EMERGENCY RULES
SOCIAL AND HEALTH SERVICES
(Medicaid Purchasing Administration)
Effective Date of Rule: July 1, 2011.
Purpose: Upon approval from the Centers for Medicare and Medicaid Services (CMS) of the department's state plan amendment, the department will implement a new alternative payment methodology for federally qualified health centers (FQHCs) and rural health clinics (RHCs) for services provided on and after July 1, 2011.
Citation of Existing Rules Affected by this Order: Amending WAC 388-548-1400 and 388-549-1400.
Statutory Authority for Adoption: RCW 74.08.090.
Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest; that state or federal law or federal rule or a federal deadline for state receipt of federal funds requires immediate adoption of a rule; and that in order to implement the requirements or reductions in appropriations enacted in any budget for fiscal years 2009, 2010, or 2011, which necessitates the need for the immediate adoption, amendment, or repeal of a rule, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the fiscal needs or requirements of the agency.
Reasons for this Finding: The implementation of these emergency rules are necessitated by the level of appropriations made by the legislature in 2ESHB 1087, for services provided by FQHCs and RHCs as of July 1, 2011, and HB 1248 which extends the allowance of emergency rule filing through fiscal year 2013. Delaying this adoption could jeopardize the state's ability to provide mandatory medicaid services to a significant number of DSHS clients.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 2, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 2, Repealed 0.
Date Adopted: June 30, 2011.
Katherine I. Vasquez
Rules Coordinator
4277.10 (2) ((Effective)) For services provided beginning January
1, 2009, FQHCs have the choice to ((continue being)) be
reimbursed under the PPS or to be reimbursed under an
alternative payment methodology (APM), as authorized by 42
U.S.C. 1396a (bb)(6). As required by 42 U.S.C. 1396a (bb)(6),
payments made under the APM ((must)) will be at least as much
as payments that would have been made under the PPS.
(3) The department calculates the FQHC's PPS encounter rate as follows:
(a) Until the FQHC's first audited cost report is available, the department pays an average encounter rate of other similar FQHCs within the state, otherwise known as an interim rate;
(b) Upon availability of the FQHC's first audited
medicaid cost report, the department sets the ((clinic's))
FQHC's encounter rate at one hundred percent of its total
reasonable costs as defined in the cost report. The FQHC
receives this rate for the remainder of the calendar year
during which the audited cost report became available. Thereafter, the encounter rate is then inflated each January 1
by the medicare economic index (MEI) for primary care
services.
(4) For FQHCs in existence during calendar years 1999 and
2000, the department sets the payment prospectively using a
weighted average of one hundred percent of the ((center's))
FQHC's total reasonable costs for calendar years 1999 and 2000
and adjusted for any increase or decrease in the scope of
services furnished during the calendar year 2001 to establish
a base encounter rate.
(a) The department adjusts a PPS base encounter rate to account for an increase or decrease in the scope of services provided during calendar year 2001 in accordance with WAC 388-548-1500.
(b) The PPS base encounter rates are determined using audited cost reports, and each year's rate is weighted by the total reported encounters. The department does not apply a capped amount to these base encounter rates. The formula used to calculate the base encounter rate is as follows:
| Specific FQHC Base Encounter Rate = | (1999 Rate x 1999 Encounters) + (2000 Rate x 2000 Encounters) |
| (1999 Encounters + 2000 Encounters) for each FQHC |
(5) The department calculates the FQHC's APM encounter rate for services provided during the period beginning January 1, 2009, and ending April 6, 2011, as follows:
(a) ((Beginning January 1, 2009,)) The APM utilizes the
FQHC base encounter rates, as described in WAC 388-548-1400
(4)(b).
(((i))) (b) The base rates are adjusted to reflect any
valid changes in scope of service between years 2002 and 2009.
(((ii))) (c) The adjusted base rates are then inflated by
each annual percentage, from years 2002 through 2009, of the
APM index. The result is the year 2009 APM rate for each FQHC
that chooses to be reimbursed under the APM.
