Original Notice.

     Preproposal statement of inquiry was filed as WSR 11-23-088.

     Title of Rule and Other Identifying Information: WAC 182-543-5500 Covered -- Medical supplies and related services, 182-543-9100 Reimbursement method -- Other DME; Reimbursement method -- Wheelchairs, 182-543-9200 Reimbursement method -- Wheelchairs, 182-543-9300 Reimbursement method -- Prosthetics and orthotics, 182-543-9400 Reimbursement method -- Medical supplies and related services, and possible other related WAC sections.

     Hearing Location(s): Health Care Authority (HCA), Cherry Street Plaza Building, Apple Conference Room (106A), 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 March 6, 2012, at 10:00 a.m.

     Date of Intended Adoption: Not sooner than March 7, 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 March 6, 2012.

     Assistance for Persons with Disabilities: Contact Kelly Richters by February 27, 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: During the reorganization of chapter 182-543 WAC filed under WSR 11-14-052, long-standing policy language regarding "base year" in the reimbursement sections was unintentionally deleted. This rule-making action reinstates the language that was deleted. This rule revision also clarifies in WAC 182-543-5500, that prior authorization is required for the purchase of replacement batteries for wheelchairs.

     Reasons Supporting Proposal: See Purpose above.

     Statutory Authority for Adoption: RCW 41.05.021.

     Statute Being Implemented: RCW 41.05.021.

     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 L. Boedigheimer, HCA, P.O. Box 45504, Olympia, WA, (360) 725-1306; Implementation and Enforcement: Melissa Usitalo, HCA, P.O. Box 45506, Olympia, WA, (360) 725-1570.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The agency has analyzed the proposed rules and concludes that they do not impose more than minor costs for affected 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.

January 25, 2012

Kevin M. Sullivan

Rules Coordinator

OTS-4404.1

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

WAC 182-543-5500   Covered--Medical supplies and related services.   The ((department)) agency covers, without prior authorization unless otherwise specified, the following medical supplies and related services:

     (1) Antiseptics and germicides:

     (a) Alcohol (isopropyl) or peroxide (hydrogen) - One pint per month;

     (b) Alcohol wipes (box of two hundred) - One box per month;

     (c) Betadine or pHisoHex solution - One pint per month;

     (d) Betadine or iodine swabs/wipes (box of one hundred) - One box per month;

     (2) Bandages, dressings, and tapes;

     (3) Batteries - Replacement batteries:

     (a) The ((department)) agency pays for the purchase of replacement batteries for wheelchairs with prior authorization.

     (b) The ((department)) agency does not pay for wheelchair replacement batteries that are used for speech generating devices (SGDs) or ventilators. See WAC ((388-543-3400)) 182-543-3400 for speech generating devices and chapter ((388-548)) 182-548 WAC for ventilators.

     (4) Blood monitoring/testing supplies:

     (a) Replacement battery of any type, used with a client-owned, medically necessary home or specialized blood glucose monitor - One in a three-month period;

     (b) Spring-powered device for lancet - One in a six-month period;

     (c) Diabetic test strips as follows:

     (i) For clients, twenty years of age and younger, as follows:

     (A) Insulin dependent, three hundred test strips and three hundred lancets per client, per month.

     (B) For noninsulin dependent, one hundred test strips and one hundred lancets per client, per month.

     (ii) For clients, twenty-one years of age and older:

     (A) Insulin dependent, one hundred test strips and one hundred lancets per client, per month.

     (B) For noninsulin dependent, one hundred test strips and one hundred lancets per client, every three months.

     (iii) For pregnant women with gestational diabetes, the ((department)) agency pays for the quantity necessary to support testing as directed by the client's physician, up to sixty days postpartum.

     (d) See WAC ((388-543-5500)) 182-543-5500(12) for blood glucose monitors.

     (5) Braces, belts, and supportive devices:

     (a) Knee brace (neoprene, nylon, elastic, or with a hinged bar) - Two per twelve-month period;

     (b) Ankle, elbow, or wrist brace - Two per twelve-month period;

     (c) Lumbosacral brace, rib belt, or hernia belt - One per twelve-month period;

     (d) Cervical head harness/halter, cervical pillow, pelvic belt/harness/boot, or extremity belt/harness - One per twelve-month period.

