Original Notice.

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

     Title of Rule and Other Identifying Information: Amending WAC 388-550-2900 Payment limits -- Inpatient hospital services, 388-550-3000 Payment method--DRG, 388-550-3200 Medicaid cost proxies, 388-550-3300 Hospital peer groups and cost caps, 388-550-3350 Outlier costs, 388-550-3381 Payment methodology for acute PM&R services and administrative day services, 388-550-3400 Case mix index, and 388-550-3500 Hospital annual inflation adjustment determinations; and repealing WAC 388-550-2000 Medical criteria--Transplant services.

     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 to amend sections in chapter 388-550 WAC relating to hospital payment methodologies and limits in order to change verbiage from "medical assistance administration (MAA)" to "the department," change verbiage from "facility" to "hospital." In addition, the proposed changes reflect updates for dates of admission before August 1, 2007, and on and after August 1, 2007. The department is repealing WAC 388-550-2000.

     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: Larry Linn, P.O. Box 45502, Olympia, WA 98504-5502, (360) 725-1856.

     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 Larry Linn, P.O. Box 45502, Olympia, WA 98504-5502, phone (360) 725-1856, fax (360) 725-9152, e-mail linnld@dshs.wa.gov.

April 27, 2007

Stephanie E. Schiller

Rules Coordinator

     (a) Have a core-provider agreement with the department; and

     (b) Be an in-state bordering city hospital, a critical border hospital, or a distinct unit of such a hospital, that meets the definition in RCW 70.41.020 and is certified under Title XVIII of the federal Social Security Act; or

     (c) Be an out-of-state hospital that meets the conditions in WAC 388-550-6700.

     (2) The department does not pay:

     (a) A hospital or distinct unit for inpatient care and/or services provided to a client when a managed care organization (MCO) plan is contracted to cover those services.

     (b) A hospital or distinct unit for care and/or services provided to a client enrolled in the hospice program, unless the care or services are completely unrelated to the terminal illness that qualifies the client for the hospice benefit.

     (c) ((Hospitals)) A hospital or distinct unit for ancillary services in addition to the ((diagnosis-related group (DRG) payment)):

     (i) Diagnosis related group (DRG) payment, or per case rate payment on claims with dates of admission before August 1, 2007; or

     (ii) DRG payment, per diem payment, or per case rate payment no claims with dates of admission on and after August 1, 2007.

     (d) For additional days of hospitalization on a non-DRG claim when:

     (i) Those days exceed the number of days established ((at the seventy-fifth percentile as published in the "Length of Stay by Diagnosis and Operations, Western Region")) by the department or mental health division (MHD) designee (see WAC 388-550-2600), as the approved length of stay (LOS); and

     (ii) The hospital or distinct unit has not requested and/or received approval for an extended length of stay (LOS) from the department or MHD designee as specified in WAC 388-550-4300(3). The department may perform a prospective, concurrent, or retrospective utilization review as described in WAC 388-550-1700, to evaluate an extended LOS. A MHD designee may also perform those utilization reviews to evaluate an extended LOS.

     (e) For dates of admission before August 1, 2007, for elective or ((nonemergent)) nonemergency inpatient services provided in a nonparticipating hospital. A nonparticipating hospital is defined in WAC 388-550-1050. See also WAC 388-550-4600.

     (f) For inpatient hospital services when the department determines that the client's medical record fails to support the medical necessity and inpatient level of care for the inpatient admission. The department may perform a retrospective utilization review as described in WAC 388-550-1700, to evaluate if the services are medically necessary and are provided at the appropriate level of care.

     (g) For two separate inpatient hospitalizations if a client is readmitted to the same or different hospital or distinct unit within seven calendar days of discharge, unless the readmission is due to conditions unrelated to the previous admission. The department:

     (i) May perform a retrospective utilization review as described in WAC 388-550-1700 to determine the appropriate payment for the readmission.

     (ii) Determines if the combined hospital stay for the admission qualifies to be paid as an outlier. See WAC 388-550-3700 for DRG high-cost outliers and per diem high outliers for dates of admission on and after August 1, 2007.

     (h) For a client's day(s) of absence from the hospital or distinct unit.

     (i) For an inappropriate or nonemergency transfer of a client from one acute care hospital or distinct unit to another. The department may perform a prospective, concurrent, or retrospective utilization review as described in WAC 388-550-1700 to determine if the admission to the second hospital or distinct unit qualifies for payment. See also WAC 388-550-3600 for hospital transfers.

