WSR 15-06-064
(Washington Apple Health)
[Filed March 4, 2015, 9:44 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 15-01-146.
Title of Rule and Other Identifying Information: WAC 182-550-3830 Adjustments to inpatient rates.
Hearing Location(s): Health Care Authority (HCA), Cherry Street Plaza Building, Pear Conference Room, CSP 107, 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 April 21, 2015, at 10:00 a.m.
Date of Intended Adoption: Not sooner than April 22, 2015.
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 April 21, 2015.
Assistance for Persons with Disabilities: Contact Kelly Richters by April 13, 2015, TTY (800) 848-5429 or (360) 725-1307 or e-mail
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: To improve clarity of the agency's disproportionate share hospital criteria.
Reasons Supporting Proposal: The new language would clarify how in-state hospitals qualify for rate enhancement.
Statutory Authority for Adoption: RCW 41.05.021, 41.05.160.
Statute Being Implemented: RCW 41.05.021, 41.05160 [41.05.160].
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: HCA, governmental.
Name of Agency Personnel Responsible for Drafting: Melinda Froud, P.O. Box 42716, Olympia, WA 98504-2716, (360) 725-1408; Implementation and Enforcement: Tracy Sayre, P.O. Box 45500, Olympia, WA 98504-5500, (360) 725-1835.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The joint administrative [rules] review committee has not requested the filing of a small business economic impact statement, and these rules do not impose a disproportionate cost impact on small business.
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.
March 4, 2015
Jason R. P. Crabbe
Rules Coordinator
AMENDATORY SECTION (Amending WSR 14-22-003, filed 10/22/14, effective 11/22/14)
WAC 182-550-3830 Adjustments to inpatient rates.
(1) The medicaid agency updates all the following components of a hospital's specific diagnosis-related group (DRG) factor and per diem rates between rebasing periods:
(a) Effective July 1st of each year, the agency updates all of the following:
(i) Wage index adjustment;
(ii) Direct graduate medical education (DGME); and
(iii) Indirect medical education (IME).
(b) Effective January 1, 2015, the agency updates the sole community hospital adjustment.
(2) The agency does not update the statewide average DRG factor between rebasing periods, except:
(a) To satisfy the budget neutrality conditions in WAC 182-550-3850; and
(b) When directed by the legislature.
(3) The agency updates the wage index to reflect current labor costs in the core-based statistical area (CBSA) where a hospital is located. The agency:
(a) Determines the labor portion by multiplying the base factor or rate by the labor factor established by medicare; then
(b) Multiplies the amount in (a) of this subsection by the most recent wage index information published by the Centers for Medicare and Medicaid Services (CMS) when the rates are set; then
(c) Adds the nonlabor portion of the base rate to the amount in (b) of this subsection to produce a hospital-specific wage adjusted factor.
(4) DGME. The agency obtains DGME information from the hospital's most recently filed medicare cost report that is available in the CMS health care cost report information system (HCRIS) dataset.
(a) The hospital's medicare cost report must cover a period of twelve consecutive months in its medicare cost report year.
(b) If a hospital's medicare cost report is not available on HCRIS, the agency may use the CMS Form 2552-10 to calculate DGME.
(c) ((In the case where)) If a hospital has not submitted a CMS medicare cost report in more than eighteen months from the end of the hospital's cost reporting period, the agency considers the current DGME costs to be zero.
(d) The agency calculates the hospital-specific DGME by dividing the DGME cost reported on worksheet B, part 1 of the CMS cost report by the adjusted total costs from the CMS cost report.
(5) IME. The agency sets the IME adjustment equal to the "IME adjustment factor for Operating PPS" available in the most recent CMS final rule impact file ((available)) on CMS's web site as of May 1st of the rate-setting year.
(6)(a) Effective January 1, 2015, the agency multiplies the hospital's specific conversion factor and per diem rates by 1.25 if the hospital meets the ((agency's sole community hospital)) criteria in this subsection.
(b) The agency considers an in-state hospital to ((be a sole community hospital)) qualify for the rate enhancement if all of the following conditions apply. The hospital must:
(i) Be certified by CMS as a sole community hospital as of January 1, 2013((.));
(ii) Have a level III adult trauma service designation from the department of health as of January 1, 2014((.));
(iii) Have less than one hundred fifty acute care licensed beds in fiscal year 2011((.)); and
(iv) Be owned and operated by the state or a political subdivision.
(v) Not ((qualify for)) participate in the certified public expenditures (CPE) payment program defined in WAC 182-550-4650.