     (6) Decubitus care products:

     (a) Cushion (gel, sacroiliac, or accuback) and cushion cover (any size) - One per twelve-month period;

     (b) Synthetic or lamb's wool sheepskin pad - One per twelve-month period;

     (c) Heel or elbow protectors - Four per twelve-month period.

     (7) Ostomy supplies:

     (a) Adhesive for ostomy or catheter: Cement; powder; liquid (e.g., spray or brush); or paste (any composition, e.g., silicone or latex) - Four total ounces per month.

     (b) Adhesive or nonadhesive disc or foam pad for ostomy pouches - Ten per month.

     (c) Adhesive remover or solvent - Three ounces per month.

     (d) Adhesive remover wipes, fifty per box - One box per month.

     (e) Closed pouch, with or without attached barrier, with a one- or two-piece flange, or for use on a faceplate - Sixty per month.

     (f) Closed ostomy pouch with attached standard wear barrier, with built-in one-piece convexity - Ten per month.

     (g) Continent plug for continent stoma - Thirty per month.

     (h) Continent device for continent stoma - One per month.

     (i) Drainable ostomy pouch, with or without attached barrier, or with one- or two-piece flange - Twenty per month.

     (j) Drainable ostomy pouch with attached standard or extended wear barrier, with or without built-in one-piece convexity - Twenty per month.

     (k) Drainable ostomy pouch for use on a plastic or rubber faceplate (only one type of faceplate allowed) - Ten per month.

     (l) Drainable urinary pouch for use on a plastic, heavy plastic, or rubber faceplate (only one type of faceplate allowed) - Ten per month.

     (m) Irrigation bag - Two every six months.

     (n) Irrigation cone and catheter, including brush - Two every six months.

     (o) Irrigation supply, sleeve - One per month.

     (p) Ostomy belt (adjustable) for appliance - Two every six months.

     (q) Ostomy convex insert - Ten per month.

     (r) Ostomy ring - Ten per month.

     (s) Stoma cap - Thirty per month.

     (t) Ostomy faceplate - Ten per month. The ((department)) agency does not pay for either of the following when billed in combination with an ostomy faceplate:

     (i) Drainable pouches with plastic face plate attached; or

     (ii) Drainable pouches with rubber face plate.

     (8) Syringes and needles;

     (9) Urological supplies - Diapers and related supplies:

     (a) The standards and specifications in this subsection apply to all disposable incontinent products (e.g., briefs, diapers, pull-up pants, underpads for beds, liners, shields, guards, pads, and undergarments). See subsections (b), (c), (d), and (e) of this section for additional standards for specific products. All of the following apply to all disposable incontinent products:

     (i) All materials used in the construction of the product must be safe for the client's skin and harmless if ingested;

     (ii) Adhesives and glues used in the construction of the product must not be water-soluble and must form continuous seals at the edges of the absorbent core to minimize leakage;

     (iii) The padding must provide uniform protection;

     (iv) The product must be hypoallergenic;

     (v) The product must meet the flammability requirements of both federal law and industry standards; and

     (vi) All products are covered for client personal use only.

     (b) In addition to the standards in subsection (a) of this section, diapers must meet all the following specifications. They must:

     (i) Be hourglass shaped with formed leg contours;

     (ii) Have an absorbent filler core that is at least one-half inch from the elastic leg gathers;

     (iii) Have leg gathers that consist of at least three strands of elasticized materials;

     (iv) Have an absorbent core that consists of cellulose fibers mixed with absorbent gelling materials;

     (v) Have a back sheet that is moisture impervious and is at least 1.00 mm thick, designed to protect clothing and linens;

     (vi) Have a top sheet that resists moisture returning to the skin;

     (vii) Have an inner lining that is made of soft, absorbent material; and

     (viii) Have either a continuous waistband, or side panels with a tear-away feature, or refastenable tapes, as follows:

     (A) For child diapers, at least two tapes, one on each side.

     (B) The tape adhesive must release from the back sheet without tearing it, and permit a minimum of three fastening/unfastening cycles.

     (c) In addition to the standards in subsection (a) of this section, pull-up pants and briefs must meet the following specifications. They must:

     (i) Be made like regular underwear with an elastic waist or have at least four tapes, two on each side or two large tapes, one on each side;

     (ii) Have an absorbent core filler that is at least one-half inch from the elastic leg gathers;

     (iii) Have an absorbent core that consists of cellulose fibers mixed with absorbent gelling;

     (iv) Have leg gathers that consist of at least three strands of elasticized materials;

     (v) Have a back sheet that is moisture impervious, is at least 1.00 mm thick, and is designed to protect clothing and linens;

     (vi) Have an inner lining made of soft, absorbent material; and

     (vii) Have a top sheet that resists moisture returning to the skin.

