WSR 14-11-096 PROPOSED RULES HEALTH CARE AUTHORITY (Washington Apple Health) [Filed May 21, 2014, 9:41 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 14-06-075.
Title of Rule and Other Identifying Information: WAC 182-550-3850 Budget neutrality adjustment and measurement, 182-550-7000 Outpatient prospective payment system (OPPS)—General, 182-550-7200 OPPS—Billing requirements and payment method, 182-550-7300 OPPS—Payment limitations, 182-550-7400 OPPS EAPG relative weights, 182-550-7450 OPPS budget target adjustor, 182-550-7500 OPPS rate, 182-550-7550 OPPS payment enhancements, 182-550-7600 OPPS payment calculation, and 182-550-7100 OPPS—Exempt hospitals.
Hearing Location(s): Health Care Authority (HCA), Cherry Street Plaza Building, Sue Crystal Conference Room 106A, 626 8th Avenue, Olympia, WA 98504 (metered public parking is available street side around building. A map is available at http://www.hca.wa.gov/documents/directions_to_csp.pdf or directions can be obtained by calling (360) 725-1000), on June 24, 2014, at 10:00 a.m.
Date of Intended Adoption: Not sooner than June 25, 2014.
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 June 24, 2014.
Assistance for Persons with Disabilities: Contact Kelly Richters by June 19, 2014, TTY (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: HCA is rebasing the outpatient prospective payment system. HCA will move from the ambulatory patient classification to the enhanced ambulatory payment group system, and update the pricing methods and rates associated with outpatient services. HCA has also defined rules for measuring and ensuring budget neutrality after rebased payment system implementation.
Statutory Authority for Adoption: RCW 41.05.021.
Statute Being Implemented: Chapter 74.60 RCW.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: HCA, governmental.
Name of Agency Personnel Responsible for Drafting: Jason R. P. Crabbe, Olympia, Washington 98504-2716, (360) 725-1346; Implementation and Enforcement: Dylan Oxford, Olympia, Washington 98504-5500, (360) 725-2130.
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 these rules do not impose a disproportionate cost impact on 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.
May 21, 2014
Kevin M. Sullivan
Rules Coordinator
NEW SECTION
WAC 182-550-3850 Budget neutrality adjustment and measurement.
(1) The medicaid agency measures the effectiveness of budget neutral rebasing by applying a budget neutrality adjustment factor to the base payment rates for both inpatient and outpatient hospitals as needed to maintain aggregate payments under rebased payment systems.
(a) The agency performs budget-neutrality adjustments and measurement by prospectively adjusting conversion factors and rates to offset unintentional aggregate payment system decreases or increases. The agency publishes conversion factors and rates which reflect any required budget neutrality adjustment.
(b) The following rates and factors are not adjusted by the BNAF:
(i) Inpatient per diem;
(ii) Ratio of costs-to-charges (RCC);
(iii) Critical access hospital (CAH) weighted costs-to-charges (WCC);
(iv) Inpatient pain management and rehabilitation (PM&R);
(v) Per-case rates;
(vi) Administrative day rates;
(vii) Long-term acute care (LTAC);
(viii) Chemical-using pregnant women (CUP);
(ix) Outlier parameters;
(x) Outpatient services paid at the resource-based relative value scale (RBRVS) fee;
(xi) Outpatient corneal transplants; and
(xii) Diabetic education.
(2) The agency measures budget neutrality on an ongoing basis after rebased system implementation as follows:
(a) The agency gathers inpatient and outpatient claims and encounter data from the rebased system implementation date to the end of the measurement period.
(i) The first measurement period is the initial six months following rebased payment system implementation.
(ii) Additional measurement periods occur no more frequently than quarterly thereafter.
(iii) The agency performs a final measurement period for data received through June 30, 2016.
(b) The agency sums the aggregate payment amounts separately for inpatient and outpatient services. The agency will make the following adjustments to the base data:
(i) The agency removes any reductions due to third-party liability (TPL), client responsibility, and client spenddown from the payment summary;
(ii) The agency removes any increase awarded by RCW 74.09.611(2) from inpatient services;
(iii) The agency includes any outpatient service lines which are bundled under the enhanced ambulatory patient group (EAPG) system, but would be otherwise payable under the ambulatory payment classification (APC) system; and
(iv) Other adjustments as necessary.