(6) Upon approval from the federal centers for medicare and medicaid services (CMS) of the department's state plan amendment, the department calculates the FQHC's APM encounter rate for services provided during the period beginning April 7, 2011, and ending June 30, 2011, as described in this section. Pending state plan approval by CMS, the department will continue to pay FQHCs at the encounter rate described in subsection (5) of this section. For all payments made for services between April 7, 2011, and the date CMS approves the state plan amendment, the department will recoup from FQHCs any amount paid in excess of the encounter rate established in this section. The APM utilizes each FQHC's PPS rate for each calendar year and inflates it by five percent.
(((b) The department will ensure that the APM pays an
amount that is at least equal to the PPS, the annual inflator
used to increase the APM rates is the greater of the APM index
or the MEI.
(c) The department will periodically rebase the APM rates. The department will not rebase rates determined under the PPS.))
(((6))) (7) Upon approval from CMS of the department's
state plan amendment, for services provided on and after July
1, 2011, each FQHC will have the choice of receiving either
its PPS rate, as determined under the method described in
subsection (3) of this section or a rate determined under a
revised APM.
(a) For all payments made for services between July 1, 2011, and the date CMS approves the state plan amendment, the department will recoup from FQHCs any amount in excess of the encounter rate established in this section.
(b) The revised APM will be as follows:
(i) For FQHCs that rebased their rate effective January 1, 2010, their allowed cost per visit during the cost report year inflated by the cumulative percentage increase in the MEI between the cost report year and 2011.
(ii) For FQHCs that did not rebase in 2010, their rate is based on their PPS base rate from 2001 (or subsequent year for FQHCs receiving their initial FQHC designation after 2002) inflated by the cumulative percentage increase in the IHS Global Insight index from the base year through calendar year 2008 and the cumulative increase in the MEI from 2008 through 2011. The rates will be inflated by MEI effective January 1, 2012, and each January 1 thereafter.
(c) When the APM methodology is in effect, the state will periodically rebase the FQHC encounter rates using the FQHC cost reports and other relevant data. Rebasing will be done only for FQHCs that are reimbursed under the APM.
(d) The department will ensure that the payments made under the APM are at least equal to the payments that would be made under the PPS.
(8) The department limits encounters to one per client, per day except in the following circumstances:
(a) The visits occur with different healthcare professionals with different specialties; or
(b) There are separate visits with unrelated diagnoses.
(((7))) (9) FQHC services and supplies incidental to the
provider's services are included in the encounter rate
payment.
(((8))) (10) Payments for nonFQHC services provided in an
FQHC are made on a fee-for-service basis using the
department's published fee schedules. NonFQHC services are
subject to the coverage guidelines and limitations listed in
chapters 388-500 through 557 WAC.
(((9))) (11) For clients enrolled with a managed care
organization (MCO), covered FQHC services are paid for by that
plan.
(((10))) (12) Only clients enrolled in Title XIX
(medicaid) or Title XXI (CHIP) are eligible for encounter or
enhancement payments. The department does not pay the
encounter rate or the enhancement rate for clients in
state-only medical programs. Services provided to clients in
state-only medical programs are considered fee-for-service
regardless of the type of service performed.
(((11))) (13) For clients enrolled with ((a managed care
organization (MCO))) an MCO, the department pays each FQHC a
supplemental payment in addition to the amounts paid by the
MCO. The supplemental payments, called enhancements, are paid
in amounts necessary to ensure compliance with 42 U.S.C. 1396a
(bb)(5)(A).
(a) The FQHCs receive an enhancement payment each month for each managed care client assigned to them by an MCO.
(b) To ensure that the appropriate amounts are paid to
each FQHC, the department performs an annual reconciliation of
the enhancement payments. For each FQHC, the department will
compare the amount actually paid to the amount determined by
the following formula: (((Managed)) managed care encounters
times encounter rate) less FFS equivalent of MCO services. If
the ((center)) FQHC has been overpaid, the department will
recoup the appropriate amount. If the ((center)) FQHC has
been underpaid, the department will pay the difference.
