WSR 12-09-087



(Medicaid Program)

[ Filed April 18, 2012, 10:01 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 11-19-005.

Title of Rule and Other Identifying Information: Amending WAC 182-531-0050 Physician-related services definitions and 182-530-7000 Reimbursement; and new WAC 182-531-1625 Outpatient hemophilia treatment requirements -- Center of excellence.

Hearing Location(s): Health Care Authority (HCA), Cherry Street Plaza Building, Sue Crystal Conference Room (106A), 626 8th Avenue, Olympia, WA 98504 (metered public parking is available street side around building. A map is available at or directions can be obtained by calling (360) 725-1000), on May 22, 2012, at 10:00 a.m.

Date of Intended Adoption: Not sooner than May 23, 2012.

Submit Written Comments to: HCA Rules Coordinator, P.O. Box 45504, Olympia, WA 98504-5504, delivery 626 8th Avenue, Olympia, WA 98504, e-mail, fax (360) 586-9727, by 5:00 p.m. on May 22, 2012.

Assistance for Persons with Disabilities: Contact Kelly Richters by May 15, 2012, TTY/TDD (800) 848-5429 or (360) 725-1307 or e-mail

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: These revisions establish rules for hemophilia centers of excellence (COE) including requirements for qualifying for and maintaining hemophilia COE status. The rules specify that for fee-for-service clients, the agency pays only qualified hemophilia treatment COE for providing outpatient hemophilia related products and supplies. The agency also made housekeeping fixes within the text by changing "department" to "agency" - to align with the recent departure of medicaid from the department of social and health services and merger with HCA.

Reasons Supporting Proposal: To improve care oversight and link hemophilia product management to the comprehensive hemophilia diagnostic and treatment centers operating under the national hemophilia program and providing services that meet or exceed standards recommended by the National Hemophilia Foundation's Medical and Scientific Advisory Committee.

Statutory Authority for Adoption: RCW 41.05.021.

Statute Being Implemented: RCW 41.05.021.

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

Name of Proponent: HCA, governmental.

Name of Agency Personnel Responsible for Drafting: Wendy L. Boedigheimer, HCA, P.O. Box 45504, Olympia, WA, (360) 725-1306; Implementation and Enforcement: Myra Davis, HCA, P.O. Box 45510, Olympia, WA, (360) 725-1847.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The agency has analyzed the proposed rules and concludes that they do not impose more than minor costs for affected small businesses.

A cost-benefit analysis is not required under RCW 34.05.328. RCW 34.05.328 does not apply to HCA rules unless requested by the joint administrative rules [review] committee or applied voluntarily.

April 18, 2012

Kevin M. Sullivan

Rules Coordinator


AMENDATORY SECTION(Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)

WAC 182-530-7000   Reimbursement.   (1) The ((department's)) agency's total reimbursement for a prescription drug must not exceed the lowest of:

(a) Estimated acquisition cost (EAC) plus a dispensing fee;

(b) Maximum allowable cost (MAC) plus a dispensing fee;

(c) Federal upper limit (FUL) plus a dispensing fee;

(d) Actual acquisition cost (AAC) plus a dispensing fee for drugs purchased under section 340B of the Public Health Service (PHS) Act;

(e) Automated maximum allowable cost (AMAC) plus a dispensing fee; or

(f) The provider's usual and customary charge to the nonmedicaid population.

(2) The ((department)) agency selects the sources for pricing information used to set EAC and MAC.

(3) The ((department)) agency may solicit assistance from pharmacy providers, pharmacy benefit managers (PBM), other government agencies, actuaries, and/or other consultants when establishing EAC and/or MAC.

(4) The ((department)) agency reimburses a pharmacy for the least costly dosage form of a drug within the same route of administration, unless the prescriber has designated a medically necessary specific dosage form or the ((department)) agency has selected the more expensive dosage form as a preferred drug.

(5) If the pharmacy provider offers a discount, rebate, promotion or other incentive which directly relates to the reduction of the price of a prescription to the individual nonmedicaid customer, the provider must similarly reduce its charge to the ((department)) agency for the prescription.

