PROPOSED RULES
SOCIAL AND HEALTH SERVICES
(Medical Assistance Administration)
Original Notice.
Preproposal statement of inquiry was filed as WSR 02-06-086.
Title of Rule: Chapter 388-540 WAC, Kidney disease program and kidney center services.
CHAPTER 388-540 WAC, KIDNEY DISEASE PROGRAM AND KIDNEY CENTER SERVICES: Amending WAC 388-540-001 Purpose and 388-540-005 Definitions; repealing WAC 388-540-010, 388-540-020, 388-540-030, 388-540-040, 388-540-050 and 388-540-060; and new sections KIDNEY DISEASE PROGRAM (KDP): WAC 388-540-015 Client eligibility, 388-540-025 Eligibility determination, 388-540-035 Transfer of resources, 388-540-045 Provider requirements, 388-540-055 Covered services and 388-540-065 Reimbursement, KIDNEY CENTER SERVICES: WAC 388-540-101 Purpose and scope, 388-540-105 Definitions, 388-540-110 Eligibility, 388-540-120 Provider requirements, 388-540-130 Covered services, 388-540-140 Noncovered services, 388-540-150 Reimbursement, 388-540-160 Items and services included in the composite rate, 388-540-170 Items and services not included in the composite rate, 388-540-180 Laboratory services, 388-540-190 Blood products and services, 388-540-200 Epoetin alpha therapy, and 388-540-210 Injectable drugs given in the kidney center.
Purpose: To reflect operating changes that are necessary to: (1) Comply with federal requirements for Medicaid dialysis reimbursements; and (2) meet Department of Social and Health Services (DSHS) utilization and cost containment initiative (UCCI) budget targets.
Statutory Authority for Adoption: RCW 74.08.090, 74.09.520.
Statute Being Implemented: RCW 74.09.510, 74.09.520(3), and 74.09.522; 42 C.F.R. 405.2101 and 42 C.F.R. 447.325.
Summary: The proposed changes will:
| • | Improve the clarity and completeness of rules for the state-funded kidney disease program; |
| • | Improve the clarity and completeness of rules for MAA's reimbursements to free-standing kidney centers; |
| • | Establish rules for new reimbursement limitations and methodologies. |
Reasons Supporting Proposal: These rules are needed in order to reflect operating changes and reimbursement limitations. Stakeholders have been actively involved in developing the rules. A state plan amendment has been approved.
Name of Agency Personnel Responsible for Drafting: Myra Davis, MAA, P.O. Box 45533, Olympia, WA 98504-5533, (360) 725-1306; Implementation and Enforcement: Mary Wendt, MAA, P.O. Box 45510, Olympia, WA 98504-5510, (360) 725-1840.
Name of Proponent: Department of Social and Health Services, governmental.
Rule is necessary because of federal law, 42 C.F.R. 405.2101 and 42 C.F.R. 447-325.
Explanation of Rule, its Purpose, and Anticipated Effects: The proposal replaces brief, general language in chapter 388-540 WAC with a more complete description of MAA's kidney disease program (KDP) and rules for reimbursing free-standing kidney centers. The proposal includes new reimbursement methodologies and limitations.
Proposal Changes the Following Existing Rules: There are no substantive operating changes for the kidney disease program.
There are substantive changes in how the Medical Assistance Administration (MAA) reimburses free-standing kidney centers for providing dialysis to MAA clients) other than KDP clients):
| • | A single dialysis session is reimbursed through a single "composite rate payment"; |
| • | Composite rate payments are limited on a per month per client basis; |
| • | Drugs billed to MAA must meet rebate requirements of WAC 388-530-1125; |
| • | Reimbursement for Epoetin alpha is subject to hematocrit and hemoglobin specifications; |
| • | Injectable drugs given in the kidney center are reimbursed up to MAA's published maximum fees. |
A small business economic impact statement has been prepared under chapter 19.85 RCW.
The new rules are needed to clarify and set-apart MAA rules for the state-funded kidney disease program, and to bring MAA rules for free-standing kidney centers into compliance with federal requirements.