[Statutory Authority: RCW 74.08.090, BIPA of 2000 Section 702, sections 201 and 209 of 2009-2011 budget bill, and 42 U.S.C. 1396a(bb). 10-09-002, § 388-548-1400, filed 4/7/10, effective 5/8/10.]
4278.12 ((Effective)) (2) For services provided beginning January
1, 2009, RHCs have the choice to ((continue being)) be
reimbursed under the PPS or be reimbursed under an alternative
payment methodology (APM), as authorized by 42 USC 1396a
(bb)(6). As required by 42((.U.S.C.)) USC 1396a (bb)(6), payments made under the APM ((must)) will
be at least as much as payments that would have been made
under the PPS.
(((2))) (3) The department calculates the RHC's PPS
encounter rate for RHC core services as follows:
(a) Until the RHC's first audited medicare cost report is available, the department pays an average encounter rate of other similar RHCs (whether the RHC is classified as hospital-based or free-standing) within the state, otherwise known as an interim rate.
(b) Upon availability of the RHC's audited medicare cost
report, the department sets the ((clinic's)) RHC's encounter
rate at one hundred percent of its costs as defined in the
cost report divided by the total number of encounters the
((clinic)) RHC has provided during the time period covered in
the audited cost report. The RHC will receive this rate for
the remainder of the calendar year during which the audited
cost report became available. The encounter rate is then
inflated each January 1 by the medicare economic index (MEI)
for primary care services.
(((3))) (4) For RHCs in existence during calendar years
1999 and 2000, the department sets the payment prospectively
using a weighted average of one hundred percent of the
((clinic's)) RHC's total reasonable costs for calendar years
1999 and 2000 and adjusted for any increase or decrease in the
scope of services furnished during the calendar year 2001 to
establish a base encounter rate.
(a) The department adjusts a PPS base encounter rate to account for an increase or decrease in the scope of services provided during calendar year 2001 in accordance with WAC 388-549-1500.
(b) The PPS base encounter rates are determined using medicare's audited cost reports and each year's rate is weighted by the total reported encounters. The department does not apply a capped amount to these base encounter rates. The formula used to calculate the base encounter rate is as follows:
| Specific RHC Base Encounter Rate = | (1999 Rate x 1999 Encounters) + (2000 Rate x 2000 Encounters) |
| (1999 Encounters + 2000 Encounters) for each RHC |
(((4))) (5) The department calculates the RHC's APM
encounter rate for services provided during the period
beginning January 1, 2009, and ending April 6, 2011, as
follows:
(a) ((Beginning January 1, 2009,)) The APM utilizes the
RHC base encounter rates as described in WAC 388-549-1400
(((3)(b)))(4)(b).
(b) The base rates are inflated by each annual percentage, from years 2002 through 2009, of the APM index.
(c) The result is the year 2009 APM rate for each RHC that chooses to be reimbursed under the APM.
(6) Upon approval from the federal centers for medicare and medicaid services (CMS) of the department's state plan amendment, the department calculates the RHC's APM encounter rate for services provided during the period beginning April 7, 2011, and ending June 30, 2011, as described in this section. Pending state plan approval by CMS, the department will continue to pay RHCs at the encounter rate described in subsection (5) of this section. For all payments made for services between April 7, 2011, and the date CMS approves the state plan amendment, the department will recoup from RHCs any amount paid in excess of the encounter rate established in this section. The APM utilizes each RHC's PPS rate for each calendar year and inflates it by five percent.
(((b) To ensure that the APM pays an amount that is at
least equal to the PPS in accordance with 42 USC 1396a
(bb)(6), the annual inflator used to increase the APM rates is
the greater of the APM index or the MEI.
(c) The department periodically rebases the APM rates. The department does not rebase rates determined under the PPS.
