Original Notice.

     Preproposal statement of inquiry was filed as WSR 06-22-054.

     Title of Rule and Other Identifying Information: Part 3 of 3; amending WAC 388-550-2100 Requirements -- Transplant hospitals, 388-550-2200 Transplant requirements -- COE, 388-550-2301 Hospital and medical criteria requirements for bariatric surgery, 388-550-2400 Inpatient chronic pain management services, 388-550-2500 Inpatient hospice services, and 388-550-2800 Payment methods and limits -- Inpatient hospital services for Medicaid and SCHIP clients.

     Hearing Location(s): Blake Office Park East, Rose Room, 4500 10th Avenue S.E., Lacey, WA 98503 (one block north of the intersection of Pacific Avenue S.E. and Alhadeff Lane. A map or directions are available at http://www1.dshs.wa.gov/msa/rpau/docket.html or by calling (360) 664-6097), on June 5, 2007, at 10:00 a.m.

     Date of Intended Adoption: Not earlier than June 6, 2007.

     Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA 98503, e-mail schilse@dshs.wa.gov, fax (360) 664-6185, by 5:00 p.m. on June 5, 2007.

     Assistance for Persons with Disabilities: Contact Stephanie Schiller by June 1, 2007, TTY (360) 664-6178 or (360) 664-6097 or by e-mail at schilse@dshs.wa.gov.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department is proposing to amend sections in chapter 388-550 WAC relating to hospital requirements for transplants and bariatric surgery, inpatient chronic pain management and hospice services, and payment methods for Medicaid and SCHIP clients in order to change verbiage from "medical assistance administration (MAA)" to "the department," change verbiage from "facility" to "hospital." The proposed changes also reflect updates for dates of admission before August 1, 2007, and on and after August 1, 2007.

     Reasons Supporting Proposal: See above.

     Statutory Authority for Adoption: RCW 74.08.090 and 74.09.500.

     Statute Being Implemented: RCW 74.08.090 and 74.09.500.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Department of social and health services, governmental.

     Name of Agency Personnel Responsible for Drafting: Kathy Sayre, P.O. Box 45504, Olympia, WA 98504-5504, (360) 725-1342; Implementation and Enforcement: Larry Linn, P.O. Box 45502, Olympia, WA 98504-5502, (360) 725-1856.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has determined that the proposed rule will not create more than minor costs for affected small businesses.

     A cost-benefit analysis is not required under RCW 34.05.328. The department has determined that the proposed rule does not meet the definition of "significant legislative rule" under RCW 34.05.328, and therefore a cost-benefit analysis is not required.

April 27, 2007

Stephanie E. Schiller

Rules Coordinator

     (1) The department ((shall)) requires ((a)) instate transplant ((facility)) hospitals to meet the following requirements in order to be ((reimbursed)) paid for transplant services provided to medical ((care)) assistance clients. ((The facility shall)) A hospital must have:

     (a) An approved certificate of need (CON) from the state department of health (DOH) for the type(s) of transplant procedure(s) to be performed, except that ((MAA shall)) the department does not require CON approval for a hospital that provides peripheral stem cell (PSC), skin graft ((and)) or corneal transplant ((facilities)) services;

     (b) Approval from the United Network of Organ Sharing (UNOS) to perform transplants, except that ((MAA shall)) the department does not require UNOS approval for a hospital that provides PSC, skin graft ((and)) or corneal transplant ((facilities)) services; and

     (c) Been approved by the department as a center of excellence transplant center for the specific organ(s) or procedure(s) the ((facility)) hospital proposes to perform.

     (2) The department requires an out-of-state transplant center ((shall)), including bordering city and critical border hospitals, to be a Medicare-certified ((facility)) transplant center in a hospital participating in that state's Medicaid program. All out-of-state transplant services, excluding those provided in department approved centers of excellence (COE) in bordering city and critical border hospitals, must be prior authorized.

     (((2))) (3) The department ((shall)) considers a ((facility)) hospital for approval as a transplant center of excellence when the ((facility)) hospital submits to the department a copy of its DOH-approved CON for transplant services, or documentation that it has, at a minimum:

     (a) Organ-specific transplant physicians for each organ or transplant team. The transplant surgeon and other responsible team members ((shall)) must be experienced and board-certified or board-eligible practitioners in their respective disciplines, including, but not limited to, the fields of cardiology, cardiovascular surgery, anesthesiology, hemodynamics and pulmonary function, hepatology, hematology, immunology, oncology, and infectious diseases. The department ((shall)) considers this requirement met when the ((facility)) hospital submits to the department a copy of its DOH-approved CON for transplant services;

     (b) Component teams which are integrated into a comprehensive transplant team with clearly defined leadership and responsibility. Transplant teams ((shall)) must include, but not be limited to:

     (i) A team-specific transplant coordinator for each type of organ;

     (ii) An anesthesia team available at all times; and

     (iii) A nursing service team trained in the hemodynamic support of the patient and in managing immunosuppressed patients((;)).