(6) If the pharmacy provider gives an otherwise covered product for free to the general public, the pharmacy must not submit a claim to the ((department)) agency.

(7) The ((department)) agency does not reimburse for:

(a) Prescriptions written on presigned prescription blanks filled out by nursing facility operators or pharmacists;

(b) Prescriptions without the date of the original order;

(c) Drugs used to replace those taken from a nursing facility emergency kit;

(d) Drugs used to replace a physician's stock supply;

(e) Outpatient drugs, biological products, insulin, supplies, appliances, and equipment included in other reimbursement methods including, but not limited to:

(i) Diagnosis-related group (DRG);

(ii) Ratio of costs-to-charges (RCC);

(iii) Nursing facility daily rates;

(iv) Managed care capitation rates;

(v) Block grants; or

(vi) Drugs prescribed for clients who are on the ((department's)) agency's hospice program when the drugs are related to the client's terminal illness and related condition.

(f) Products for treatment of hemophilia and von Willebrand disorders unless provided by an outpatient hemophilia treatment center of excellence (COE) as defined in WAC 182-531-1625.

[11-14-075, recodified as 182-530-7000, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.04.050, 74.08.090, 74.09.530, and 74.09.700. 07-20-049, 388-530-7000, filed 9/26/07, effective 11/1/07.]


AMENDATORY SECTION(Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)

WAC 182-531-0050   Physician-related services definitions.   The following definitions and abbreviations and those found in ((WAC 388-500-0005)) chapter 182-500 WAC, apply to this chapter. ((Defined words and phrases are bolded the first time they are used in the text.))

"Acquisition cost" ((means)) - The cost of an item excluding shipping, handling, and any applicable taxes.

"Acute care" ((means)) - Care provided for clients who are not medically stable. These clients require frequent monitoring by a health care professional in order to maintain their health status. See also WAC 246-335-015.

"Acute physical medicine and rehabilitation (PM&R)" ((means)) - A comprehensive inpatient and rehabilitative program coordinated by a multidisciplinary team at ((a department-approved)) an agency-approved rehabilitation facility. The program provides twenty-four hour specialized nursing services and an intense level of specialized therapy (speech, physical, and occupational) for a diagnostic category for which the client shows significant potential for functional improvement (see WAC ((388-550-2501)) 182-550-2501).

"Add-on procedure(s)" ((means)) - Secondary procedure(s) that are performed in addition to another procedure.

"Admitting diagnosis" ((means)) - The medical condition responsible for a hospital admission, as defined by ICD-9-M diagnostic code.

"Advanced registered nurse practitioner (ARNP)" ((means)) - A registered nurse prepared in a formal educational program to assume an expanded health services provider role in accordance with WAC 246-840-300 and 246-840-305.

"Aging and disability services administration (ADSA)" ((means)) - The administration that administers directly or contracts for long-term care services, including but not limited to nursing facility care and home and community services. See WAC 388-71-0202.

"Allowed charges" ((means)) - The maximum amount reimbursed for any procedure that is allowed by the ((department)) agency.

"Anesthesia technical advisory group (ATAG)" ((means)) - An advisory group representing anesthesiologists who are affected by the implementation of the anesthesiology fee schedule.

"Bariatric surgery" ((means)) - Any surgical procedure, whether open or by laparoscope, which reduces the size of the stomach with or without bypassing a portion of the small intestine and whose primary purpose is the reduction of body weight in an obese individual.

"Base anesthesia units (BAU)" ((means)) - A number of anesthesia units assigned to a surgical procedure that includes the usual pre-operative, intra-operative, and post-operative visits. This includes the administration of fluids and/or blood incident to the anesthesia care, and interpretation of noninvasive monitoring by the anesthesiologist.

"Bundled services" ((means)) - Services integral to the major procedure that are included in the fee for the major procedure. Bundled services are not reimbursed separately.

"Bundled supplies" ((means)) - Supplies which are considered to be included in the practice expense RVU of the medical or surgical service of which they are an integral part.

"By report (BR)," ((means a method of reimbursement in which the department determines the amount it will pay for a service that is not included in the department's published fee schedules. The department may request the provider to submit a "report" describing the nature, extent, time, effort, and/or equipment necessary to deliver the service)) see WAC 182-500-0015.

