SOCIAL AND HEALTH SERVICES
(Health and Recovery Services Administration)
Effective Date of Rule: February 24, 2010.
Purpose: These amendments are necessary to describe the reimbursement methodology the department will use for rural health clinics (RHC), as authorized by 42 U.S.C. 1396a(bb) and to match the language in the department's state plan which ensures state receipt of federal funds.
Citation of Existing Rules Affected by this Order: Amending WAC 388-549-1100, 388-549-1400, and 388-549-1500.
Statutory Authority for Adoption: RCW 74.08.090.
Other Authority: 42 U.S.C. 1396a(bb), RCW 74.09.510, 74.09.522, 42 C.F.R. 405.2472, 42 C.F.R. 491.
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: This emergency rule adoption is required in order to match the language in the department's state plan which ensures state receipt of federal funds. This emergency filing is necessary to continue the current emergency rules filed as WSR 09-22-030 on October 27, 2009, while the department completes the permanent rule-making process. The public hearing for the permanent rules was held on January 26, 2010. The department is currently preparing the CR-103 for final adoption.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 3, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 3, Repealed 0.
Date Adopted: February 12, 2010.
Don Goldsby, Manager
Rules and Policies Assistance Unit4119.6
"APM index"--The alternative payment methodology (APM) is used to update APM encounter payment rates on an annual basis. The APM index is a measure of input price changes experienced by Washington's federally qualified health center (FQHC) and rural health clinic (RHC) providers.
"Base year" -- The year that is used as the benchmark in measuring a clinic's total reasonable costs for establishing base encounter rates.
"Change in scope of service" -- A change in the type,
intensity, duration, or amount of service.))
"Encounter" -- A face-to-face visit between a client and a qualified rural health clinic (RHC) provider (e.g., a physician, physician's assistant, or advanced registered nurse practitioner) who exercises independent judgment when providing services that qualify for an encounter rate.
"Encounter rate" -- A cost-based, facility-specific rate for covered RHC services, paid to a rural health clinic for each valid encounter it bills.
"Enhancements" (also called ((
healthy options (HO)))
managed care enhancements)--A monthly amount paid to RHCs for
each client enrolled with a managed care organization (MCO). Plans may contract with RHCs to provide services under
(( healthy options)) managed care programs. RHCs receive
enhancements from the department in addition to the negotiated
payments they receive from the MCOs for services provided to
"Fee-for-service" -- A payment method the department uses
to pay providers for covered medical services provided to
medical assistance clients, except those services provided
under the department's prepaid managed care organizations or
those services that qualify for an encounter ((
"Interim rate" -- The rate established by the department to
pay a rural health clinic for covered RHC services prior to
the establishment of a ((
prospective payment system (PPS)))
permanent rate for that facility.
"Medicare cost report" -- The cost report is a statement of costs and provider utilization that occurred during the time period covered by the cost report. RHCs must complete and submit a report annually to medicare.
"Mobile unit" -- The objects, equipment, and supplies necessary for provision of the services furnished directly by the RHC are housed in a mobile structure.
"Permanent unit" -- The objects, equipment and supplies necessary for the provision of the services furnished directly by the clinic are housed in a permanent structure.
"Rebasing"--The process of recalculating the conversion factors, per diems, per case rates, or RCC rates using historical data.
"Rural area"--An area that is not delineated as an urbanized area by the Bureau of the Consensus.
"Rural health clinic (RHC)"--A clinic, as defined in 42 CFR 405.2401(b), that is primarily engaged in providing RHC services and is:
• Located in a rural area designated as a shortage area as defined under 42 CFR 491.2;
• Certified by medicare as a RHC in accordance with applicable federal requirements; and
• Not a rehabilitation agency or a facility primarily for the care and treatment of mental diseases.
"Rural health clinic (RHC) services" -- Outpatient or
ambulatory care of the nature typically provided in a
physician's office or outpatient clinic ((
and the like)) or
similar setting, including specified types of diagnostic
examination, laboratory services, and emergency treatments. The specific list of services which must be made available by
the clinic can be found under 42 CFR part 491.9.
[Statutory Authority: RCW 74.08.090, 74.09.510, 74.09.522, 42 C.F.R. 405.2472, 42 C.F.R. 491. 08-05-011, § 388-549-1100, filed 2/7/08, effective 3/9/08.]
Effective January 1, 2009, RHCs have the choice to continue being reimbursed under the PPS or be reimbursed under an alternative payment methodology (APM), in accordance with 42 USC 1396a (bb)(6).
(a))) (2) The department calculates the RHC's PPS
encounter rate for RHC core services as follows:
(i))) (a) Until the RHC's first audited medicare cost
report is available, the department pays an average encounter
rate of other similar RHCs ((( such)) whether the RHC is
classified as hospital-based or free-standing) within the
state, otherwise known as an interim rate.
(ii))) (b) Upon availability of the RHC's audited
medicare cost report, the department sets the clinic's
encounter rate at one hundred percent of its costs as defined
in the cost report divided by the total number of encounters
the clinic has provided during the time period covered in the
audited cost report. The RHC will receive this rate for the
remainder of the calendar year during which the audited cost
report became available. The encounter rate is then inflated
each January 1 by the medicare economic index (MEI) for
primary care services.
(2))) (3) For RHCs in existence during calendar years
1999 and 2000, the department sets the payment prospectively
using a weighted average of one hundred percent of the
clinic's total reasonable costs for calendar years 1999 and
2000 and adjusted for any increase or decrease in the scope of
services furnished during the calendar year 2001 to establish
a base encounter rate.
(a) The department adjusts a PPS base encounter rate to account for an increase or decrease in the scope of services provided during calendar year 2001 in accordance with WAC 388-549-1500.