(c) The agency processes all claims and encounters using the rates, factors, and policies which were in effect on June 30, 2014, with the following exceptions:
(i) The agency uses the RCC effective on the date of service;
(ii) The agency uses the most recent RBRVS values for any outpatient service paid using the RBRVS; and
(iii) The agency updates APC relative weights to reflect the most recent relative weights supplied by CMS;
(iv) The agency adjusts the outpatient budget target adjuster (BTA) to offset the inflation factor applied to OPPS in the CMS OPPS final rule; and
(v) The agency may include other adjustments as necessary to ensure accurate payment determination.
(d) The agency aggregates payment amounts calculated under (c) of this subsection separately for inpatient and outpatient services.
(3) The agency will modify the conversion factors and rates to reflect aggregate changes in the overall payment system as follows:
(a) If the amount calculated in subsection (2)(b) of this section is between ninety-nine percent and one hundred one percent of the amount calculated in subsection (2)(d) of this section, no adjustment will be made to the conversion factors and rates currently in effect;
(b) If the amount calculated in subsection (2)(b) of this section is greater than one hundred one percent of the amount calculated in subsection (2)(d) of this section, the conversion factors and rates will be adjusted to reach a target expenditure of one hundred one percent from the rebased payment system implementation date to the end of the subsequent six-month period;
(c) If the amount calculated in subsection (2)(b) of this section is less than ninety-nine percent of the amount calculated in subsection (2)(d) of this section, the conversion factors and rates will be adjusted to reach a target expenditure decrease of ninety-nine percent from the rebased payment system implementation date to the end of the subsequent six-month period.
(4) The agency applies adjustments to the BNAF to rates prospectively at the beginning of the calendar quarter following the measurement.
AMENDATORY SECTION (Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)
WAC 182-550-7000 Outpatient prospective payment system (OPPS)—General.
(1) The ((department's)) medicaid agency pays for outpatient services using an outpatient prospective payment system (OPPS) ((uses an ambulatory payment classification (APC) based reimbursement methodology as its primary reimbursement method. The department is basing its OPPS on the centers for medicare and medicaid services (CMS) prospective payment system for hospital outpatient department services.
(2) For a complete description of the CMS outpatient hospital prospective payment system, including the assignment of status indicators (SIs), see 42 C.F.R., Chapter IV, Part 419. The Code of Federal Regulations (C.F.R.) is available from the C.F.R. web site and the Government Printing Office, Seattle office. The document is also available for public inspection at the Washington state library (a copy of the document may be obtained upon request, subject to any pertinent charge))) for all hospitals that do not qualify as in-state critical access hospitals per WAC 182-550-2598.
(2) The agency uses the enhanced ambulatory payment group (EAPG) software provided by 3MTM Health Information Systems to group OPPS claims based on services performed and resource intensity.
(3) The agency uses the group established in subsection (2) of this section to determine payment for OPPS claims.
AMENDATORY SECTION (Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)
WAC 182-550-7200 OPPS—Billing requirements and payment method.
(((1))) This section describes hospital provider billing requirements and the payment methods the ((department)) medicaid agency uses to pay for covered outpatient hospital services provided by hospitals ((not exempted from)) included in the outpatient prospective payment system (OPPS).
(((2))) (1) Providers must bill according to national correct coding initiative (NCCI) standards((. NCCI standards are based on:
(a) Coding conventions defined in the American Medical Association's Current Procedural Terminology (CPT®) manual;
(b) Current standards of medical and surgical coding practice;
(c) Input from specialty societies; and
(d) Analysis of current coding practices.
The centers for medicare and medicaid services (CMS) maintains NCCI policy.)) maintained by the Centers for Medicare and Medicaid Services (CMS).
