EMERGENCY RULES
SOCIAL AND HEALTH SERVICES
(Health and Recovery Services Administration)
Purpose: The purpose of this amendment is to reflect the changes governing the allocation of funds to regional support networks for community mental health services based on funding directives from the Center for Medicare and Medicaid Services and the 2006-2007 biennial budget passed by the Washington state legislature and signed by the governor on May 17, 2005.
Citation of Existing Rules Affected by this Order: Amending WAC 388-865-0201.
Statutory Authority for Adoption: RCW 71.05.560, 71.24.035, 71.34.380.
Other Authority: 1915(b) Freedom of Choice Waiver (42 U.S.C. 1396n); 42 C.F.R. 438; section 204, chapter 518, Laws of 2005, DSHS MHD Program Budget.
Under RCW 34.05.350 the agency for good cause finds 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: These rules are necessary to implement the mandates required by the Center for Medicare and Medicaid Services (CMS) 1915(b) Freedom of Choice Waiver. These are regulations implementing section 1903 (m)(2)(A)(iii) of the Social Security Act requiring payments in risk contracts to be made on an actuarially sound basis. Section 204 (1)(b), chapter 518, Laws of 2005, directs new methodology for distributing non-Medicaid ("state only") funds to RSNs. This continues the emergency rule that is currently in effect filed as WSR 05-14-081. The department has filed a preproposal statement of inquiry as WSR 05-14-072 and anticipates filing a proposed rule-making notice (CR-102) in December of 2005.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 1, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.
Date Adopted: October 18, 2005.
Andy Fernando, Manager
Rules and Policies Assistance Unit
3571.2(1) Funding allocations are projected at the beginning of each fiscal year, using forecasted Medicaid enrollees for that fiscal year.
(2) Payments are made on the number of actual Medicaid enrollees disabled and nondisabled adults and disabled and nondisabled children each month, which may result in actual payments being higher or lower than projected payments, depending on whether actual Medicaid enrollees are more or less than forecasted enrollees.
(3) The mental health division (MHD) ((uses two different
methodologies to allocate funds:)) allocates funds according
to a formula.
(a) ((Historical method;
(b) Eligibles method.
(4) For the period July 1, 2001 to June 30, 2005, the
funds will be allocated using the methodologies as follows:
(a) For July, 1, 2001 to June 30, 2002, seventy-five
percent of funds of will be allocated using the historical
method and twenty-five percent of funds will be allocated
using the prevalence method;
(b) For June 1, 2002 to June 30, 2003, fifty percent of
funds will be allocated using the historical method and fifty
percent of funds will be allocated using the prevalence
method;
(c) For June 1, 2003 to June 30, 2004, twenty-five
percent of funds will be allocated using the historical method
and seventy-five percent of funds will be allocated using the
prevalence method;
(d) For June 1, 2004 forward, one hundred percent of
funds will be allocated using the prevalence method. These
percentages will remain in effect unless the department is
directed otherwise by the state Legislature.
(5)(a) Historical method means that federal Medicaid
funds projected to be paid to the RSN/PHPs are calculated
using actuarially determined per member per month (PMPM) rates
specific to each regional support network multiplied by the
number of persons enrolled in the Medicaid program in each
regional support network for each month during the fiscal
year.
(b) The actuarially determined rates were determined at
the beginning of the managed care program (1992 for outpatient
services and 1997 for inpatient services) and have been
increased periodically by the Legislature.)) Medicaid funds
are allocated based on the product of rates and enrollees by
category disabled and nondisabled adults and disabled and
nondisabled children.
(i) ((Rates differ by RSN and by category of enrollee
(disabled and nondisabled adults and disabled and nondisabled
children))) Rate ranges for each category of Medicaid enrollee
disabled and nondisabled adults and disabled and nondisabled
children are set by an independent actuary. Actual rates paid
are set by the MHD within these rate ranges to ensure both the
rates are actuarially sound and within the budget authority.
The rate study is conducted every five years or as directed by
the Centers for Medicare and Medicaid Services (CMS).
(ii) ((These)) Rates are tracked by MHD.
(iii) The number of Medicaid enrollees is tracked by the medical assistance administration.
(((c) The product of rates and enrollees is the projected
amount of Medicaid funding each RSN/PHP will receive during
the year.
(i) This amount is divided into two portions - federal
funds and state match funds.
(ii) The two portions of Medicaid funds are determined by
a percentage known as the Federal Medicaid Assistance
Percentage (FMAP). This percentage is set by the federal
Health Care Financing Authority and changes each year.
(d) In the inpatient program, each RSN/PHP is allocated
the amount of federal and state funds projected in the
calculations explained above.
(e) State funds in the outpatient program (also called
"consolidated") to be paid to the RSN/PHPs are set by the
Legislature. These funds are allocated to the RSN/PHPs
according to the RSN/PHP's calculated percentage of the total
funds. The RSN/PHP's percentage is based primarily on
historical fee-for-service data.
(i) The RSN/PHP percentages are tracked by MHD and are
carried forward each year.