"Call" ((means)) - A face-to-face encounter between the client and the provider resulting in the provision of services to the client.

"Cast material maximum allowable fee" ((means)) - A reimbursement amount based on the average cost among suppliers for one roll of cast material.

"Center of excellence (COE)" - A hospital, medical center, or other health care provider that meets or exceeds standards set by the agency for specific treatments or specialty care.

"Centers for Medicare and Medicaid Services (CMS)," ((means the agency within the federal Department of Health and Human Services (DHHS) with oversight responsibility for medicare and medicaid programs)) see WAC 182-500-0020.

"Certified registered nurse anesthetist (CRNA)" ((means)) - An advanced registered nurse practitioner (ARNP) with formal training in anesthesia who meets all state and national criteria for certification. The American Association of Nurse Anesthetists specifies the National Certification and scope of practice.

"Children's health insurance plan (CHIP)," see chapter ((388-542)) 182-542 WAC.

"Clinical Laboratory Improvement Amendment (CLIA)" ((means)) - Regulations from the U.S. Department of Health and Human Services that require all laboratory testing sites to have either a CLIA registration or a CLIA certificate of waiver in order to legally perform testing anywhere in the U.S.

"Conversion factors" ((means)) - Dollar amounts the ((department)) agency uses to calculate the maximum allowable fee for physician-related services.

"Covered service" ((means)) - A service that is within the scope of the eligible client's medical care program, subject to the limitations in this chapter and other published WAC.

"CPT," see "current procedural terminology."

"Critical care services" ((means)) - Physician services for the care of critically ill or injured clients. A critical illness or injury acutely impairs one or more vital organ systems such that the client's survival is jeopardized. Critical care is given in a critical care area, such as the coronary care unit, intensive care unit, respiratory care unit, or the emergency care facility.

"Current procedural terminology (CPT)" ((means)) - A systematic listing of descriptive terms and identifying codes for reporting medical services, procedures, and interventions performed by physicians and other practitioners who provide physician-related services. CPT is copyrighted and published annually by the American Medical Association (AMA).

"Diagnosis code" ((means)) - A set of numeric or alphanumeric characters assigned by the ICD-9-CM, or successor document, as a shorthand symbol to represent the nature of a disease.

"Emergency medical condition(s)," ((means a medical condition(s) that manifests itself by acute symptoms of sufficient severity so that the absence of immediate medical attention could reasonably be expected to result in placing the patient's health in serious jeopardy, serious impairment to bodily functions, or serious dysfunction of any bodily organ or part)) see WAC 182-500-0030.

"Emergency services" ((means)) - Medical services required by and provided to a patient experiencing an emergency medical condition.

"Estimated acquisition cost (EAC)" ((means)) - The ((department's)) agency's best estimate of the price providers generally and currently pay for drugs and supplies.

"Evaluation and management (E&M) codes" ((means)) - Procedure codes which categorize physician services by type of service, place of service, and patient status.

"Expedited prior authorization" ((means)) - The process of obtaining authorization that must be used for selected services, in which providers use a set of numeric codes to indicate to the ((department)) agency which acceptable indications, conditions, diagnoses, and/or criteria are applicable to a particular request for services.

"Experimental" ((means)) - A term to describe a procedure, or course of treatment, which lacks sufficient scientific evidence of safety and effectiveness. See WAC ((388-531-0550)) 182-531-0550. A service is not "experimental" if the service:

(1) Is generally accepted by the medical profession as effective and appropriate; and

(2) Has been approved by the FDA or other requisite government body, if such approval is required.

"Federally approved hemophilia treatment center" - A hemophilia treatment center (HTC) which:

(1) Receives funding from the U.S. Department of Health and Human Services, Maternal and Child Health Bureau National Hemophilia Program;

(2) Is qualified to participate in 340B discount purchasing as an HTC;

(3) Has a U.S. Center for Disease Control (CDC) and prevention surveillance site identification number and is listed in the HTC directory on the CDC web site;

(4) Is recognized by the Federal Regional Hemophilia Network that includes Washington state; and

(5) Is a direct care provider offering comprehensive hemophilia care consistent with treatment recommendations set by the Medical and Scientific Advisory Council (MASAC) of the National Hemophilia Foundation in their standards and criteria for the care of persons with congenital bleeding disorders.