     (d) In addition to the standards in subsection (a) of this section, underpads are covered only for incontinent purposes in a client's bed and must meet the following specifications:

     (i) Have an absorbent layer that is at least one and one-half inches from the edge of the underpad;

     (ii) Be manufactured with a waterproof backing material;

     (iii) Be able to withstand temperatures not to exceed one hundred-forty degrees Fahrenheit;

     (iv) Have a covering or facing sheet that is made of nonwoven, porous materials that have a high degree of permeability, allowing fluids to pass through and into the absorbent filler. The patient contact surface must be soft and durable;

     (v) Have filler material that is highly absorbent. It must be heavy weight fluff filler or the equivalent; and

     (vi) Have four-ply, nonwoven facing, sealed on all four sides.

     (e) In addition to the standards in subsection (a) of this section, liners, shields, guards, pads, and undergarments are covered for incontinence only and must meet the following specifications:

     (i) Have channels to direct fluid throughout the absorbent area, and leg gathers to assist in controlling leakage, and/or be contoured to permit a more comfortable fit;

     (ii) Have a waterproof backing designed to protect clothing and linens;

     (iii) Have an inner liner that resists moisture returning to the skin;

     (iv) Have an absorbent core that consists of cellulose fibers mixed with absorbent gelling materials;

     (v) Have pressure-sensitive tapes on the reverse side to fasten to underwear; and

     (vi) For undergarments only, be contoured for good fit, have at least three elastic leg gathers, and may be belted or unbelted.

     (f) The ((department)) agency pays for urological products when they are used alone. The following are examples of products which the ((department)) agency does not pay for when used in combination with each other:

     (i) Disposable diapers;

     (ii) Disposable pull-up pants and briefs;

     (iii) Disposable liners, shields, guards, pads, and undergarments;

     (iv) Rented reusable diapers (e.g., from a diaper service); and

     (v) Rented reusable briefs (e.g., from a diaper service), or pull-up pants.

     (g) The ((department)) agency approves a client's use of a combination of products only when the client uses different products for daytime and nighttime use. Example: pull-up pants for daytime use and disposable diapers for nighttime use. The total quantity of all products in this section used in combination cannot exceed the monthly limitation for the product with the highest limit.

     (h) Purchased disposable diapers (any size) are limited to two hundred per month for clients three years of age and older.

     (i) Reusable cloth diapers (any size) are limited to:

     (i) Purchased - Thirty-six per year; and

     (ii) Rented - Two hundred per month.

     (j) Disposable briefs and pull-up pants (any size) are limited to:

     (i) Two hundred per month for a client age three to eighteen years of age; and

     (ii) One hundred fifty per month for a client nineteen years of age and older.

     (k) Reusable briefs, washable protective underwear, or pull-up pants (any size) are limited to:

     (i) Purchased - Four per year.

     (ii) Rented - One hundred fifty per month.

     (l) Disposable pant liners, shields, guards, pads, and undergarments are limited to two hundred per month.

     (m) Underpads for beds are limited to:

     (i) Disposable (any size) - One hundred eighty per month.

     (ii) Purchased, reusable (large) - Forty-two per year.

     (iii) Rented, reusable (large) - Ninety per month.

     (10) Urological supplies - Urinary retention:

     (a) Bedside drainage bag, day or night, with or without anti-reflux device, with or without tube - Two per month. The ((department)) agency does not pay for these when billed in combination with any of the following:

     (i) With extension drainage tubing for use with urinary leg bag or urostomy pouch (any type, any length), with connector/adapter; and/or

     (ii) With an insertion tray with drainage bag, and with or without catheter.

     (b) Bedside drainage bottle, with or without tubing - Two per six month period.

     (c) Extension drainage tubing (any type, any length), with connector/adapter, for use with urinary leg bag or urostomy pouch. The ((department)) agency does not pay for these when billed in combination with a vinyl urinary leg bag, with or without tube.

     (d) External urethral clamp or compression device (not be used for catheter clamp) - Two per twelve-month period.

     (e) Indwelling catheters (any type) - Three per month.

