Original Notice.

     Preproposal statement of inquiry was filed as WSR 11-21-067.

     Title of Rule and Other Identifying Information: WAC 182-550-4650 "Full cost" public hospital certified public expenditure (CPE) payment program and 182-550-5400 Payment method -- Public hospital disproportionate share hospital (PHDSH).

     Hearing Location(s): Health Care Authority (HCA), Cherry Street Plaza Building, Conference Room 106A, Apple Room, 626 8th Avenue, Olympia, WA 98504 (metered public parking is available street side around building. A map is available at http://maa.dshs.wa.gov/pdf/CherryStreetDirectionsNMap.pdf or directions can be obtained by calling (360) 725-1000), on January 24, 2012, at 10:00 a.m.

     Date of Intended Adoption: Not sooner than January 25, 2012.

     Submit Written Comments to: HCA Rules Coordinator, P.O. Box 45504, Olympia, WA 98504-5504, delivery 626 8th Avenue, Olympia, WA 98504, e-mail arc@hca.wa.gov, fax (360) 586-9727, by 5:00 p.m. on January 24, 2012.

     Assistance for Persons with Disabilities: Contact Kelly Richters by January 13, 2012, TTY/TDD (800) 848-5429 or (360) 725-1307 or e-mail kelly.richters@hca.wa.gov.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The agency is revising the rule to clarify that hospitals must be "operated" by a public hospital district (PHD) to qualify as a CPE hospital rather than "owned" by a PHD. This change ensures that the state remains in compliance with 42 C.F.R. 433.51(b). This rule revision also includes housekeeping changes such as replacing "department" with "agency" and cross-reference fixes from TITLE 388 WAC to TITLE 182 WAC as a result of the merge with health care authority on July 1, 2011.

     Reasons Supporting Proposal: See Purpose statement above.

     Statutory Authority for Adoption: 42 C.F.R. 433.51(b), RCW 41.05.021.

     Statute Being Implemented: 42 C.F.R. 433.51(b).

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: HCA, governmental.

     Name of Agency Personnel Responsible for Drafting: Wendy Boedigheimer, P.O. Box 45504, Olympia, WA 98504-5504, (360) 725-1306; Implementation and Enforcement: Lillian Erola, P.O. Box 45534, Olympia, WA 98504-5534, (360) 725-1877.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The joint administrative rules review committee has not requested the filing of a small business economic impact statement, and there will be no costs to small businesses.

     A cost-benefit analysis is not required under RCW 34.05.328. RCW 34.05.328 does not apply to HCA rules unless requested by the joint administrative rules [review] committee or applied voluntarily.

December 13, 2011

Kevin M. Sullivan

Rules Coordinator

OTS-4524.1

AMENDATORY SECTION(Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)

WAC 182-550-4650   "Full cost" public hospital certified public expenditure (CPE) payment program.   (1) The ((department's)) agency's "full cost" public hospital certified public expenditure (CPE) payment program provides payments to participating hospitals based on the "full cost" of covered medically necessary services and requires the expenditure of local funds in lieu of state funds to qualify for federal matching funds. The ((department's)) agency's payments to participating hospitals equal the federal matching amount for allowable costs. The ((department)) agency uses the ratio of costs-to-charges (RCC) method described in WAC ((388-550-4500)) 182-550-4500 to determine "full cost."

     (2) Only the following facilities are reimbursed through the "full cost" public hospital CPE payment program:

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

     (i) ((Owned)) Operated by public hospital districts; 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.

     (3) Payments made under the CPE payment program are limited to medically necessary services provided to medical assistance clients eligible for inpatient hospital services.

     (4) Each hospital described in subsection (2) of this section is responsible to provide certified public expenditures as the required state match for claiming federal medicaid funds.

     (5) The ((department)) agency determines the actual payment for inpatient hospital services under the CPE payment program by:

     (a) Multiplying the hospital's medicaid RCC ((rate)) by the covered charges (to determine allowable costs), then;

     (b) Subtracting the client's responsibility and any third party liability (TPL) from the amount derived in (a) of this subsection, then;

     (c) Multiplying the state's federal ((matching)) medical assistance percentage (FMAP) by the amount derived in (b) of this subsection.

[11-14-075, recodified as § 182-550-4650, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090, 74.09.500. 06-08-046, § 388-550-4650, filed 3/30/06, effective 4/30/06. Statutory Authority: RCW 74.04.050, 74.08.090. 05-12-132, § 388-550-4650, filed 6/1/05, effective 7/1/05.]

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

     (i) ((Owned)) Operated by a public hospital district; 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 PHDSH payments to a hospital eligible under this program may not exceed the hospital's disproportionate share hospital (DSH) cap calculated according to WAC ((388-550-4900)) 182-550-4900(10). The hospital receives only the federal matching assistance percentage of the total computable payment amount.

     (3) Hospitals receiving payment under the PHDSH program must 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)) agency federally required medicaid cost report schedules apportioning inpatient and outpatient costs, beginning with the services provided during state fiscal year 2006. See WAC ((388-550-5410)) 182-550-5410.

     (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)) agency 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)) 182-550-4900 (13) and (14), and WAC ((388-550-4670)) 182-550-4670.

[11-14-075, recodified as § 182-550-5400, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090, 74.09.500. 07-14-090, § 388-550-5400, filed 6/29/07, effective 8/1/07; 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.]

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