     (3) An interim billed inpatient hospital claim submitted for a client's continuous inpatient hospitalization of at least ninety calendar days, is considered for payment by the department only when the following occurs (this does not apply to interim billed hospital claims for which the department is not the primary payer (see (b) of this subsection), or to inpatient psychiatric admissions:

     (a) Each interim billed hospital claim must:

     (i) Be submitted in ninety calendar day intervals, unless the client is discharged prior to the next ninety calendar day interval.

     (ii) Document the entire date span between the client's date of admission and the current date of services billed, and include the following for that date span:

     (A) All inpatient hospital services provided; and

     (B) All applicable diagnosis codes and procedure codes.

     (iii) Be submitted as an adjustment to the previous interim billed hospital claim.

     (b) When the department is not the primary payer, the department pays an interim billed hospital claim when the criteria in (a) of this subsection are met and:

     (i) After ninety calendar days from the date the department becomes the primary payer; or

     (ii) The date a client eligible for both medicare and medicaid has exhausted the medicare lifetime reserve days for inpatient hospital care.

     (4) A hospital claim submitted for a client's continuous inpatient hospital admission of one hundred twenty calendar days or less is considered for payment by the department upon the client's discharge from the hospital or distinct unit. The department considers a client discharged from the hospital or distinct unit if one of the following occurs. The client:

     (a) Obtains a formal release issued by the hospital or distinct unit;

     (b) Dies in the hospital or distinct unit;

     (c) Transfers from the hospital or distinct unit as an acute care transfer; or

     (d) Transfers from the hospital or distinct unit to a designated psychiatric unit or facility, or a designated acute rehabilitations unit or facility.

     (5) To be eligible for payment, a hospital or distinct unit must bill an inpatient hospital claim:

     (a) In accordance with the current national uniform billing date element specifications:

     (i) Developed by the national uniform billing committee;

     (ii) Approved and/or modified by the Washington State Payer Group or the department; and

     (iii) In effect on the date of the client's admission.

     (b) In accordance with the current published international classification of diseases clinical modification coding guidelines in effect on the date of the client's admission;

     (c) Subject to the rules in this section and other applicable rules;

     (d) In accordance with the department's current published billing instructions and other documents; and

     (e) With the date span that covers the client's entire hospitalization. See subsection (3) of this section for when the department considers and pays an initial interim billed hospital claim and/or subsequent interim billed hospital claims; and

     (f) That requires an adjustment due to, but not limited to, charges that were not billed on the original paid claim (i.e., late charges), through submission of an adjusted hospital claim. Each adjustment to a paid hospital claim must provide complete documentation for the entire date span between the client's admission date and discharge date, and include the following for that date span:

     (i) All inpatient hospital services provided; and

     (ii) All applicable diagnosis codes and procedure codes.

     (6) The department ((limits payment for private room accommodations to)) allows the semiprivate room rate for a client's room charges, even if a hospital bills the private room rate. Room charges must not exceed the hospital's usual and customary charges to the general public as required by C.F.R. §447.271.

     (7) For inpatient hospital claims, the department allows hospitals an all-inclusive administrative date rate, beginning on the client's admission date, for those days of hospital stay in which a client does not meet criteria for acute inpatient level of care, but is not discharged because an appropriate placement outside the hospital is not available.

     (8) The department pays for observation services according to WAC 388-550-3000 (2)(b), 388-550-6000 (4)(c) and 388-550-7200 (2)(e) and other applicable rules.

     (9) The department determines its actual payment for an inpatient hospital admission by making any required adjustments from the calculations of the allowed covered charges. Adjustments include, but are not limited to, any client responsibility, any third party liability amount, including medicare part A and part B, and any other adjustments as determined by the department.

     (10) The department reduces payment rates to hospitals and distinct units for services provided to clients eligible under state-administered programs according to the hospital equivalency factor and/or ratable, or other department policy, as provided in WAC 388-550-4800.

     (11) All hospital providers must present final charges to the department within three hundred sixty-five days of the "statement covers period from date" shown on the claim. The state of Washington is not liable for payment based on billed charges received beyond three hundred sixty-five days from the "statement covers period from date" shown on the claim.