     (f) Insertion trays:

     (i) Without drainage bag and catheter - One hundred and twenty per month. The ((department)) agency does not pay for these when billed in combination with other insertion trays that include drainage bag, catheters, and/or individual lubricant packets.

     (ii) With indwelling catheters - Three per month. The ((department)) agency does not pay for these when billed in combination with other insertion trays without drainage bag and/or indwelling catheter, individual indwelling catheters, and/or individual lubricant packets.

     (g) Intermittent urinary catheter - One hundred twenty per month. The ((department)) agency does not pay for these when billed in combination with an insertion tray with or without drainage bag and catheter; or other individual intermittent urinary catheters.

     (h) Irrigation syringe (bulb or piston). The ((department)) agency does not pay for these when billed in combination with irrigation tray or tubing.

     (i) Irrigation tray with syringe (bulb or piston) - Thirty per month. The ((department)) agency does not pay for these when billed in combination with irrigation syringe (bulb or piston), or irrigation tubing set.

     (j) Irrigation tubing set - Thirty per month. The ((department)) agency does not pay for these when billed in combination with an irrigation tray or irrigation syringe (bulb or piston).

     (k) Leg straps (latex foam and fabric), replacement only.

     (l) Male external catheter, specialty type, or with adhesive coating or adhesive strip - Sixty per month.

     (m) Urinary suspensory with leg bag, with or without tube - Two per month. The ((department)) agency does not pay for these when billed in combination with a latex urinary leg bag, urinary suspensory without leg bag, extension drainage tubing, or a leg strap.

     (n) Urinary suspensory without leg bag, with or without tube - Two per month.

     (o) Urinary leg bag, vinyl, with or without tube - Two per month. The ((department)) agency does not pay for these when billed in combination with drainage bag and without catheter.

     (p) Urinary leg bag, latex - One per month. The ((department)) agency does not pay for these when billed in combination with or without catheter.

     (11) Miscellaneous supplies:

     (a) Bilirubin light therapy supplies when provided with a bilirubin light which the ((department)) agency prior authorized - Five days supply.

     (b) Continuous passive motion (CPM) softgoods kit - One, with rental of CPM machine.

     (c) Eye patch with elastic, tied band, or adhesive, to be attached to an eyeglass lens - One box of twenty.

     (d) Eye patch (adhesive wound cover) - One box of twenty.

     (e) Nontoxic gel (e.g., LiceOff TM) for use with lice combs - One bottle per twelve-month period.

     (f) Nonsterile gloves - Two hundred, per client, per month.

     (i) For clients residing in an assisted living facility, the ((department)) agency pays, with prior authorization, for additional nonsterile gloves up to the quantity necessary as directed by the client's physician, not to exceed a total of four hundred per client, per month.

     (ii) Prior authorization requests must include a completed:

     (A) General Information for Authorization form (((DSHS)) HCA 13-835). The ((department's)) agency's electronic forms are available online (see WAC ((388-543-7000)) 182-543-7000 Authorization); and

     (B) Limitation Extension Request Incontinent Supplies and Gloves form (((DSHS)) HCA 13-870).

     (g) Sterile gloves - Thirty pair, per client, per month.

     (12) Miscellaneous DME:

     (a) Bilirubin light or light pad - Five days rental per twelve-month period for at-home newborns with jaundice.

     (b) Blood glucose monitor (specialized or home) - One in a three-year period. See WAC ((388-543-5500)) 182-543-5500(4) for blood monitoring/testing supplies. The ((department)) agency does not pay for continuous glucose monitoring systems including related equipment and supplies under the durable medical equipment benefit. See WAC ((388-553-500)) 182-553-500 home infusion therapy/parenteral nutrition program.

     (c) Continuous passive motion (CPM) machine - Up to ten days rental and requires prior authorization.

     (d) Lightweight protective helmet/soft shell (including adjustable chin/mouth strap) - Two per twelve-month period.

     (e) Lightweight ventilated hard-shell helmet (including unbreakable face bar, woven chin strap with adjustable buckle and snap fastener, and one set of cushion pads for adjusting fit to head circumference) - Two per twelve-month period.

     (f) Pneumatic compressor - One in a five-year period.

     (g) Positioning car seat - One in a five-year period.

[11-14-075, recodified as § 182-543-5500, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-5500, filed 6/29/11, effective 8/1/11.]