     (((iv))) (c) Other resources that the transplant hospital must have include:

     (i) Pathology resources for studying and reporting the pathological responses of transplantation;

     (((v))) (ii) Infectious disease services with both the professional skills and the laboratory resources needed to ((discover,)) identify((,)) and manage a whole range of organisms; and

     (((vi))) (iii) Social services resources.

     (((c))) (d) An organ procurement coordinator;

     (((d))) (e) A method ensuring that transplant team members are familiar with transplantation laws and regulations;

     (((e))) (f) An interdisciplinary body and procedures in place to evaluate and select candidates for transplantation;

     (((f))) (g) An interdisciplinary body and procedures in place to ensure distribution of donated organs in a fair and equitable manner conducive to an optimal or successful patient outcome;

     (((g))) (h) Extensive blood bank support;

     (((h))) (i) Patient management plans and protocols; and

     (((i))) (j) Written policies safeguarding the rights and privacy of patients((; and

     (j) Satisfied)).

     (4) In addition to the requirements of subsection (3) of this section, the transplant hospital must:

     (a) Satisfy the annual volume and survival rates criteria for the particular transplant procedures performed at the ((facility)) hospital, as specified in WAC 388-550-2200(2).

     (((3) In addition to the requirements of subsection (2) of this section, a facility being considered for approval as a transplant center of excellence shall)) (b) Submit a copy of its approval from the United Network for Organ Sharing (UNOS), or documentation showing that the ((facility)) hospital:

     (((a))) (i) Participates in the national donor procurement program and network; and

     (((b))) (ii) Systematically collects and shares data on its transplant program(s) with the network.

     (((4))) (5) The department ((shall apply)) applies the following specific requirements to a PSC transplant ((facilities)) hospital:

     (a) A PSC transplant ((facility may receive approval from the department to do)) hospital must be a department approved COE to perform any of the following PSC services:

     (i) Harvesting, if it has its own apheresis equipment which meets federal or American Association of Blood Banks (AABB) requirements;

     (ii) Processing, if it meets AABB quality of care requirements for human tissue/tissue banking; ((and/or)) and

     (iii) Reinfusion, if it meets the criteria established by the Foundation for the Accreditation of Hematopoietic Cell Therapy.

     (b) A PCS transplant hospital may purchase PSC processing and harvesting services from other department-approved processing providers.

     (((c))) (6) The department ((shall)) does not ((reimburse)) pay a PSC transplant ((facility)) hospital for AABB inspection and certification fees related to PSC transplant services.

[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, § 388-550-2100, filed 12/18/97, effective 1/18/98.]

     (a) Meeting annual volume requirements for the specific transplant procedures for which approved;

     (b) Patient survival rates; and

     (c) Relative cost per case.

     (2) A transplant COE ((shall)) must meet or exceed annually the following applicable volume criteria for the particular transplant procedures performed at the facility, except for cornea transplants which do not have established minimum volume requirements. Annual volume requirements for transplant centers of excellence include:

     (a) Twelve or more heart transplants;

     (b) Ten or more lung transplants;

     (c) Ten or more heart-lung transplants;

     (d) Twelve or more liver transplants;

     (e) Twenty-five or more kidney transplants;

     (f) Eighteen or more pancreas transplants;

     (g) Eighteen or more kidney-pancreas transplants;

     (h) Ten or more bone marrow transplants; and

     (i) Ten or more peripheral stem cell (PSC) transplants.

     Dual-organ procedures may be counted once under each organ and the combined procedure.

     (3) A transplant ((facility)) hospital within the state that fails to meet the volume requirements in subsection (1) of this section may submit a written request to the department for conditional approval as a transplant ((center of excellence)) COE. The department ((shall)) considers the minimum volume requirement met when the requestor submits an approved certificate of need for transplant services from the ((state)) department of health (DOH).

     (4) An in-state ((facility)) hospital granted conditional approval by the department as a transplant ((center of excellence shall)) COE must meet the department's criteria, as established in this chapter, within one year of the conditional approval. The department ((shall)) must automatically revoke such conditional approval for any ((facility)) hospital which fails to meet the department's published criteria within the allotted one year period, unless:

     (a) The ((facility)) hospital submits a written request for extension of the conditional approval thirty calendar days prior to the expiration date; and

     (b) Such request is granted by the department.