(d) When rebasing the APM encounter rates, the department applies a productivity standard to the number of visits performed by each practitioner group (physicians and mid-levels) to determine the number of encounters to be used in each RHC's rate calculation. The productivity standards are determined by reviewing all available RHC cost reports for the rebasing period and setting the standards at the levels necessary to allow ninety-five percent of the RHCs to meet the standards. The encounter rates of the clinics that meet the standards are calculated using each clinic's actual number of encounters. The encounter rates of the other five percent of clinics are calculated using the productivity standards. This process is applied at each rebasing, so the actual productivity standards may change each time encounter rates are rebased.))
(((5))) (7) Upon approval from CMS of the department's
state plan amendment, for services provided on and after July
1, 2011, each RHC will have the choice of receiving either its
PPS rate, as determined under the method described in
subsection (3) of this section, or a rate determined under a
revised APM.
(a) For all payments made for services between July 1, 2011, and the date CMS approves the state plan amendment, the department will recoup from RHCs any amount paid in excess of the encounter rate established in this section.
(b) The revised APM will be as follows:
(i) For RHCs that rebased their rate effective January 1, 2010, their allowed cost per visit during the cost report year inflated by the cumulative percentage increase in the MEI between the cost report year and 2011.
(ii) For RHCs that did not rebase in 2010, their rate is based on their PPS base rate from 2002 (or subsequent year for RHCs receiving their initial RHC designation after 2002) inflated by the cumulative percentage increase in the IHS Global Insight index from the base year through calendar year 2008 and the cumulative increase in the MEI from 2008 through 2011. The rate will be inflated by the MEI effective January 1, 2012, and each January 1 thereafter.
(c) When the APM methodology is in effect, the state will periodically rebase the RHC encounter rate using the RHC cost reports and other relevant data. Rebasing will be done only for RHCs that are reimbursed under the APM.
(d) The department will ensure that the payments made under the APM are at least equal to the payments that would be made under the PPS.
(8) The department pays for one encounter, per client, per day except in the following circumstances:
(a) The visits occur with different healthcare professionals with different specialties; or
(b) There are separate visits with unrelated diagnoses.
(((6))) (9) RHC services and supplies incidental to the
provider's services are included in the encounter rate
payment.
(((7))) (10) Payments for non-RHC services provided in an
RHC are made on a fee-for-service basis using the department's
published fee schedules. Non-RHC services are subject to the
coverage guidelines and limitations listed in chapters 388-500
through 388-557 WAC.
(((8))) (11) For clients enrolled with a managed care
organization (MCO), covered RHC services are paid for by that
plan.
(((9))) (12) The department does not pay the encounter
rate or the enhancements for clients in state-only programs. Services provided to clients in state-only programs are
considered fee-for-service, regardless of the type of service
performed.
(((10))) (13) For clients enrolled with ((a managed care
organization (MCO))) an MCO, the department pays each RHC a
supplemental payment in addition to the amounts paid by the
MCO. The supplemental payments, called enhancements, are paid
in amounts necessary to ensure compliance with 42 USC 1396a
(bb)(5)(A).
(a) The RHCs receive an enhancement payment each month for each managed care client assigned to them by an MCO.
(b) To ensure that the appropriate amounts are paid to
each RHC, the department performs an annual reconciliation of
the enhancement payments. For each RHC, the department will
compare the amount actually paid to the amount determined by
the following formula: (managed care encounters times
encounter rate) less fee-for-service equivalent of MCO
services. If the ((clinic)) RHC has been overpaid, the
department will recoup the appropriate amount. If the
((clinic)) RHC has been underpaid, the department will pay the
difference.
[Statutory Authority: RCW 74.08.090, 74.09.510, 74.09.522, 42 U.S.C. 1396a(bb), 42 C.F.R. 405.2472, and 42 C.F.R. 491. 10-09-030, § 388-549-1400, filed 4/13/10, effective 5/14/10. Statutory Authority: RCW 74.08.090, 74.09.510, 74.09.522, 42 C.F.R. 405.2472, 42 C.F.R. 491. 08-05-011, § 388-549-1400, filed 2/7/08, effective 3/9/08.]