"Fee-for-service," ((means the general payment method the department uses to reimburse providers for covered medical services provided to medical assistance clients when those services are not covered under the department's healthy options program or children's health insurance program (CHIP) programs)) see WAC 182-500-0035.

"Flat fee" ((means)) - The maximum allowable fee established by the ((department)) agency for a service or item that does not have a relative value unit (RVU) or has an RVU that is not appropriate.

"Geographic practice cost index (GPCI)" - As defined by medicare, means a medicare adjustment factor that includes local geographic area estimates of how hard the provider has to work (work effort), what the practice expenses are, and what malpractice costs are. The GPCI reflects one-fourth the difference between the area average and the national average.

"Global surgery reimbursement," see WAC ((388-531-1700)) 182-531-1700.

"HCPCS Level II" ((means)) - Health care common procedure coding system, a coding system established by Centers for Medicare and Medicaid Services (CMS) (((formerly known as the Health Care Financing Administration))) to define services and procedures not included in CPT.

"Health care financing administration common procedure coding system (HCPCS)" ((means)) - The name used for the Centers for Medicare and Medicaid Services (formerly known as the Health Care Financing Administration) codes made up of CPT and HCPCS level II codes.

"Health care team" ((means)) - A group of health care providers involved in the care of a client.

"Hospice" ((means)) - A medically directed, interdisciplinary program of palliative services which is provided under arrangement with a Title XVIII Washington licensed and certified Washington state hospice for terminally ill clients and the clients' families.

"ICD-9-CM," see "International Classification of Diseases, 9th Revision, Clinical Modification."

"Informed consent" ((means)) - That an individual consents to a procedure after the provider who obtained a properly completed consent form has done all of the following:

(1) Disclosed and discussed the client's diagnosis; and

(2) Offered the client an opportunity to ask questions about the procedure and to request information in writing; and

(3) Given the client a copy of the consent form; and

(4) Communicated effectively using any language interpretation or special communication device necessary per 42 C.F.R. Chapter IV 441.257; and

(5) Given the client oral information about all of the following:

(a) The client's right to not obtain the procedure, including potential risks, benefits, and the consequences of not obtaining the procedure; and

(b) Alternatives to the procedure including potential risks, benefits, and consequences; and

(c) The procedure itself, including potential risks, benefits, and consequences.

"Inpatient hospital admission" ((means)) - An admission to a hospital that is limited to medically necessary care based on an evaluation of the client using objective clinical indicators, assessment, monitoring, and therapeutic service required to best manage the client's illness or injury, and that is documented in the client's medical record.

"International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM)" ((means)) - The systematic listing that transforms verbal descriptions of diseases, injuries, conditions, and procedures into numerical or alphanumerical designations (coding).

"Investigational" ((means)) - A term to describe a procedure, or course of treatment, which lacks sufficient scientific evidence of benefit for a particular condition. A service is not "investigational" if the service:

(1) Is generally accepted by the medical professional as effective and appropriate for the condition in question; or

(2) Is supported by an overall balance of objective scientific evidence, in which the potential risks and potential benefits are examined, demonstrating the proposed service to be of greater overall benefit to the client in the particular circumstance than another, generally available service.

"Life support" ((means)) - Mechanical systems, such as ventilators or heart-lung respirators, which are used to supplement or take the place of the normal autonomic functions of a living person.

"Limitation extension," ((means a process for requesting and approving reimbursement for covered services whose proposed quantity, frequency, or intensity exceeds that which the department routinely reimburses. Limitation extensions require prior authorization)) see WAC 182-501-0169.

"Maximum allowable fee" ((means)) - The maximum dollar amount that the ((department)) agency will reimburse a provider for specific services, supplies, and equipment.

"Medically necessary," see WAC ((388-500-0005)) 182-500-0070.