[Statutory Authority: RCW 74.08.090 and 74.09.500. 04-20-058, § 388-550-2900, filed 10/1/04, effective 11/1/04. 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, § 388-550-2900, filed 7/31/01, effective 8/31/01. Statutory Authority: RCW 74.09.090, 42 U.S.C. 1395x(v) and 1396r-4, 42 C.F.R. 447.271, 11303 and 2652. 99-14-027, § 388-550-2900, 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, § 388-550-2900, 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, § 388-550-2900, filed 12/18/97, effective 1/18/98.]

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

     (3) A DRG payment includes all covered hospital services provided to a client during days the client is eligible, but is not limited to:

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

     (b) Outpatient hospital services, including preadmission, emergency room, and observation services related to an inpatient hospital ((admission)) stay and provided within one calendar day of a client's inpatient hospital ((admission)) stay. 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 hospital 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)) The department's allowed amount for the 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. The total allowed amount also includes any high outlier amount calculated for claims. See WAC 388-550-3450 and 388-550-4600(4).

     (5) ((MAA's)) The department's DRG payment((s)) to a hospital((s)) may be adjusted when one or more of the following occur:

     (a) For dates of admission before August 1, 2007, a claim qualifies as a DRG high-cost or low-cost outlier, and for dates of admission on and after August 1, 2007, a claim qualifies as a DRG high 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 has third party liability coverage at the time of admission to the hospital or distinct unit;

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

     (((e))) (f) A client is discharged from an inpatient hospital stay and, within seven calendar days, is readmitted as an inpatient ((within seven days)) to the same hospital. ((MAA)) The department 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. Upon the department's retrospective review, an outlier payment may be made if the department determines the claim for combined hospital stays qualifies as a high-cost outlier or high outlier. See WAC 388-550-3700 for DRG high-cost outliers and high outliers.

     (6) The department does not pay for a client's day(s) of absence from the hospital.

     (7) The department pays an interim billed hospital claim or covered inpatient hospital services provided to an eligible client only when the interim billed claim meets the criteria in WAC 388-550-2900.

     (8) The department applies all applicable claim payment adjustments for client responsibility, third party liability, medicare, etc., to the payment.

[Statutory Authority: RCW 74.04.050, 74.08.090. 05-11-077, § 388-550-3000, filed 5/17/05, effective 6/17/05. 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.]

     (2) For the inpatient payment system effective for dates of admission before August 1, 2007, the department ((shall)) develops per diem proxies for accommodation cost centers using the median value of the hospital's per diem cost data within the affected hospital peer group.

     (3) For the inpatient payment system effective for dates of admission before August 1, 2007, the department ((shall)) also develops ratio of cost-to-charge (RCC) proxies for ancillary cost centers using the median value of the hospital's RCC data within the affected hospital peer group.

     (4) For the inpatient payment system effective for dates of admission on and after August 1, 2007, the department:

     (a) Develops per diem proxies for accommodation cost centers using the hospital's per diem cost data within the affected same type of services; and

     (b) Develops ratios of costs-to-charges (RCC) proxies for ancillary cost centers based on the hospital's aggregate ancillary costs to aggregate ancillary charges.

[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, § 388-550-3200, filed 12/18/97, effective 1/18/98.]

     (2) The six hospital peer groups are:

     (a) Group A, rural hospitals;

     (b) Group B, urban hospitals without medical education programs;

     (c) Group C, urban hospitals with medical education program;

     (d) Group D, specialty hospitals or other hospitals not easily assignable to the other five groups;

     (e) Group E, public hospitals participating in the "full cost" public hospital certified public expenditure (CPE) program; and

     (f) Group F, ((critical access)) hospitals approved by the department of health (DOH) as critical access hospitals.

     (3) For dates of admission before August 1, 2007, the department uses a cost cap at the seventieth percentile for hospitals in peer groups B and C for cost based conversion rate setting. All other peer groups are exempt from the cost caps for the following reasons:

     (a) Peer group A hospitals because they are paid under the ratio of costs-to-charges (RCC) methodology for Medicaid claims.

     (b) Peer group D hospitals because they are specialty hospitals without a common peer group on which to base comparisons.

     (c) Peer group E hospitals because they are paid under the "full cost" public hospital certified public expenditure (CPE) program RCC methodology for inpatient claims.

     (d) Peer group F hospitals because they are paid under the departmental weighted costs-to-charges (DWCC) methodology for ((Medicaid)) most hospital claims. See WAC 388-550-2598(14) for the payment methods for inpatient detoxification unit, distinct psychiatric unit, and distinct rehabilitation unit claims.