ENHANCED AMBULATORY ((PAYMENT CLASSIFICATION (APC))) PATIENT GROUP (EAPG) METHOD
(((3))) (2) The ((department)) agency uses the ((APC)) enhanced ambulatory patient group (EAPG) method ((when (CMS) has established a national payment rate to pay for covered services. The APC method is)) as the primary payment ((methodology)) method for OPPS. Examples of services paid by the ((APC methodology)) EAPG method include((, but are not limited to)):
(a) ((Ancillary services;)) Surgeries;
(b) ((Medical visits;)) Significant procedures;
(c) ((Nonpass-through drugs or devices;
(d))) Observation services;
(((e) Packaged services subject to separate payment when criteria are met;
(f) Pass-through drugs;
(g) Significant procedures that are not subject to multiple procedure discounting (except for dental-related services);
(h) Significant procedures that are subject to multiple procedure discounting)) (d) Medical visits;
(e) Dental procedures; and
(((i) Other services as identified by the department.)) (f) Ancillary services.
OPPS MAXIMUM ALLOWABLE FEE SCHEDULE
(((4))) (3) The ((department uses)) agency pays using the outpatient fee schedule ((published in the department's billing instructions to pay for covered)) for:
(a) Covered services ((that are)) exempted from the ((APC)) EAPG payment ((methodology or services for which there are no established weight(s))) method due to agency policy;
(b) ((Procedures that are on the CMS inpatient only list;)) Covered services for which there are no established relative weights, such as:
(i) Durable medical equipment procedures grouped to EAPG type 7; and
(ii) Physical therapy procedures grouped to EAPG type 21;
(c) ((Items, codes, and services that are not covered by medicare;
(d))) Corneal tissue acquisition((;
(e) Devices that are pass-throughs (see WAC 388-550-7050 for definition of pass-throughs); and
(f) Dental clinic services.)); and
(d) Other services as identified by the agency and posted on the agency's web site.
HOSPITAL OUTPATIENT ((RATE)) RATIO OF COSTS-TO-CHARGES (RCC)
(((5))) (4) The ((department)) agency uses the hospital outpatient ((rate described)) ratio of costs-to-charges (RCC) in WAC ((388-550-3900 and 388-550-4500)) 182-550-3900 and 182-550-4500 to pay for the services listed in subsection (((4))) (3) of this section for which the ((department)) agency has not established a maximum allowable fee.
AMENDATORY SECTION (Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)
WAC 182-550-7300 OPPS—Payment limitations.
(1) The ((department)) medicaid agency limits payment for covered outpatient hospital services to the current published maximum allowable units of services listed in the outpatient fee schedule ((and)) published ((in)) on the ((department's hospital billing instructions)) agency's web site, subject to the following limitations:
(a) To receive payment for services, providers must bill claims according to national correct coding initiative (NCCI) standards. ((See WAC 388-550-7200(2) for more information on NCCI standards.)) When a unit limit for services is not stated in the outpatient fee schedule, ((department)) the agency pays for services according to the program's unit limits stated in applicable WAC and published ((issuances)) provider guides.
(b) ((Because multiple units for services may be factored into the ambulatory payment classification (APC) weight, department pays for services according to the unit limit stated in the outpatient fee schedule when the limit is not the same as the program's unit limit stated in applicable WAC and published issuances.
(2) The department does not pay separately for covered services that are packaged into the APC rates. These services are paid through the APC rates.
(3) The department :
(a) Limits surgical dental services payment to the ambulatory surgical services fee schedule and pays:
(i) The first surgical procedure at the applicable ambulatory surgery center group rate; and
(ii) The second surgical procedure at fifty percent of the ambulatory surgery center group rate.
(b) Considers all surgical procedures not identified in subsection (a) to be bundled.)) The average resource, including units of service, are factored into the enhanced ambulatory patient group (EAPG) weight determination, and the allowable units of service for EAPGs is equal to one.
(2) The following service categories are included in the EAPG payment for significant procedure(s) on the claim and do not receive separate payments under EAPG:
(a) Services classified as the same or clinically related to the main significant procedure;
(b) Routine ancillary services;
(c) Chemotherapy services grouped as class I, class II, or minor; and
(d) Pharmacotherapy services grouped as class I, class II, or minor.