"Medicare physician fee schedule data base (MPFSDB)" ((means)) - The official ((HCFA)) CMS publication of the medicare policies and RVUs for the RBRVS reimbursement program.

"Medicare program fee schedule for physician services (MPFSPS)" ((means)) - The official ((HCFA)) CMS publication of the medicare fees for physician services.

"Medicare clinical diagnostic laboratory fee schedule" ((means)) - The fee schedule used by medicare to reimburse for clinical diagnostic laboratory procedures in the state of Washington.

"Mentally incompetent" ((means)) - A client who has been declared mentally incompetent by a federal, state, or local court.

"Modifier" ((means)) - A two-digit alphabetic and/or numeric identifier that is added to the procedure code to indicate the type of service performed. The modifier provides the means by which the reporting physician can describe or indicate that a performed service or procedure has been altered by some specific circumstance but not changed in its definition or code. The modifier can affect payment or be used for information only. Modifiers are listed in fee schedules.

"Outpatient," ((means a client who is receiving medical services in other than an inpatient hospital setting)) see WAC 182-500-0080.

"Peer-reviewed medical literature" ((means)) - Medical literature published in professional journals that submit articles for review by experts who are not part of the editorial staff. It does not include publications or supplements to publications primarily intended as marketing material for pharmaceutical, medical supplies, medical devices, health service providers, or insurance carriers.

"Physician care plan" ((means)) - A written plan of medically necessary treatment that is established by and periodically reviewed and signed by a physician. The plan describes the medically necessary services to be provided by a home health agency, a hospice agency, or a nursing facility.

"Physician standby" ((means)) - Physician attendance without direct face-to-face client contact and which does not involve provision of care or services.

"Physician's current procedural terminology," see "((CPT,)) current procedural terminology (CPT)."

"PM&R," see acute physical medicine and rehabilitation.

"Podiatric service" ((means)) - The diagnosis and medical, surgical, mechanical, manipulative, and electrical treatments of ailments of the foot and ankle.

"Pound indicator (#)" ((means)) - A symbol (#) indicating a CPT procedure code listed in the ((department's)) agency's fee schedules that is not routinely covered.

"Preventive" ((means)) - Medical practices that include counseling, anticipatory guidance, risk factor reduction interventions, and the ordering of appropriate laboratory and diagnostic procedures intended to help a client avoid or reduce the risk or incidence of illness or injury.

"Prior authorization," ((means a process by which clients or providers must request and receive the department approval for certain medical services, equipment, or supplies, based on medical necessity, before the services are provided to clients, as a precondition for provider reimbursement. Expedited prior authorization and limitation extension are forms of prior authorization)) see WAC 182-500-0085.

"Professional component" ((means)) - The part of a procedure or service that relies on the provider's professional skill or training, or the part of that reimbursement that recognizes the provider's cognitive skill.

"Prognosis" ((means)) - The probable outcome of a client's illness, including the likelihood of improvement or deterioration in the severity of the illness, the likelihood for recurrence, and the client's probable life span as a result of the illness.

"Prolonged services" ((means)) - Face-to-face client services furnished by a provider, either in the inpatient or outpatient setting, which involve time beyond what is usual for such services. The time counted toward payment for prolonged E&M services includes only face-to-face contact between the provider and the client, even if the service was not continuous.

"Provider," see WAC ((388-500-0005)) 182-500-0085.

"Radioallergosorbent test" or "RAST" ((means)) - A blood test for specific allergies.

"RBRVS," see resource based relative value scale.

(("RVU," see relative value unit.))

"RBRVS RVU" - A measure of the resources required to perform an individual service or intervention. It is set by medicare based on three components - Physician work, practice cost, and malpractice expense. Practice cost varies depending on the place of service.

"Reimbursement" ((means)) - Payment to a provider or other ((department-approved)) agency-approved entity who bills according to the provisions in WAC ((388-502-0100)) 182-502-0100.

"Reimbursement steering committee (RSC)" ((means)) - An interagency work group that establishes and maintains RBRVS physician fee schedules and other payment and purchasing systems utilized by the ((health care authority, the department,)) agency and the department of labor and industries.

"Relative value guide (RVG)" ((means)) - A system used by the American Society of Anesthesiologists for determining base anesthesia units (BAUs).