(ii) The percentage of consolidated funds paid to each
RSN/PHP is adjusted each year by the Legislature through
budget proviso direction, generally requiring that new funds
in the program be allocated according to Medicaid enrollees in
each RSN. Therefore, the amount of consolidated funds in the
outpatient program at the beginning of the fiscal year (also
called "base funds") are allocated according to the percentage
tracked by MHD (put in place by the Legislature in the
previous year).
(iii) New consolidated funds are allocated as directed by
the Legislature, generally according to the number of Medicaid
enrollees residing in each RSN.
(f) The base allocation and new consolidated allocations
are combined into one percentage that serves as the RSN/PHP's
percentage allocation for the next year's base funds.
(g) The sum of federal Medicaid funds, state match funds
in the inpatient program, and consolidated funds equals the
amount of funding provided to each RSN/PHP.
(6) Eligibles method.
(a) Medicaid and non-Medicaid funds are allocated based
on a formula that reflects prevalence of mental disorders in
each county. The formula takes into consideration each RSN's:
(i) Concentrations of priority populations;
(ii) Commitments to state hospitals under chapters 71.05
and 71.34 RCW;
(iii) Population concentrations in urban areas;
(iv) Population concentrations at border crossings at
state boundaries; and
(v) Other demographic and workload factors such as number
of MI/GA-U clients, commitments to community hospitals under
chapters 71.05 and 71.34 RCW, and number of homeless persons.
(b) The RSN/PHP historical method rates for 2001 have
been used to calculate a weighted average statewide rate
(WASR) for each category of Medicaid eligible (disabled and
nondisabled adults and disabled and nondisabled children).
(c) The WASR for each category is determined by:
(i) Adding the RSN/PHP's inpatient and outpatient rates
to create one combined rate;
(ii) Multiplying each RSN/PHP's rate by the number of
Medicaid enrollees residing in that RSN/PHP;
(iii) Adding the results; and
(iv) Dividing the sum by the statewide number of Medicaid
eligibles.
(d) WASR rates are tracked by MHD.
(e) The number of Medicaid enrollees is tracked by the
medical assistance administration.
(f))) (b) To project the amount of Medicaid funding each
RSN/PIHP will receive during the year, MHD multiplies the
RSN/PIHP's ((WASR)) rates for each category by the projected
number of Medicaid enrollees in each category.
(i) ((This amount is divided into two portions - federal
funds and state match funds.
(ii))) Each RSN/PIHP's projected allocation includes both
portions of Medicaid funding (federal and state match funds).
(((iii))) (ii) Payments to the RSN/PIHP are made based on
the actual number of Medicaid enrollees.
(((g))) (4) The level of non-Medicaid funds appropriated
to the community mental health services program is determined
by the state Legislature.
(((i) Eighty percent of the non-Medicaid funds
appropriated are allocated to the RSN/PHPs according to the
number persons enrolled in the state funded general
assistance-unemployable, medically indigent and state only "v"
programs (persons in the state only "v" program are counted at
thirteen percent of the total enrolled).
(A) The number of persons enrolled in these programs is
tracked by the medical assistance administration.
(B) The projected number of persons in these programs
residing in each RSN, divided by the total persons projected
to be in these programs, is multiplied by eighty percent of
the total funds appropriated to determine the amount of
funding provided to each RSN/PHP.
(ii) Twenty percent of the non-Medicaid funds
appropriated are allocated according to a summary z score
factor that is calculated using four subfactors:
(A) The number of urban counties in each RSN;
(B) The number of state and country border counties in
each RSN;
(C) The number of homeless persons in each RSN; and
(D) The number of ITA commitments from each RSN.
These subfactors are weighted differently, with the urban
factor weighted at 0.3, the border county factor weighted at
0.05, the homeless factor weighted at 1.0 and the ITA
commitments factor weighted at 0.2. For each of these
factors, information is tracked by MHD and the most recent
complete year of data is used to calculate z score factors for
each subfactor. These factors are combined into a summary z
score factor for each RSN that is multiplied by the total
funding available (twenty percent of non-Medicaid funds
appropriated).)) (a) A portion of the funds are allocated
based on fiscal year 2003 non-Medicaid expenditures incurred
by each RSN
(b) A portion of the funds are allocated based on population in each RSN.
(c) The remaining funds are allocated to ensure that each RSN projected total revenue (PIHP revenue and state only revenue) excluding local match remains at the same level as their projected FY 2005 total revenue.
(((7))) (5) The mental health division does not pay
providers on a fee-for-service basis for services that are the
responsibility of the mental health RSN or PIHP, even if the
RSN or PIHP has not paid for the service for any reason.
(((8))) (6) To the extent authorized by the state
legislature, regional support networks and mental health
prepaid inpatient health plans may use local funds spent on
health services to increase the collection of federal Medicaid
funds. Local funds used for this purpose may not be used as
match for any other federal funds or programs.
[Statutory Authority: RCW 71.05.560, 71.24.035 (5)(c), 71.34.800, 9.41.047, 43.20B.020, and 43.20B.335. 01-12-047, ยง 388-865-0201, filed 5/31/01, effective 7/1/01.]