(3) The agency reduces the EAPG payment by fifty percent based on the default EAPG grouper settings for services subject to one or more of the following discounts:
(a) Multiple procedures;
(b) Repeat ancillary services; or
(c) A terminated procedure.
(4) The ((department)) agency limits outpatient services billing to one claim per episode of care. If ((there are late charges, or if)) any line of the claim is denied, or a service that was provided was not stated on the initial submitted claim, the ((department)) agency requires the entire claim to be adjusted.
(5) The agency limits payments to the total billed charges.
AMENDATORY SECTION (Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)
WAC 182-550-7400 OPPS ((APC)) EAPG relative weights.
(1) The ((department)) medicaid agency uses ((the ambulatory payment classification (APC))) national relative weights established by ((the centers for medicare and medicaid services (CMS) at the time the budget target adjustor is established. See WAC 388-550-7050 for the definition of budget target adjustor)) 3MTM as part of its enhanced ambulatory patient group (EAPG) payment system.
(2) The agency may update the relative weights used for calculating OPPS payments on July 1st of each year, beginning on July 1, 2015.
(3) The agency may update relative weights more frequently for newly added EAPGs in order to maintain current EAPG grouper system functionality.
(4) The agency will post all relative weights used on the agency's web site.
AMENDATORY SECTION (Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)
WAC 182-550-7450 OPPS budget target adjustor.
(((1) The outpatient prospective payment system (OPPS) budget target adjustor is a component of the ambulatory payment classification (APC) payment calculation. The budget target adjustor allows the department to reach but not exceed the established budget target. The same OPPS budget target adjustor value is applied to payments for all hospitals.
(2) The department calculates the OPPS budget target adjustor using:
(a) A payment system model developed by the department;
(b) The department's budget target;
(c) The department's outpatient fee schedule;
(d) Addendum B to 42 C.F.R. Part 410 (medicare's hospital outpatient regulations and notices); and
(e) The wage index established and published by the centers for medicare and medicaid services (CMS) at the time the OPPS budget target adjustor is set for the upcoming year.
(3) In response to direction from the legislature, the department may change the method for calculating the OPPS)) The medicaid agency may apply an outpatient prospective payment system (OPPS) budget target adjustor to ((achieve the legislature's targeted expenditure levels for outpatient hospital services.)) the enhanced ambulatory patient group (EAPG) payment. The agency calculates the OPPS budget target adjustor based on legislative direction to achieve the legislature's targeted expenditure levels for outpatient hospital services. The legislative direction may take the form of express language in the Biennial Appropriations Act or may be reflected in the level of funding appropriated to the ((department)) agency in the Biennial Appropriations Act.
AMENDATORY SECTION (Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)
WAC 182-550-7500 OPPS rate.
(1) The ((department)) medicaid agency calculates hospital-specific outpatient prospective payment system (OPPS) rates using:
(a) A ((payment method model)) base conversion factor established by the ((department)) agency; ((and))
(b) The latest wage index information established and published by the centers for medicare and medicaid services (CMS) at the time the OPPS rates are set for the upcoming year. Wage index information reflects labor costs in the cost-based statistical area (CBSA) where a hospital is located; and
(c) An adjustment for graduate medical education (GME).
(2) ((The department may adjust OPPS rates to pay for graduate medical education (GME) costs.)) Base conversion factors. The agency calculates the average, or base, enhanced ambulatory patient group (EAPG) conversion factor during a hospital payment system rebasing. The base is calculated as the maximum amount that can be used, along with all other payment factors and adjustments described in this chapter, to maintain aggregate payments across the system. The agency will publish base conversion factors on its web site.
(3) Wage index adjustments reflect labor costs in the CBSA where a hospital is located.
(a) The agency determines the labor portion by multiplying the base factor or rate by the labor factor established by medicare; then
(b) The amount in (a) of this subsection is multiplied by the most recent wage index information published by CMS at the time the rates are set; then
(c) The agency adds the nonlabor portion of the base rate to the amount in (b) of this subsection to produce a hospital-specific wage adjusted factor.
(4) GME. The ((department)) agency obtains the GME information from ((a)) the hospital's (("as filed" annual)) most recently filed medicare cost report (((Form 2552-96) and applicable patient revenue reconciliation data provided by the hospital)) as available in the CMS HCRIS dataset.