     (5) A transplant center of excellence ((shall)) must meet Medicare's survival rate requirements for the transplant procedure(s) performed at the ((facility)) hospital.

     (6) A transplant ((center of excellence shall)) COE must submit to the department annually, at the same time the hospital submits a copy of its Medicare Cost Report (((HCFA)) Form 2552-96 ((report))) documentation showing:

     (a) The numbers of transplants performed at the ((facility)) hospital during its preceding fiscal year, by type of procedure; and

     (b) Survival rates data for procedures performed over the preceding three years as reported on the United Network of Organ Sharing report form.

     (7)(((a))) Transplant ((facilities shall)) hospitals must:

     (a) Submit to the department, within sixty days of the date of the ((facility's)) hospital's approval as a ((center of excellence)) COE, a complete set of the comprehensive patient selection criteria and treatment protocols used by the ((facility)) hospital for each transplant procedure it has been approved to perform.

     (b) ((The facility shall)) Submit to the department annual updates to ((said)) the documents ((annually thereafter)) listed in subsection (a) of this section, or whenever the ((facility)) hospital makes a change to the criteria and/or protocols.

     (c) Notify the department if no changes occurred during a reporting period ((the facility shall so notify the department to this effect)).

     (8) The department ((shall)) evaluates compliance with the provisions of WAC 388-550-2100 (2)(d) and (e) based on the protocols and criteria submitted to the department by a transplant ((centers of excellence)) COE in accordance with subsection (7) of this section. The department ((shall)) terminates a ((facility's)) hospital's designation as a transplant ((center of excellence)) COE if a review or audit finds that ((facility)) hospital in noncompliance with:

     (a) Its protocols and criteria in evaluating and selecting candidates for transplantation; and

     (b) Distributing donated organs in a fair and equitable manner that promotes an optimal or successful patient outcome.

     (9)(((a))) The department ((shall)):

     (a) Provides notification to a transplant ((centers of excellence)) COE it finds in noncompliance with subsection (8) of this section, and may allow from the date of notification sixty days within which such centers may submit a plan to correct a breach of compliance;

     (b) ((The department shall)) Does not allow the sixty-day option as stated in (a) of this subsection for a breach that constitutes a danger to the health and safety of clients as stated in WAC 388-502-0030;

     (c) Requires, within six months of submitting a plan to correct a breach of compliance, a center ((shall)) to report ((to the department showing)) that:

     (i) The breach of compliance has been corrected; or

     (ii) Measurable and significant improvement toward correcting such breach of compliance exists.

     (10) The department ((shall)) periodically reviews the list of approved transplant ((centers of excellence)) COEs. The department may limit the number of ((facilities)) hospitals it designates as a transplant ((centers of excellence)) COE or contracts with to provide services to medical ((care)) assistance clients if, in the department's opinion, doing so would promote better client outcomes and cost efficiencies.

     (11) The department ((shall reimburse)) pays a department-approved ((centers of excellence)) COE for covered transplant procedures using ((any of the)) methods identified in chapter 388-550 WAC.

[Statutory Authority: RCW 74.08.090. 01-02-075, § 388-550-2200, filed 12/29/00, effective 1/29/01. 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, § 388-550-2200, filed 12/18/97, effective 1/18/98.]

     (a) The client qualifies for bariatric surgery by successfully completing all requirements under WAC 388-531-1600;

     (b) The client continues to meet the criteria to qualify for bariatric surgery under WAC 388-531-1600 up to the actual surgery date; ((and))

     (c) The hospital providing the bariatric surgery and bariatric surgery-related services meets the requirements in this section and other applicable WAC; and

     (d) The hospital receives prior authorization from the department prior to performing a bariatric surgery for a medical assistance client.

     (2) A hospital must meet the following requirements in order to be ((reimbursed)) paid for bariatric surgery and bariatric surgery-related services provided to an eligible medical assistance client. The hospital must:

     (a) Be approved by the department to provide bariatric surgery and bariatric surgery-related services and;

     (i) For dates of admission on or after July 1, 2007, be located in Washington state or approved bordering cities (see WAC 388-501-0175) ((and have a current core provider agreement with MAA)).

     (ii) For dates of admission on or after July 1, 2007, be located in Washington state, or be a department-designated critical border hospital.