"Relative value unit (RVU)" ((means)) - A unit which is based on the resources required to perform an individual service or intervention.

"Resource based relative value scale (RBRVS)" ((means)) - A scale that measures the relative value of a medical service or intervention, based on the amount of physician resources involved.

(("RBRVS RVU" means a measure of the resources required to perform an individual service or intervention. It is set by medicare based on three components - physician work, practice cost, and malpractice expense. Practice cost varies depending on the place of service.))

"RSC RVU" ((means)) - A unit established by the RSC for a procedure that does not have an established RBRVS RVU or has an RBRVS RVU deemed by the RSC as not appropriate for the service.

"RVU," see relative value unit.

"Stat laboratory charges" ((means)) - Charges by a laboratory for performing tests immediately. "Stat" is an abbreviation for the Latin word "statim," meaning immediately.

"Sterile tray" ((means)) - A tray containing instruments and supplies needed for certain surgical procedures normally done in an office setting. For reimbursement purposes, tray components are considered by ((HCFA)) CMS to be nonroutine and reimbursed separately.

"Technical advisory group (TAG)" ((means)) - An advisory group with representatives from professional organizations whose members are affected by implementation of RBRVS physician fee schedules and other payment and purchasing systems utilized by the ((health care authority, the department,)) agency and the department of labor and industries.

"Technical component" ((means)) - The part of a procedure or service that relates to the equipment set-up and technician's time, or the part of the procedure and service reimbursement that recognizes the equipment cost and technician time.

[11-14-075, recodified as 182-531-0050, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090. 10-19-057, 388-531-0050, filed 9/14/10, effective 10/15/10. Statutory Authority: RCW 74.08.090 and 74.09.500. 04-20-059, 388-531-0050, filed 10/1/04, effective 11/1/04. Statutory Authority: RCW 74.04.050, 74.04.057, 74.08.090, and Public Law 104-191. 03-19-081, 388-531-0050, filed 9/12/03, effective 10/13/03. Statutory Authority: RCW 74.08.090. 03-06-049, 388-531-0050, filed 2/28/03, effective 3/31/03. Statutory Authority: RCW 74.08.090, 74.09.520. 01-01-012, 388-531-0050, filed 12/6/00, effective 1/6/01.]

WAC 182-531-1625   Outpatient hemophilia treatment requirements -- Center of excellence.   A hemophilia treatment center of excellence (COE) uses a comprehensive care model to provide care for persons with bleeding disorders. The comprehensive care model includes specialized prevention, diagnostic, and treatment programs designed to provide family-centered education, state-of-the-art treatment, research, and support services for individuals and families living with bleeding disorders.

(1) The agency pays only qualified hemophilia treatment COEs for providing outpatient hemophilia and von Willebrand related products and supplies to eligible agency clients.

(2) To become a qualified hemophilia treatment COE, a hemophilia center must meet all of the following:

(a) Have a current core provider agreement in accordance with WAC 182-502-0005;

(b) Be a federally approved hemophilia treatment center (HTC) as defined in WAC 182-531-0050 and meet or exceed all Medical and Scientific Advisory Council (MASAC) standards of care and delivery of services;

(c) Participate in the public health service 340B provider drug discount program and be listed in the medicaid exclusion files maintained by the federal Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA);

(d) Submit a written request to the agency to be a qualified hemophilia treatment center of excellence and include proof of the following:

(i) U.S. Center for Disease Control (CDC) and prevention surveillance site identification number; and

(ii) Listing in the hemophilia treatment center (HTC) directory.

(e) Receive written approval including conditions of payment and billing procedures from the agency.

(3) To continue as a qualified hemophilia treatment COE, the HTC must annually submit to the agency:

(a) Copies of grant documents and reports submitted to the maternal and child health bureau/human resources and services administration/department of health and human services or to their designated subcontractors; and

(b) Proof of continued federal funding by the National Hemophilia Program and listing with the regional hemophilia network and the CDC.

(4) Services rendered by a hemophilia treatment COE may be subject to the agency's limitations and authorization requirements.


Washington State Code Reviser's Office