments to all eligible hospitals for qualifying services provided during the service year to date. Each hospital's payment percentage is multiplied by the available amount in the current period pool to determine the portion of the pool to be paid to each qualifying hospital. Eligible hospitals and qualifying payments are described in (i) through (iii) of this subsection:

(i) Qualifying payments are the department's payments to Level 1, Level 2, and Level 3 trauma service centers for qualified medicaid trauma cases ((in that quarter)) since the beginning of the service year. The department determines the countable payment ((per quarter)) for trauma care provided to medicaid clients based on date of service, not date of payment;

(ii) The department's payments to Level 1, Level 2, and Level 3 hospitals for trauma cases transferred in ((during that quarter)) since the beginning of the service year. A Level 1, Level 2, or Level 3 hospital that receives a transferred trauma case from any lower level hospital is eligible for the enhanced payment, regardless of the client's Injury Severity Score (ISS). An ISS is a summary rating system for traumatic anatomic injuries; and

(iii) The department's payments to Level 2 and Level 3 hospitals for qualified trauma cases (those that meet or exceed the ISS criteria in subsection (4)(b) of this section) that ((are)) these hospitals transferred to a higher level designated trauma service center ((during that quarter)) since the beginning of the service year.

(b) Paid only for a medicaid trauma case that meets:

(i) The ISS of thirteen or greater for an adult trauma patient (a client age fifteen or older);

(ii) The ISS of nine or greater for a pediatric trauma patient (a client younger than age fifteen); or

(iii) The conditions of subsection (4)(c).

(c) Made to hospitals, as follows, for a trauma case that is transferred:

(i) A hospital that receives the transferred trauma case qualifies for payment regardless of the ISS if the hospital is designated or recognized by DOH as an approved Level 1, Level 2, or Level 3 adult or pediatric trauma service center;

(ii) A hospital that transfers the trauma case qualifies for payment only if:

(A) It is designated or recognized by DOH as an approved Level 2 or Level 3 adult or pediatric trauma service center; and

(B) The ISS requirements in (b)(i) or (b)(ii) of this subsection are met.

(iii) A hospital that DOH designates or recognizes as an approved Level 4 or Level 5 trauma service center does not qualify for supplemental distributions for ((transferred)) trauma cases that are transferred in or transferred out, even when the transferred cases meet the ISS criteria in subsection (4)(b) of this section.

(d) Not funded by disproportionate share hospital (DSH) funds; and

(e) Not distributed by the department to:

(i) Trauma service centers designated or recognized as Level 4 or Level 5;

(ii) Critical access hospitals (CAHs), except when the CAH is also a Level 3 trauma service center. Beginning with qualifying trauma services provided in state fiscal year (SFY) 2007, the department allows a hospital with this dual status to receive distributions from the TCF; or

(iii) Any hospital for follow-up surgical services related to the qualifying trauma incident but provided to the client after the client has been discharged for the initial qualifying injury.

(5) Distributions for an SFY are divided into five "quarters" and paid as follows:

(a) Each quarterly distribution paid by the department from the TCF totals twenty percent of the amount designated by the department for that SFY;

(b) The first quarterly supplemental distribution from the TCF is made six months after the SFY begins;

(c) Subsequent quarterly payments are made approximately every four months after the first quarterly payment is made, except as described in subsection (d);

(d) The "fifth quarter" final distribution from the TCF for the same SFY is:

(i) Made one year after the end of the SFY;

(ii) Based on the SFY that the TCF designated amount relates to; and

(iii) Distributed based on each eligible hospital's percentage of the total payments made by the department to all designated trauma service centers for qualified trauma cases during the relevant fiscal year.

(6) For purposes of the supplemental distributions from the TCF, all of the following apply:

(a) The department may consider a request for a claim adjustment submitted by a provider only if the request is received by the department within one year from the date of the initial trauma service;

(b) The department does not allow any carryover of liabilities for a supplemental distribution from the TCF ((after a date specified by the department as the last date to make)) beyond three hundred sixty-five calendar days from the date of discharge (inpatient) or date of service (outpatient). The deadline for making adjustments to a trauma claim ((for an SFY)) is the same as the deadline for submitting the initial claim to the department. WAC 388-502-0150(7) does not apply to TCF claims;

(c) All claims and claim adjustments are subject to federal and state audit and review requirements; and

(d) The total amount of supplemental distributions from the TCF disbursed to eligible hospitals by the department in any biennium cannot exceed the amount appropriated by the legislature for that biennium. The department has the authority to take whatever actions necessary to ensure the department stays within the TCF appropriation.

[Statutory Authority: RCW 74.08.090, 74.09.500. 06-08-046, 388-550-5450, filed 3/30/06, effective 4/30/06; 04-19-113, 388-550-5450, filed 9/21/04, effective 10/22/04.]

Washington State Code Reviser's Office