The proposed changes:
| • | Update program-related definitions; |
| • | Provide a more complete description of the kidney disease program (KDP); and |
| • | Update department policy for dialysis services in free-standing kidney centers, including limitations and reimbursement methodology: |
| &sqbul; | A single dialysis session is reimbursed through a single "composite rate payment"; |
| &sqbul; | Composite rate payments are limited on a per month per client basis; |
| &sqbul; | Drugs billed to MAA must meet rebate requirements of WAC 388-530-1125; |
| &sqbul; | Reimbursement for Epoetin alpha is subject to hematocrit and hemoglobin specifications; and |
| &sqbul; | Injectable drugs given in the kidney center are reimbursed up to MAA's published maximum fees. |
Preparation of an SBEIS is required when a proposed rule has the potential of placing "a more than minor economic impact" on small businesses.
The Medical Assistance Administration (MAA) has analyzed the proposed rule and concludes:
| • | There is a more than minor economic impact on free-standing kidney centers; |
| • | There is no disproportionate impact on small businesses; and |
| • | The centers are either nonprofit corporations or business sites run by major private for-profit corporations that do not qualify under the definition of small business. |
MAA changed the payment method for the free-standing kidney centers; moving from billed charges for unbundled services to a "composite rate" method. Over this past year MAA has negotiated with CMS in calculating a statewide payment per composite dialysis session for Washington state, including a cost factor for education and support in beginning dialysis. The composite rate was calculated from an average cost of the free-standing kidney centers' dialysis sessions, then inflated from CY 2000 to CY 2002 by the Washington general vendor rate increase for these related years.
MAA, the kidney centers and other stakeholders have made a concerted effort to satisfy all regulatory and budgetary requirements while minimizing, to the extent possible, the negative economic impacts.
EVALUATION OF PROBABLE COSTS AND PROBABLE BENEFITS: As required by RCW 34.05.328 (1)(c), the administration has analyzed the probable costs and probable benefits of the proposed amendments, taking into account both the qualitative and quantitative benefits and costs.
The proposed amendments make significant changes to current rules for free-standing kidney centers. These amendments and reduced reimbursements reflect changes in the federal regulatory environment, critical economic conditions for Washington state and regulatory improvement efforts.
MAA's new payment method will mirror Medicare processes, so there will be only minimal costs of implementation for the centers. However, over the course of the 2001-2003 biennium, the change from billed charges to the composite rate may result in the centers collectively receiving approximately $3,180,000.00 less in revenue.
This is a critical cost savings to MAA and the state of Washington.
Given the financial emergency within state government, and considering that failure to reduce reimbursements could have resulted in loss of federal match for all sums paid above the Medicare rate; MAA concludes the probable benefits outweigh the probable costs.
A copy of the statement may be obtained by writing to Myra Davis, Medical Assistance Administration, P.O. Box 45533, Olympia, WA 98504-5533, phone (360) 725-1306, fax (360) 586-9727.
RCW 34.05.328 applies to this rule adoption. The proposed rule change meets the definition of a significant legislative rule. A determination of the probable costs and benefits is available from the persons listed above.
Hearing Location: Blake Office Park (behind Goodyear Courtesy Tire), 4500 10th Avenue S.E., Rose Room, Lacey, WA 98503, on August 26, 2003, at 10:00 a.m.
Assistance for Persons with Disabilities: Contact Andy Fernando, DSHS Rules Coordinator, by August 22, 2003, phone (360) 664-6094, TTY (360) 664-6178, e-mail fernaax@dshs.wa.gov.
Submit Written Comments to: Identify WAC Numbers, Department of Social and Health Services, Rules Coordinator, Rules and Policies Assistance Unit, mail to P.O. Box 45850, Olympia, WA 98504-5850, deliver to 4500 10th Avenue S.E., Lacey, WA, fax (360) 664-6185, e-mail fernaax@dshs.wa.gov, by 5:00 p.m., August 26, 2003.
Date of Intended Adoption: Not sooner than August 27, 2003.
June 27, 2003
Brian H. Lindgren, Manager
Rules and Policies Assistance Unit
Reviser's note: The material contained in this filing exceeded the page-count limitations of WAC 1-21-040 for appearance in this issue of the Register. It will appear in the 03-15 issue of the Register.