WSR 02-17-022



(Medical Assistance Administration)

[ Filed August 9, 2002, 4:01 p.m. , effective August 10, 2002 ]

Date of Adoption: August 5, 2002.

Purpose: Medical Assistance Administration (MAA) is filing a second emergency CR-103 to continue the emergency rule that was adopted under WSR 02-09-053 on April 12, 2002, and expires on August 10, 2002. Under WSR 02-03-092, MAA is actively undertaking the appropriate procedures to adopt the rule as a permanent rule. MAA is discontinuing enhanced payments to hospitals and trauma services centers for trauma care patients covered under the medically indigent or general assistance-unemployable programs. State funds appropriated by the legislature for the emergency medical services and trauma care systems trust account for the 2001-2003 biennium period have been exhausted.

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

Statutory Authority for Adoption: RCW 43.88.290, 74.08.090, 74.09.035(1), and 74.09.700.

Other Authority: Washington State Omnibus Operating Budget 2001-2003.

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; and that state or federal law or federal rule or a federal deadline for state receipt of federal funds requires immediate adoption of a rule.

Reasons for this Finding: The legislature's 2001-03 supplemental operating budget (chapter 371, Laws of 2002) transferred about $6.1 million from the trauma care fund reserve to the state general fund to be used for other purposes. In addition, there was a substantial and unanticipated increase in past biennia catch up payments during the early months of this biennium. It is necessary to suspend the enhanced payments to providers of trauma care to stay within the appropriation for the biennium. State law prohibits officers or employees of the state from intentionally overexpending any appropriation made by law.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 1, Repealed 0.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 0, 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.
Effective Date of Rule: August 10, 2002.

August 5, 2002

Brian H. Lindgren, Manager

Rules and Policies Assistance Unit

AMENDATORY SECTION(Amending WSR 01-16-142, filed 7/31/01, effective 8/31/01)

WAC 388-550-4800   Hospital payment method--State-only programs.   (1) The medical assistance administration (MAA):

(a) Calculates payments to hospitals for covered services provided to eligible clients under the state-only MI and medical care services programs using one of the following payment methods:

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

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

(b) Calculates the respective state-only program RCC rate and cost based conversion factor (CBCF) by reducing:

(i) The hospital's Title XIX inpatient RCC rate by the hospital's ratable; and

(ii) The hospital's Title XIX DRG CBCF.

(2) To calculate ratables, MAA:

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

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

(c) Divides the amount derived in step (2)(a) 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) from 1.000 to obtain the hospital's ratable. The hospital's Title XIX CBCF is multiplied by (1 minus the ratable), and that result is multiplied by the equivalency factor (EF) to calculate the state-only CBCF. The hospital's Title XIX RCC rate is multiplied by (1 minus the ratable) to calculate the state-only program RCC.

(e) The payments for services under the state-only MI and medical care services programs are mathematically represented as follows:

State-only program RCC = Title XIX RCC x (1 minus the ratable) x EF

State-only program CBCF = Title XIX Conversion Factor x (1 minus the ratable) x EF

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

(4) MAA:

(a) Uses the EF to hold the DRG reimbursement rates for the state-only programs at their current level prior to any rebasing. MAA applies the EF only to the Title XIX DRG CBCFs, not to the Title XIX RCCS. The EF does not apply when the DRG rate change is due to the application of an inflation factor.

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

EF = (Current state-only program CBCF divided by (Title XIX CBCF) multiplied by (1 minus the ratable))

(5) Subject to availability of funds when a client eligible for the MI program or medical care services program has a trauma that qualifies under the trauma program, the hospital ((is reimbursed the full Medicaid reimbursement amount)) receives an enhanced payment when care has been provided in a nongovernmental hospital designated by the department of health (DOH) as a trauma services center. Subject to available funds, MAA gives an annual grant for trauma services to governmental hospitals certified by DOH.

[Statutory Authority: RCW 74.08.090. and 42 U.S.C. 1395x(v), 42 C.F.R. 447.271, .11303, and .2652. 01-16-142, 388-550-4800, filed 7/31/01, effective 8/31/01. Statutory Authority: RCW 74.09.080, 74.09.730, 42 U.S.C. 1395x(v) and 1396r-4, 42 C.F.R. 447.271 and 2652. 99-14-026, 388-550-4800, filed 6/28/99, effective 7/1/99. 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