     (a) The current medicare rate, as established by the federal centers for medicare and medicaid services (CMS), for a new purchase if a medicare rate is available;

     (b) A pricing cluster; or

     (c) On a by-report basis.

     (2) Establishing reimbursement rates for purchased other DME based on pricing clusters.

     (a) A pricing cluster is based on a specific healthcare common procedure coding system (HCPCS) code.

     (b) The ((department's)) agency's pricing cluster is made up of all the brands/models for which the ((department)) agency obtains pricing information. However, the ((department)) agency may limit the number of brands/models included in the pricing cluster. The ((department)) agency considers all of the following when establishing the pricing cluster:

     (i) A client's medical needs;

     (ii) Product quality;

     (iii) Introduction, substitution or discontinuation of certain brands/models; and/or

     (iv) Cost.

     (c) When establishing the fee for other DME items in a pricing cluster, the maximum allowable fee is the median amount of available manufacturers' list prices for all brands/models as noted in subsection (2)(b) of this section.

     (3) The ((department)) agency evaluates a by report (BR) item, procedure, or service for medical necessity, appropriateness and reimbursement value on a case-by-case basis. The ((department)) agency calculates the reimbursement rate for these items at eighty-five percent of the manufacturer's ((list)) suggested retail price (MSRP) as of July 31st of the base year or one hundred twenty-five percent of the wholesale acquisition cost from the manufacturer's invoice.

     (4) Monthly rental reimbursement rates for other DME. The ((department's)) agency's maximum allowable fee for monthly rental is established using one of the following:

     (a) For items with a monthly rental rate on the current medicare fee schedule as established by the federal centers for medicare and medicaid services (CMS), the ((department)) agency equates its maximum allowable fee for monthly rental to the current medicare monthly rental rate;

     (b) For items that have a new purchase rate but no monthly rental rate on the current medicare fee schedule as established by the federal centers for medicare and medicaid services (CMS), the ((department)) agency sets the maximum allowable fee for monthly rental at one-tenth of the new purchase price of the current medicare rate;

     (c) For items not included in the current medicare fee schedule as established by the federal centers for medicare and medicaid services (CMS), the ((department)) agency considers the maximum allowable monthly reimbursement rate as by-report. The ((department)) agency calculates the monthly reimbursement rate for these items at one-tenth of eighty-five percent of the manufacturer's list price.

     (5) Daily rental reimbursement rates for other DME. The ((department's)) agency's maximum allowable fee for daily rental is established using one of the following:

     (a) For items with a daily rental rate on the current medicare fee schedule as established by the centers for medicare and medicaid services (CMS), the ((department)) agency equates its maximum allowable fee for daily rental to the current medicare daily rental rate;

     (b) For items that have a new purchase rate but no daily rental rate on the current medicare fee schedule as established by CMS, the ((department)) agency sets the maximum allowable fee for daily rental at one-three-hundredth of the new purchase price of the current medicare rate;

     (c) For items not included in the current medicare fee schedule as established by CMS, the ((department)) agency considers the maximum allowable daily reimbursement rate as by-report. The ((department)) agency calculates the daily reimbursement rate at one-three-hundredth of eighty-five percent of the manufacturer's ((list)) suggested retail price (MSRP) as of July 31st of the base year or one hundred twenty-five percent of the wholesale acquisition cost from the manufacturer's invoice.

     (6) The ((department)) agency does not reimburse for DME and related supplies, prosthetics, orthotics, medical supplies, related services, and related repairs and labor charges under fee-for-service (FFS) when the client is any of the following:

     (a) An inpatient hospital client;

     (b) Eligible for both medicare and medicaid, and is staying in a skilled nursing facility in lieu of hospitalization;

     (c) Terminally ill and receiving hospice care; or

     (d) Enrolled in a risk-based managed care plan that includes coverage for such items and/or services.

     (7) The ((department)) agency rescinds any purchase order for a prescribed item if the equipment was not delivered to the client before the client:

     (a) Dies;

     (b) Loses medical eligibility;

     (c) Becomes covered by a hospice agency; or

     (d) Becomes covered by a managed care organization.

     (8) A provider may incur extra costs for customized equipment that may not be easily resold. In these cases, for purchase orders rescinded in subsection (7) of this section, the ((department)) agency may pay the provider an amount it considers appropriate to help defray these extra costs. The ((department)) agency requires the provider to submit justification sufficient to support such a claim.

