Date of Adoption: June 30, 1999.

Purpose: To codify and update calculation and payment methodology for hospitals that receive medically indigent disproportionate share payments. Also to comply with the Governor's Executive Order 97-02.

Citation of Existing Rules Affected by this Order: Amending WAC 388-550-4900 Disproportionate share payments and 388-550-5000 Payment method--LIDSH.

Statutory Authority for Adoption: RCW 74.08.090, 74.09.730, 42 U.S.C. 1396r-4.

Adopted under notice filed as WSR 99-09-087 on April 21, 1999.

Changes Other than Editing from Proposed to Adopted Version: In WAC 388-550-4900 Disproportionate share payments, subsections (5)(b) and (c) and (8)(g) and (h) were deleted. The sections following those were renumbered.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 2, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 2, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 2, Repealed 0.

Other Findings Required by Other Provisions of Law as Precondition to Adoption or Effectiveness of Rule: Per RCW 34.05.80(3) [34.05.380(3)], the rule must become effective July 1, 1999, because SHB 5968 funds this program and mandates this effective date.Effective Date of Rule: July 1, 1999.

June 30, 1999

Marie Myerchin-Redifer, Manager

Rules and Policies Assistance Unit

(1) As required by section 1902 (a)(13)(A) of the Social Security Act, the ((department shall give)) medical assistance administration (MAA) gives consideration to hospitals which serve a disproportionate number of low-income ((patients)) clients with special needs by making a payment adjustment to eligible hospitals. ((The department shall deem)) MAA considers this adjustment a disproportionate share payment.

(2) ((The department shall deem)) MAA considers a hospital a disproportionate share hospital if both the following apply:

(a) The hospital's Medicaid inpatient utilization rate (MIPUR)((, as defined in WAC 388-550-1050,)) is at least one standard deviation above the mean Medicaid inpatient utilization rate for hospitals receiving Medicaid payments in the state, or its low-income utilization rate (LIUR)((, as defined in WAC 388-550-1050,)) exceeds twenty-five percent; and

(b) The hospital has at least two obstetricians who have staff privileges at the hospital and who have agreed to provide obstetric services to eligible individuals((, except that)), This requirement ((shall)) does not apply to a hospital:

(i) The inpatients of which are predominantly individuals under eighteen years of age; or

(ii) Which did not offer nonemergency obstetric services to the general public as of December 22, 1987, when section 1923 of the Social Security Act was enacted.

(3) For hospitals located in rural areas, "obstetrician" ((shall)) means any physician with staff privileges at the hospital to perform nonemergency obstetric procedures.

(4) ((The department)) MAA may ((define or deem)) consider a hospital a disproportionate share hospital if both of the following apply:

(a) The hospital has a ((Medicaid inpatient utilization rate ())MIPUR(())) of not less than one percent; and

(b) The hospital meets the requirement of subsection (2)(((c)))(b) of this section.

(5) ((The department shall administer the following disproportionate share programs:

(a))) MAA administers the low-income disproportionate share ((hospital;)) (LIDSH) program and may administer any of the:

(((b))) (a) Medically((-)) indigent disproportionate share ((hospital)) (MIDSH);

(((c))) (b) General assistance-unemployable disproportionate share ((hospital)) (GAUDSH);

(((d))) (c) Small rural hospital assistance program disproportionate share ((hospital)) (SRHAPDSH);

(((e))) (d) Teaching hospital assistance program disproportionate share ((hospital)) (THAPDSH);

(((f))) (e) State teaching hospital financing program disproportionate share ((hospital)) (STHFPDSH);

(((g))) (f) County teaching hospital financing program disproportionate share ((hospital)) (CTHFPDSH); and

(((h))) (g) Public hospital district disproportionate share ((hospital)) (PHDDSH).

(6) ((The department shall allow)) MAA allows a hospital to receive any one or all of the disproportionate share hospital (DSH) payment adjustments discussed in subsection (5) of this section ((if)) when the hospital:

(a) ((The hospital)) Applies to ((the department)) MAA; and

(b) Meets the eligibility requirements for the particular DSH payment program, as discussed in WAC 388-550-5000 through 388-550-5400.

(7) ((The department shall ensure)) MAA ensures each hospital's total DSH payments do not exceed the individual hospital's DSH limit, defined as:

(a) The cost to the hospital of providing services to Medicaid ((patients)) clients, including ((patients)) clients served under Medicaid managed care programs((,));

(b) Less the amount paid by the state under the non-DSH payment provision of the state plan((,));

(c) Plus the cost to the hospital of providing services to uninsured patients((,)); and

(d) Less any cash payments made by uninsured ((patients)) clients.

(8) (((a) The department's)) MAA’s total annual DSH payments ((shall)) must not exceed the state's DSH allotment for the federal fiscal year.

(((b))) If the DSH statewide allotment is exceeded, ((the department shall recoup)) MAA recoups overpayments from hospitals in the following program order:

(((i) Public hospital district disproportionate share hospital))

(a) PHDDSH;

(((ii) Teaching hospital assistance program disproportionate share hospital))

(b) THAPDSH;

(((iii) County teaching hospital financing program disproportionate share hospital))

(c) CTHFPDSH;

(((iv) State teaching hospital financing program disproportionate share hospital))

(d) STHFPDSH;

(((v) Small rural hospital assistance program disproportionate share hospital))

(e) SRHAPDSH;

(((vi) Medically-indigent disproportionate share hospital))

(f) MIDSH;

(((vii) General assistance-unemployable disproportionate share hospital; and

(viii) Low-income disproportionate share hospital .

(9) The department shall make periodic DSH payments to eligible hospitals.  The department shall have sole discretion regarding the timing of DSH payments))

(g) GAUDSH; and

(h) LIDSH.

[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, § 388-550-4900, filed 12/18/97, effective 1/18/98.]

(1) ((The department shall deem)) A hospital serving the department's clients is eligible for a low-income disproportionate share hospital (LIDSH) payment adjustment if the hospital meets the requirements of WAC 388-550-4900(2).

(2) ((The department shall pay)) MAA pays hospitals ((deemed)) considered eligible under the criteria in subsection (1) of this section ((DSH payment amounts which in)). The total LIDSH payment amounts equal the funding set by the state's appropriations act for LIDSH.  The amount ((appropriated)) that the state appropriates for LIDSH may vary from year to year.

(3) ((The department shall apportion)) MAA distributes LIDSH payments to individual hospitals as follows by:

(a) For each LIDSH-eligible hospital, ((the department shall determine)) determining the standardized Medicaid inpatient utilization rate (MIPUR).  The MIPUR is standardized by dividing the hospital's MIPUR by the average MIPUR of all LIDSH-eligible hospitals((.)); then

(b) Multiples the hospital's standardized MIPUR ((is multiplied)) by the hospital's most recent ((fiscal year)) case mix index, and then by the hospital's most recent fiscal year Title XIX admissions, and lastly by the hospital’s profitability factor.  MAA then multiplies the product ((is then multiplied)) by an initial random base amount((.)); then

(c) Compares the sum of all annual LIDSH ((payment so calculated for individual hospitals shall be added and compared)) payments to the appropriated amount.  If the amounts differ, MAA progressively selects a new base amount ((shall be selected progressively)) by trial and error until the sum of the LIDSH payments to hospitals equals the appropriated amount.

[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, § 388-550-5000, filed 12/18/97, effective 1/18/98.]

© Washington State Code Reviser's Office