(a) The hospital's (("as filed")) medicare cost report must cover a period of twelve consecutive months in its medicare cost report year.
(b) If a hospital's medicare cost report is not available on HCRIS, the agency may use the CMS form 2552-10 to calculate GME.
(c) In the case where a ((delay in submission of the)) hospital has not submitted a CMS medicare cost report ((to the medicare fiscal intermediary is granted by medicare)) in greater than eighteen months from the end of the hospital's cost reporting period, the ((department)) agency may ((adjust the hospital's OPPS rate.
(b) The department may not pay GME expenses for hospitals in specified categories, and hospitals that meet, or fail to meet, conditions specified in statute or WAC.
(3) In response to direction from the legislature, the department may change the method for calculating OPPS rates to achieve the legislature's targeted expenditure levels for outpatient hospital services. The legislative direction may take the form of express language in the Biennial Appropriations Act or may be reflected in the level of funding appropriated to the department in the Biennial Appropriations Act.)) remove the hospital's GME adjustment.
(d) The agency calculates the hospital-specific GME by dividing the durable medical equipment cost reported on worksheet B, part 1 of the CMS cost report by the adjusted total costs from the CMS cost report.
(5) The formula for calculating the hospital's final specific conversion factor is:
EAPG base rate x (.6(wage index) + .4)/(1-GME)
NEW SECTION
WAC 182-550-7550 OPPS payment enhancements.
(1) Pediatric adjustment.
(a) The medicaid agency establishes a policy adjustor to be applied to all enhanced ambulatory patient group (EAPG) services for clients under age eighteen years.
(b) Effective July 1, 2014, this adjustor equals one point thirty-five (1.35).
(2) Chemotherapy and combined chemotherapy/pharmacotherapy adjustment.
(a) The agency establishes a policy adjustor to be applied to services grouped as chemotherapy drugs or combined chemotherapy and pharmacotherapy drugs.
(b) Effective July 1, 2014, this adjustor equals one point one (1.1).
(3) Sole community hospitals (SCH).
(a) To qualify as an SCH, a hospital must meet all of the following criteria. The hospital must:
(i) Be certified as an SCH by the Centers for Medicare and Medicaid Services (CMS) as of January 1, 2013;
(ii) Have a level III adult trauma service designation by the department of health as of January 1, 2014;
(iii) Have less than one hundred fifty acute-care-licensed beds in state fiscal year 2011; and
(iv) Be owned and operated by the state or one of its political subdivisions.
(b) Effective January 1, 2015, the agency will apply an adjustor of one point twenty-five (1.25) to the EAPG conversion factor for any hospital that meets the conditions in (a) of this subsection.
AMENDATORY SECTION (Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)
WAC 182-550-7600 OPPS payment calculation.
(1) The ((department follows the discounting and modifier policies of the centers for medicare and medicaid services (CMS). The department calculates the ambulatory payment classification (APC) payment as follows:
medicaid agency calculates the enhanced ambulatory patient group (EAPG) payment as follows:
EAPG payment =
EAPG relative weight x
Hospital-specific conversion factor x
Discount factor (if applicable) x
Policy adjustor (if applicable)
(2) The total OPPS claim payment is the sum of the ((APC)) EAPG payments plus the sum of the ((lesser of the billed charge or)) allowed ((charge)) amounts for each non-((APC)) EAPG service.
(3) ((The department pays hospitals for claims that involve clients who have third-party liability (TPL) insurance, the lesser of either the:
(a) Billed amount minus the third-party payment amount; or
(b) Allowed amount minus the third-party payment amount.
(4) In response to direction from the legislature, the department may change the method for calculating OPPS payments to achieve the legislature's targeted expenditure levels for outpatient hospital services. The legislative direction may take the form of express language in the Biennial Appropriations Act or may be reflected in the level of funding appropriated to the department in the Biennial Appropriations Act.)) If a client's third-party liability insurance has made a payment on a service, the agency subtracts any such payments made from the medicaid allowed amount.
REPEALER
The following section of the Washington Administrative Code is repealed:
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