     (4) For dates of admission before August 1, 2007, the department calculates cost caps for peer groups B and C for cost based conversion rate setting based on the hospitals' base period costs after subtracting:

     (a) Indirect medical education costs, in accordance with WAC 388-550-3250(2), from the aggregate operating and capital costs of each hospital in the peer group; and

     (b) The cost of outlier cases from the aggregate costs in accordance with WAC 388-550-3350(1).

     (5) For dates of admission before August 1, 2007, the department uses the lesser of each individual hospital's calculated aggregate cost or the peer group's seventieth percentile cost cap as the base amount in calculating the individual hospital's adjusted cost-based conversion factor. After the peer group cost cap is calculated, the department adds back to the individual hospital's base amount its indirect medical education costs and appropriate outlier costs, as determined in WAC 388-550-3350(2).

     (6) For dates of admission before August 1, 2007, in cases where corrections or changes in an individual hospital's base-year cost or peer group assignment occur after peer group cost caps are calculated, the department updates the peer group cost caps involved only if the change in the individual hospital's base-year costs or peer group assignment will result in a five percent or greater change in the seventieth percentile of costs calculated for either its previous peer group category, its new peer group category, or both.

     (7) For dates of admission on and after August 1, 2007, the department continues to use the hospital peer groups in subsection (2) of this section to determine some rate setting and payment methods.

[Statutory Authority: RCW 74.08.090, 74.09.500. 06-08-046, § 388-550-3300, filed 3/30/06, effective 4/30/06. Statutory Authority: RCW 74.04.050, 74.08.090. 05-12-132, § 388-550-3300, filed 6/1/05, effective 7/1/05. 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, § 388-550-3300, 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, § 388-550-3300, filed 12/18/97, effective 1/18/98.]

     (a) The department ((shall)) removes the cost of low- and high-cost outlier cases from individual hospitals' aggregate costs before calculating the peer group cost cap.

     (b) After this initial step, all subsequent calculations involving outliers in subsections (2) through (5) of this section pertain only to high-cost outliers.

     (c) For a definition of outliers see WAC 388-550-1050((, Definitions)).

     (2) After an individual hospital's base period costs and its peer group cost cap are determined, the department ((shall)) adds the individual hospital's indirect medical education costs and an outlier cost adjustment back to:

     (a) The lesser of the hospital's calculated aggregate cost; or

     (b) The peer group's seventieth percentile cost cap.

     (3) The outlier cost adjustment is determined as follows to reduce the original high-cost outlier amount in proportion to the reduction in the hospital's base period costs as a result of the capping process:

     (a) If the individual hospital's aggregate operating, capital, and direct medical education costs for the base period are less than the seventieth percentile costs for the peer group, the entire high-cost outlier amount is added back.

     (b) A reduced high-cost outlier amount is added back if:

     (i) The individual hospital's aggregate base period costs are higher than the seventieth percentile for the peer group; and

     (ii) The hospital is capped at the seventieth percentile.

     (iii) The amount of the outlier added back is determined by multiplying the original high-cost outlier amount by the percentage obtained when the hospital's final cost cap, which is the peer group's seventieth percentile cost, is divided by its uncapped base period costs, as determined in WAC 388-550-3300(4).

     (4) The department ((shall)) pays high-cost outlier claims from the outlier set-aside pool. The department ((shall)) calculates an individual hospital's high-cost outlier set-aside as follows:

     (a) For each hospital, the department extracts utilization and paid claims data from the Medicaid Management Information System (MMIS) for the most recent twelve-month period for which the department estimates the MMIS has complete payment information.

     (b) Using the data in (a) of this subsection, the department determines the projected annual amount above the high-cost diagnosis related group (DRG) outlier threshold that the department paid to each hospital.

     (c) The department's projected high-cost outlier payment to the hospital determined in (b) of this subsection is divided by the department's total projected annual DRG payments to the hospital to arrive at a hospital-specific high-cost outlier percentage. This percentage becomes the hospital's outlier set-aside factor.

     (5) The department ((shall)) uses the individual hospital's outlier set-aside factor to reduce the hospital's CBCF by an amount that goes into a set-aside pool to pay for all high-cost outlier cases during the year. The department ((shall)) funds the outlier set-aside pool on hospitals' prior high-cost outlier experience. No cost settlements ((shall)) will be made to hospitals for outlier cases.

