Date of Adoption: June 28, 1999.

Purpose: To update rule to reflect current department policy. To comply with the Governor's Executive Order 97-02.

Citation of Existing Rules Affected by this Order: Amending WAC 388-550-4800 Hospital payment method--State only programs.

Statutory Authority for Adoption: RCW 74.09.080, 74.09.730, 42 U.S.C. 1395x(v) and 1396r-4, 42 C.F.R. 447.271, 2652.

Adopted under notice filed as WSR 99-09-090 on April 21, 1999.

Changes Other than Editing from Proposed to Adopted Version: WAC 388-550-4800(3) changed from "MAA may adjust all cost-based conversion factors (CBCF) by an inflation factor determined by the legislature" to "MAA updates each hospital's ratable annually on August 1."

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.

Other Findings Required by Other Provisions of Law as Precondition to Adoption or Effectiveness of Rule: Per RCW 34.05.380(3), the rule must become effective July 1, 1999, because the senate budget bill (ESSB 5180) and the budget notes defining the budget bill mandate this effective date.Effective Date of Rule: July 1, 1999.

June 28, 1999

Marie Myerchin-Redifer, Manager

Rules and Policies Assistance Unit

(1) The medical assistance administration (MAA):

(a) ((MAA)) Calculates payments to hospitals for state-only MI/medical care services to clients according to the:

(i) Diagnosis-related group (DRG); or

(ii) Ratio of costs-to-charges (RCC) methodologies; and

(b) ((MAA)) Reduces hospitals' Title XIX rates by their ratable and/or equivalency (((EQ))) factors (EQ), as applicable.

(2) MAA calculates ratables ((as follows)) by:

(a) Adding together a hospital's Medicare and Medicaid revenues ((are added together)), along with the value of the hospital's charity care and bad debts.  MAA deducts the hospital's low-income disproportionate share (LIDSH) revenue ((is deducted)) from this total to arrive at the hospital's community care dollars((.)); then

(b) Subtracting revenue generated by hospital-based physicians((, as reported in the hospital's HCFA 2552 report, is subtracted)) from total hospital revenue((, also)). Both revenues are as reported in the hospital's HCFA 2552 cost report((.)); then

(c) Divides the amount derived in step (2)(a) ((is divided)) by the amount derived in step (2)(b) to obtain the ratio of community care dollars to total revenue((.)); then

(d) Subtracts the result of step (2)(c) ((is subtracted)) from 1.000 to ((derive)) obtain the hospital's ratable.  The hospital's Title XIX cost-based conversion factor (CBCF) or RCC rate is multiplied by (1-ratable) for ((an)) a MI or medical care services client.

(e) The ((reimbursements)) payments for MI/medical care services clients are mathematically represented as follows:

MI/medical care services RCC = Title XIX RCC x (1-Ratable)

MI/medical care services CBCF = Title XIX Conversion Factor x (1-Ratable) x EQ

(3) MAA updates each hospital's ratable annually on August 1.

(4) MAA:

(a) ((MAA)) Uses the ((equivalency factor ())EQ(())) to hold the DRG reimbursement rates for the MI/medical care services programs at their current level prior to any rebasing.  MAA applies the EQ only to the Title XIX DRG CBCFs.   MAA does not apply the EQ when the DRG rate change is due to the application of ((the annual)) an inflation factor ((from the PPS-type hospital market-basket index from the most recent McGraw-Hill Data Resources, Inc., (DRI) forecast)).

(b) ((MAA)) Calculates a hospital's equivalency factor as follows:

EQ = (Current MI/medical care services conversion factor)/(Title XIX DRG rate x (1-ratable))

(5) Effective for hospital admissions on or after December 1, 1991, MAA reduces its payment for MI (but not medical care services) clients further by multiplying ((it)) the payment by ninety-seven percent.  MAA applies this payment reduction adjustment to the MIDSH methodology in accordance with section 3(b) of the "Medicaid Voluntary Contributions and Provider-Specific Tax Amendment of 1991."

(6) When the MI/medical care services client has a trauma that qualifies under the trauma program, MAA pays the full Medicaid Title XIX amount when care has been provided in a nongovernmental hospital designated by the department of health (DOH) as a trauma services center.  MAA ((applies the reduction in MI cases which do not qualify under the trauma program.  MAA)) gives an annual grant for trauma services to governmental hospitals certified by DOH.

[Statutory Authority: RCW 74.08.090, 42 USC 1395 x(v), 42 CFR 447.271, 447.11303, and 447.2652.  99-06-046, § 388-550-4800, 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, § 388-550-4800, filed 12/18/97, effective 1/18/98.]

© Washington State Code Reviser's Office