     (b) Have an established bariatric surgery program in operation under which at least one hundred bariatric surgery procedures have been performed. The program must have been in operation for at least five years and be under the direction of an experienced board-certified surgeon. In addition, ((MAA)) department requires the bariatric surgery program to:

     (i) Have a mortality rate of two percent or less;

     (ii) Have a morbidity rate of fifteen percent or less;

     (iii) Document patient follow-up for at least five years postsurgery;

     (iv) Have an average loss of at least fifty percent of excess body weight achieved by patients at five years postsurgery; and

     (v) Have a reoperation or revision rate of five percent or less.

     (c) Submit documents to ((MAA's Division of Medical Management)) the department's division of healthcare services that verify the performance requirements listed in this section. ((The hospital must receive approval from MAA prior to performing a bariatric surgery for a medical assistance client.))

     (3) ((MAA)) The department waives the program requirements listed in subsection (2)(b) of this section if the hospital participates in a statewide bariatric surgery quality assurance program such as the surgical Clinical Outcomes Assessment Program (COAP).

     (4) See WAC 388-531-1600(13) for requirements for surgeons who perform bariatric surgery.

     (5) Authorization does not guarantee payment. Authorization for bariatric surgery and bariatric surgery-related services is valid only if:

     (a) The client is eligible on the date of admission and date of service; and

     (b) The hospital and professional providers meets the criteria in this section and other applicable WAC to perform bariatric surgery and/or to provide bariatric surgery-related services.

[Statutory Authority: RCW 74.08.090, 74.09.520. 05-12-022, § 388-550-2301, filed 5/20/05, effective 6/20/05.]

     (3) The department shall not reimburse a contract facility for unrelated services provided during the client's inpatient stay for chronic pain management, unless the facility requested and received prior approval from the department for those services)) The department pays a hospital that is specifically approved by the department to provide inpatient chronic pain management services, an all-inclusive per diem facility fee. The department pays professional fees for chronic pain management services to performing providers in accordance with the department's fee schedule.

     (2) A client qualifies for inpatient chronic pain management services when all of the following apply:

     (a) The client has had pain for at least three months and has not improved with conservative treatment, including tests and therapies;

     (b) At least six months have passed since a previous surgical procedure was done in relation to the pain problem; and

     (c) A client with active substance abuse must have completed a detoxification program, if appropriate, and must be free from drugs and/or alcohol for at least six months.

     (3) The department:

     (a) Covers inpatient chronic pain management training to assist eligible clients to manage chronic pain.

     (b) Pays for only one inpatient hospital stay, up to a maximum of twenty-one consecutive days, for chronic pain management training per a client's lifetime.

     (c) Does not require prior authorization for chronic pain management services.

     (d) Does not pay for services unrelated to the chronic pain management services that are provided during the client's inpatient stay, unless the hospital requests and receives prior authorization from the department

     (4) All applicable claim payment adjustments for client responsibility, third party liability, medicare crossover, etc., apply to the department.

[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, § 388-550-2400, filed 12/18/97, effective 1/18/98.]

     (a) The hospice agency coordinates the provision of such inpatient services; and

     (b) Such services are related to the medical condition for which the client sought hospice care.

     (2) Hospice agencies ((shall)) must bill the department for their services using revenue codes. The department ((shall reimburse)) pays hospice providers a set per diem fee according to the type of care provided to the client on a daily basis.

     (3) The department ((shall reimburse)) pays hospital providers directly pursuant to this chapter for inpatient care provided to clients in the hospice program for medical conditions not related to their terminal illness.

[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, § 388-550-2500, filed 12/18/97, effective 1/18/98.]

     (1) The department pays hospitals for medicaid and SCHIP inpatient hospital services using the rate setting methods identified in the department's approved state plan as follows:

Payment method used for Medicaid inpatient hospital claims	Applicable providers/services	Process to adjust for third-party liability insurance and any other client responsibility
Diagnosis related group (DRG) negotiated conversion factor	Hospitals participating in the medicaid hospital selective contracting program under waiver from the federal government	Lesser of either the DRG billed amount minus the third-party payment and any client responsibility amount, or the allowable, minus the third-party payment amount and any client responsibility amount.
DRG cost-based conversion factor	Hospitals not participating in or exempt from the medicaid hospital selective contracting program	Lesser of either the DRG billed amount minus the third-party payment amount and any client responsibility amount, or the allowable, minus the third-party payment amount and any client responsibility amount.
Ratio of costs-to-charges (RCC)	((Hospitals or)) Some services exempt from DRG payment methods	The allowable minus the third-party payment amount and any client responsibility amount.
Costs-to-charges rate with a "hold harmless" settlement provision	Hospitals eligible to be paid through the certified public expenditure (CPE) payment program	The allowable minus the third-party payment amount and any client responsibility amount. The payment made is the federal share only.
Single case rate	Hospitals eligible to provide bariatric surgery to medical assistance clients	Single case rate minus the third-party payment amount and any client responsibility amount.
Fixed per diem rate	Long-term acute care (LTAC) hospitals	Per diem amount minus the third-party payment amount and any client responsibility amount.
Per diem rate	Some providers/services exempt from the DRG payment methods	Per diem amount, and for some services a high outlier amount, minus the third-party payer amount and any client responsibility amount.
Cost settlement	DOH-approved critical access hospitals (CAHs)	The allowable ((times the approved CAH rate)), subject to retrospective cost settlement, minus the third-party payment amount and any client responsibility amount.
Medicaid base community psychiatric hospitalization rate	Nonstate-owned free-standing psychiatric hospitals located in Washington state	Paid according to applicable payment method in WAC 388-550-2650 for medicaid and SCHIP clients, minus the third-party payment amount and any client responsibility amount.