(b) The PPS base encounter rates are determined using medicare's audited cost reports and each year's rate is weighted by the total reported encounters. The department does not apply a capped amount to these base encounter rates. The formula used to calculate the base encounter rate is as follows:
|Specific RHC Base Encounter Rate =||(1999 Rate x 1999 Encounters) + (2000 Rate x 2000 Encounters)|
|(1999 Encounters + 2000 Encounters) for each RHC|
(3))) (4) The department calculates the RHC's APM
encounter rate as follows:
(a) For the period beginning January 1, 2009, the APM utilizes RHC base encounter rates as described in WAC 388-549-1400 (3)(b). The base rates are inflated by each annual percentage, from years 2002 through 2009, of the APM index. The result is the year 2009 APM rate for each RHC that chooses to be reimbursed under the APM.
(b) To ensure that the APM pays an amount that is at least equal to the PPS in accordance with 42 USC 1396a (bb)(6), the annual inflator used to increase the APM rates is the greater of the APM index or the MEI.
(c) The department periodically rebases the APM rates. The department does not rebase rates determined under the PPS.
(d) When rebasing the APM encounter rates, the department applies a productivity standard to the number of visits performed by each practitioner group (physicians and mid-levels) to determine the number of encounters to be used in each RHC's rate calculation. The productivity standards are determined by reviewing all available RHC cost reports for the rebasing period and setting the standards at the levels necessary to allow ninety-five percent of the RHCs to meet the standards. The encounter rates of the clinics that meet the standards are calculated using each clinic's actual number of encounters. The encounter rates of the other five percent of clinics are calculated using the productivity standards. This process is applied at each rebasing, so the actual productivity standards may change each time encounter rates are rebased.
(5) The department pays for one encounter, per client, per day except in the following circumstances:
(a) The visits occur with different doctors with different specialties; or
(b) There are separate visits with unrelated diagnoses.
(4))) (6) RHC services and supplies incidental to the
provider's services are included in the encounter rate
(5))) (7) (( Services other than RHC services that are
provided in an RHC are not included in the RHC encounter
rate.)) Payments for non-RHC services provided in an RHC are
made on a fee-for-service basis using the department's
published fee schedules. Non-RHC services are subject to the
coverage guidelines and limitations listed in chapters 388-500
through 388-557 WAC.
(6))) (8) For clients enrolled with a managed care
organization, covered RHC services are paid for by that plan.
(7))) (9) The department does not pay the encounter
rate or the enhancements for clients in state-only programs. Services provided to clients in state-only programs are
considered fee-for-service, regardless of the type of service
(10) For clients enrolled with a managed care organization (MCO), the department pays each RHC a supplemental payment in addition to the amounts paid by the MCO. The supplemental payments, called enhancements, are paid in amounts necessary to ensure compliance with 42 USC 1396a (bb)(5)(A).
(a) The RHCs receive an enhancement payment each month for each managed care client assigned to them by an MCO.
(b) To ensure that the appropriate amounts are paid to each RHC, the department performs an annual reconciliation of the enhancement payments. For each RHC, the department will compare the amount actually paid to the amount determined by the following formula: (managed care encounters times encounter rate) less fee-for-service equivalent of MCO services. If the clinic has been overpaid, the department will recoup the appropriate amount. If the clinic has been underpaid, the department will pay the difference.
[Statutory Authority: RCW 74.08.090, 74.09.510, 74.09.522, 42 C.F.R. 405.2472, 42 C.F.R. 491. 08-05-011, § 388-549-1400, filed 2/7/08, effective 3/9/08.]
(2))) (a) When the department determines that a change
in scope of service has occurred after the base year, the
department will adjust the RHC's (( perspective payment system
(PPS))) encounter rate to reflect the change.
(3))) (b) RHCs must:
(a))) (i) Notify the department's RHC program manager
in writing, at the address published in the department's rural
health clinic billing instructions, of any changes in scope of
service no later than sixty days after the effective date of
the change; and
(b))) (ii) Provide the department with all relevant and
requested documentation pertaining to the change in scope of
(4))) (c) The department adjusts the (( PPS)) encounter
rate to reflect the change in scope of service using one or
more of the following:
(a))) (i) A medicaid comprehensive desk review of the
RHC's cost report;
(b))) (ii) Review of a medicare audit of the RHC's cost
(c))) (iii) Other documentation relevant to the change
in scope of service.
(5))) (d) The adjusted encounter rate will be effective
on the date the change of scope of service is effective.
(2) For clinics reimbursed under the alternative payment methodology (APM), the department considers an RHC change in scope of service to be a change in the type of services provided by the RHC. The department addresses changes in intensity, duration, and/or amount of services in the next scheduled encounter rate rebase. Changes in scope of service apply only to covered medicaid services.
(a) When the department determines that a change in scope of service has occurred after the base year, the department adjusts the RHC's encounter rate to reflect the change.
(b) RHCs must:
(i) Notify the department's RHC program manager in writing, at the address published in the department's rural health clinic billing instructions, of any changes in scope of service no later than sixty calendar days after the effective date of the change; and
(ii) Provide the department with all relevant and requested documentation pertaining to the change in scope of service.
(c) The department adjusts the encounter rate to reflect the change in scope of service using one or more of the following:
(i) A medicaid comprehensive desk review of the RHC's cost report;
(ii) Review of a medicare audit of the RHC's cost report, if available; or
(iii) Other documentation relevant to the change in scope of service.
(d) The adjusted encounter rate will be effective on the date the change of scope of service is effective.
[Statutory Authority: RCW 74.08.090, 74.09.510, 74.09.522, 42 C.F.R. 405.2472, 42 C.F.R. 491. 08-05-011, § 388-549-1500, filed 2/7/08, effective 3/9/08.]