[11-14-075, recodified as § 182-543-9100, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-9100, filed 6/29/11, effective 8/1/11.]

     (a) A client's medical needs;

     (b) Product quality;

     (c) Cost; and

     (d) Available alternatives.

     (2) The ((department)) agency sets, evaluates and updates the maximum allowable fees at least once yearly for wheelchair purchases, wheelchair rentals, and wheelchair accessories (e.g., cushions and backs) using the lesser of the following:

     (a) The current medicare fees;

     (b) The actual invoice for the specific item; or

     (c) A percentage of the manufacturer's ((list)) suggested retail price (MSRP) as of January 31st of the base year, or a percentage of the wholesale acquisition cost (AC). The ((department)) agency uses the following percentages:

     (i) For basic standard wheelchairs, sixty-five percent of MSRP or one hundred forty percent of AC;

     (ii) For add-on accessories and parts, eighty-four percent of MSRP or one hundred forty percent of AC;

     (iii) For up-charge modifications and cushions, eighty percent of MSRP or one hundred forty percent of AC;

     (iv) For all other manual wheelchairs, eighty percent of MSRP or one hundred forty percent of AC; and

     (v) For all other power-drive wheelchairs, eighty-five percent of MSRP or one hundred forty percent of AC.

[11-14-075, recodified as § 182-543-9200, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-9200, filed 6/29/11, effective 8/1/11.]

     (a) For items with a rate on the current medicare fee schedule, as established by the federal centers for medicare and medicaid services (CMS), the ((department)) agency equates its maximum allowable fee to the current medicare rate; and

     (b) For those items not included in the medicare fee schedule, as established by CMS, the rate is considered by-report. The ((department)) agency evaluates a by-report item, procedure, or service based upon medical necessity criteria, appropriateness, and reimbursement value on a case-by-case basis. The ((department)) agency calculates the reimbursement for these items at eighty-five percent of the manufacturer's ((list)) suggested retail price as of July 31st of the base year or one hundred twenty-five percent of the wholesale acquisition cost from the manufacturer's invoice.

     (2) The ((department)) agency follows healthcare common procedure coding system (HCPCS) guidelines for product classification and code assignation.

     (3) The ((department's)) agency's reimbursement for a prosthetic or orthotic includes the cost of any necessary molds, fitting, shipping, handling or any other administrative expenses related to provision of the prosthetic or orthotic to the client.

     (4) The ((department's)) agency's hospital reimbursement rate includes any prosthetics and/or orthotics required for surgery and/or placed during the hospital stay.

[11-14-075, recodified as § 182-543-9300, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-9300, filed 6/29/11, effective 8/1/11.]

     (a) The current medicare rate, as established by the federal centers for medicare and medicaid services (CMS), if a medicare rate is available;

     (b) A pricing cluster;

     (c) Based on input from stakeholders or other relevant sources that the ((department)) agency determines to be reliable and appropriate; or

     (d) On a by-report basis.

     (2) Establishing reimbursement rates for medical supplies and non-DME items based on pricing clusters.

     (a) A pricing cluster is based on a specific healthcare common procedure coding system (HCPCS) code.

     (b) The ((department's)) agency's pricing cluster is made up of all the brands for which the ((department)) agency obtains pricing information. However, the ((department)) agency may limit the number of brands included in the pricing cluster if doing so is in the best interests of its clients as determined by the ((department)) agency. The ((department)) agency considers all of the following when establishing the pricing cluster:

     (i) A client's medical needs;

     (ii) Product quality;

     (iii) Cost; and

     (iv) Available alternatives.

     (c) When establishing the fee for medical supplies or other nonDME items in a pricing cluster, the maximum allowable fee is the median amount of available manufacturers' list prices.

     (3) The ((department)) agency evaluates a by-report (BR) item, procedure, or service for its medical necessity, appropriateness and reimbursement value on a case-by-case basis. The ((department)) agency calculates the reimbursement rate at eighty-five percent of the manufacturer's ((list)) suggested retail price as of July 31st of the base year or one hundred twenty-five percent of the wholesale acquisition cost from the manufacturer's invoice.

     (4) For clients residing in skilled nursing facilities, see WAC ((388-543-5700)) 182-543-5700.

[11-14-075, recodified as § 182-543-9400, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-9400, filed 6/29/11, effective 8/1/11.]

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