     See WAC 388-550-4800 for payment methods used by the department for inpatient hospital services provided to clients eligible under state-administered programs.

     (2) The department's annual aggregate medicaid and SCHIP payments to each hospital for inpatient hospital services provided to medicaid and SCHIP clients will not exceed the hospital's usual and customary charges to the general public for the services (42 CFR Sec. 447.271). The department recoups annual aggregate medicaid and SCHIP payments that are in excess of the usual and customary charges.

     (3) The department's annual aggregate payments for inpatient hospital services, including state-operated hospitals, will not exceed the estimated amounts that the department would have paid using medicare payment principles.

     (4) When hospital ownership changes, the department's payment to the hospital will not exceed the amount allowed under 42 U.S.C. Section 1395x (v)(1)(O).

     (5) Hospitals participating in the department's medical assistance program must annually submit to the department:

     (a) A copy of the hospital's CMS medicare cost report (form 2552-96) that is the official "as ((submitted)) filed" cost report submitted to the medicare fiscal intermediary; and

     (b) A disproportionate share hospital (DSH) application if the hospital wants to be considered for DSH payments. See WAC 388-550-4900 for the requirement for a hospital to qualify for a DSH payment.

     (6) Reports referred to in subsection (5) of this section must be completed according to:

     (a) Medicare's cost reporting requirements;

     (b) The provisions of this chapter; and

     (c) Instructions issued by the department.

     (7) The department requires hospitals to follow generally accepted accounting principles.

     (8) Participating hospitals must permit the department to conduct periodic audits of their financial records, statistical records, and any other records as determined by the department.

     (9) The department limits payment for private room accommodations to the semiprivate room rate. Room charges must not exceed the hospital's usual and customary charges to the general public as required by 42 C.F.R. Sec. 447.271.

     (10) For a client's hospital stay that involves both regional support network (RSN)-approved voluntary inpatient and involuntary inpatient hospitalizations, the hospital must bill the department for payment, unless the hospital contracts directly with the RSN. In that case, the hospital must bill the RSN for payment.

     (11) ((The department pays hospitals to cover the cost of certain newborn screening tests that are required under chapter 70.83 RCW (see also chapter 246-650 WAC). The flat fees that are not included in the DRG rate but are related to performing the newborn screening tests are added to the DRG payment. Hospitals are responsible to bill for all newborn screening fees when submitting any claims for newborn services to the department.

     (12))) Refer to subsection (1) of this section for how the department adjusts inpatient hospital claims for third party payment amounts and any client responsibility amounts.

[Statutory Authority: RCW 74.08.090, 74.09.500, and 2005 c 518, § 204, Part II. 07-06-043, § 388-550-2800, filed 3/1/07, effective 4/1/07. Statutory Authority: RCW 74.08.090, 74.09.520. 05-12-022, § 388-550-2800, filed 5/20/05, effective 6/20/05. Statutory Authority: RCW 74.08.090 and 74.09.500. 04-19-113, § 388-550-2800, filed 9/21/04, effective 10/22/04. Statutory Authority: RCW 74.08.090, 74.09.500, 74.09.035(1), and 43.88.290. 02-21-019, § 388-550-2800, filed 10/8/02, effective 11/8/02. 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, § 388-550-2800, filed 7/31/01, effective 8/31/01. Statutory Authority: RCW 74.09.090, 42 U.S.C. 1395x(v) and 1396r-4, 42 C.F.R. 447.271, 11303 and 2652. 99-14-027, § 388-550-2800, 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, § 388-550-2800, 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, § 388-550-2800, filed 12/18/97, effective 1/18/98.]

© Washington State Code Reviser's Office