     (6) For dates of admission on and after August 1, 2007, the department includes statistical outlier claims for calculation of the conversion factors, per diem rates, and per case rates, and does not establish an outlier set-aside pool. The department does not include statistical outlier claims for calibration of DRG relative weights.

[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, § 388-550-3350, filed 12/18/97, effective 1/18/98.]

     (1) ((MAA)) For dates of admission before August 1, 2007, the department pays an acute PM&R rehabilitation ((facility)) hospital according to the individual hospital's current ratio of costs-to-charges as described in WAC 388-550-4500((, Payment method--RCC)). For dates of admission on and after August 1, 2007, the department pays an acute PM&R hospital for acute PM&R services based on a rehabilitation per diem rate. See WAC 388-550-3010 and 388-550-3460.

     (2) Acute PM&R room and board includes, but is not limited to:

     (a) Facility use;

     (b) Medical social services;

     (c) Bed and standard room furnishings; and

     (d) Dietary and nursing services.

     (3) When ((MAA)) the department authorizes administrative day(s) for a client as described in WAC 388-550-2561(8), ((MAA reimburses)) the department pays the facility:

     (a) The administrative day rate; and

     (b) For pharmaceuticals prescribed in the client's use during the administrative portion of the client's stay.

     (4) The department pays for transportation services provided to a client receiving acute PM&R services in an acute PM&R hospital((-based facility)) according to chapter 388-546 WAC.

[Statutory Authority: RCW 74.08.090, 74.09.520 and 42 C.F.R. 482.56. 03-06-047, § 388-550-3381, filed 2/28/03, effective 3/31/03. Statutory Authority: RCW 74.08.090 and 74.09.520. 99-17-111, § 388-550-3381, filed 8/18/99, effective 9/18/99.]

     (a) Adjusts hospital costs ((for case mix under the diagnosis-related group (DRG) payment systems.)) used to calculate the conversion factor and per diem rates during the rebasing process by the hospital's case-mix index; and

     (b) ((The department shall)) Calculates ((a)) the case-mix index (CMI) for each individual hospital to measure the relative cost for treating medicaid and SCHIP cases in a given hospital.

     (2) The department ((shall)) calculates the CMI for each hospital using medicaid and SCHIP admissions data from the individual hospital and the hospital's base period cost report((, as described in)). See WAC 388-550-3150. The CMI is calculated for each hospital by summing all relative weights for all claims in the dataset, and dividing the sum of the relative weights by the number of claims. That amount represents the relative acuity of the claims. The hospital-specific CMI is calculated as follows:

     (a) The department ((shall multiply)) multiplies the number of medicaid and SCHIP admissions to the hospital for a specific DRG classification by the relative weight for that DRG classification. The department ((shall)) repeats this process for each DRG billed by the hospital.

     (b) The department ((shall)) adds together the products in (a) of this subsection for all of the medicaid and SCHIP admissions to the hospital in the base year.

     (c) The department ((shall)) divides the sum obtained in (b) of this subsection by the corresponding number of medicaid and SCHIP hospital admissions.

     (d) Example: If the average case mix index for a group of hospitals is 1.0, a CMI of 1.0 or greater for a hospital in that group means that the hospital has treated a mix of patients in the more costly DRG((s)) classifications. A CMI of less than 1.0 indicates a mix of patients in the less costly DRG((s)) classifications.

     (3) The department ((shall)) recalculates each hospital's case-mix index periodically, but no less frequently than each time rebasing is done.

[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, § 388-550-3400, filed 12/18/97, effective 1/18/98.]

     (2) For dates of admission on and after August 1, 2007, except for rebase implementation years, the department makes adjustments to the hospital's DRG conversion factors, per diem rates, and per case rates, by an inflation factor (vendor rate increase), as authorized and determined by the legislature and supported in the state's budget.

[Statutory Authority: RCW 74.09.090, 42 U.S.C. 1395x(v) and 1396r-4, 42 C.F.R. 447.271, 11303 and 2652. 99-14-027, § 388-550-3500, 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, § 388-550-3500, 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, § 388-550-3500, filed 12/18/97, effective 1/18/98.]

     The following section of the Washington Administrative Code is repealed:

WAC 388-550-2000

Medical criteria--Transplant services.

© Washington State Code Reviser's Office