BEFORE THE DEPARTMENT OF PUBLIC

HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

 

In the matter of the amendment of ARM 37.86.2801, 37.86.2803, 37.86.2806, 37.86.2820, 37.86.2901, 37.86.2902, 37.86.2903, 37.86.2904, 37.86.2905, 37.86.2907, 37.86.2912, 37.86.2916, 37.86.2918, 37.86.2920, 37.86.2921, 37.86.2925, 37.86.2928, and 37.86.2947 and repeal of ARM 37.86.2810 and 37.86.2910 pertaining to Medicaid inpatient and outpatient hospital services

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND REPEAL

 

TO:  All Concerned Persons

 

            1.  On May 19, 2010, at 1:30 p.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed amendment and repeal of the above-stated rules.

 

            2.  The Department of Public Health and Human Services will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice.  If you require an accommodation, contact Department of Public Health and Human Services no later than 5:00 p.m. on May 10, 2010, to advise us of the nature of the accommodation that you need.  Please contact Rhonda Lesofski, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; telephone (406) 444-4094; fax (406) 444-9744; or e-mail dphhslegal@mt.gov.

 

            3.  The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

            37.86.2801  ALL HOSPITAL REIMBURSEMENT, GENERAL

            (1)  Reimbursement for inpatient hospital services is set forth in ARM 37.86.2806, 37.86.2905, 37.86.2907, 37.86.2910, 37.86.2912, 37.86.2916, 37.86.2918, 37.86.2920, 37.86.2924, 37.86.2925, 37.86.2928, 37.86.2943, and 37.86.2947.  Reimbursement for outpatient hospital services is set forth in ARM 37.86.3005, 37.86.3006, 37.86.3007, 37.86.3009, 37.86.3014, 37.86.3016, 37.86.3018, 37.86.3020, 37.86.3022, 37.86.3025, 37.86.3037, and 37.86.3109.  Cost of hospital services will be determined for inpatient and outpatient care separately.  Administratively necessary days are not a benefit of the Montana Medicaid program.

            (2)  The department may require providers of inpatient or outpatient hospital services to obtain authorization from the department or its designated review organization either prior to provision of services, prior to admission, or prior to payment.

            (3)  Medicaid reimbursement shall not be made or shall be reduced unless the provider has obtained authorization from the department or its designated review organization prior to providing any of the following services:

            (a)  inpatient psychiatric services provided in an acute care psychiatric hospital, acute care general hospital or a distinct part psychiatric unit of an acute care general hospital, and outpatient partial hospitalization as required by ARM 37.88.101;:

            (i)  if prior authorization is not obtained, the claim will be denied;

            (ii)  Medicare crossover claims do not need prior authorization; and

            (iii)  third party liability claims must be prior authorized.

            (b)  except as provided in (4) all inpatient services provided in preferred hospitals located more than 100 miles outside the borders of the state of Montana;

            (c) (b)  services related to organ transplantations covered under ARM 37.86.4701 and 37.86.4705; or:

            (i)  if prior authorization is not obtained, the claim will be denied;

            (ii)  Medicare crossover claims must be prior authorized; and

            (iii)  third party liability claims must be prior authorized.

            (d)  outpatient partial hospitalization, as required by ARM 37.88.101.

            (e) (c)  any other services for specific diagnosis or procedures that require all Medicaid providers to obtain prior authorization; or:

            (i)  if prior authorization is not obtained, the claim will be denied;

            (ii)  Medicare crossover claims must be prior authorized; and

            (iii)  third party liability claims must be prior authorized.

            (f) (d)  inpatient services in facilities designated as a Center of Excellence. and all out-of-state facilities:

            (i)  if prior authorization is not obtained, reimbursement of the inpatient claim will be 50% of the amount calculated in (1); except in claims subject to (3)(a), (b), and (c) will be denied;

            (ii)  Medicare inpatient crossover claims do not need prior authorization except claims subject to (3)(b) and (c); and

            (iii)  inpatient third party liability claims must be prior authorized:

            (A)  if prior authorization is not obtained, reimbursement of the inpatient third party liability claim will be 50% of the amount calculated in (1); except claims subject to (3)(a), (b), and (c) will be denied.

            (4)  Upon the request, of a preferred hospital, the department may grant retroactive authorization for the provision of the hospital's services under the following circumstances only when:

            (a) remains the same.

            (b)  the hospital is retroactively enrolled as a Montana Medicaid provider, and the enrollment includes the dates of service for which authorization is requested;

            (c) (b)  the hospital can document that at the time of admission it did not know, or have any basis to assume, that the patient client was a Montana Medicaid client eligible; or

            (d) (c)  the hospital can document that the admission was an emergency admit medically necessary for purposes of emergency stabilization or stabilization for transfer;.  The hospital must call for authorization within two working days (Monday through Friday) of the admission. 

            (d)  interim claims in a PPS hospital equal to or greater than 30 days of continuous inpatient services at the same facility; or

            (e)  the hospital is retroactively enrolled as a Montana Medicaid provider, and the enrollment includes the dates of service for which authorization is requested provided the hospital's retroactive enrollment is completed allowing time for the hospital to obtain prior authorization and to submit a clean claim within timely filing deadlines in accordance with ARM 37.85.406.

            (5)  For purposes of (4)(a), (b), and (c) the hospital must call for authorization within three working days (Monday through Friday) of the admission or the date it gained knowledge of the client's Medicaid eligibility and must meet the requirements for timely filing as specified in ARM 37.85.406:

            (a)  the basis for the request must be documented in the client's hospital record; and

            (b)  providers seeking retroactive authorization for adult mental health claims must submit their requests in writing.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA

 

            37.86.2803  ALL HOSPITAL REIMBURSEMENT, COST REPORTING

            (1)  Allowable costs will be determined in accordance with generally accepted accounting principles as defined by the American Institute of Certified Public Accountants.  Such definition of allowable costs is further defined in accordance with the Medicare Provider Reimbursement Manual, CMS Publication 15 Transmittal 17 21 last updated May 2007 January 2010, subject to the exceptions and limitations provided in the department's administrative rules.  The department adopts and incorporates by reference Pub. 15, which is a manual published by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), which provides guidelines and policies to implement Medicare regulations which set forth principles for determining the reasonable cost of provider services furnished under the Health Insurance for Aged Act of 1965, as amended.  A copy of Pub. 15 may be obtained through the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT  59620-2951.

            (a)  For cost report periods ending on or after July 1, 2003, for each hospital which is not a sole community hospital, critical access hospital or exempt hospital as defined in ARM 37.86.2901, reimbursement for reasonable costs of outpatient hospital services, other than the capital-related costs of such services, shall be limited to allowable costs, as determined in accordance with (1).

            (b)  For cost report periods ending on or after July 1, 2003, for each hospital which is a sole community hospital, as defined in ARM 37.86.2901, reimbursement for reasonable costs of outpatient hospital services, other than the capital-related costs of such services, shall be limited to allowable costs, as determined in accordance with (1).

            (c) (a)  For cost report periods ending on or after January 1, 2006, for each hospital which is a critical access or exempt hospital, as defined in ARM 37.86.2901, reimbursement for reasonable costs of inpatient and outpatient hospital services shall be limited to 101% of allowable costs, as determined in accordance with (1).

            (d)  For cost report periods ending on or after January 1, 2007 through September 30, 2008, for each hospital which is a preferred out-of-state hospital, as defined in ARM 37.86.2901, reimbursement for reasonable costs of inpatient hospital services shall be limited to 100% of allowable costs, as determined in

            (2)  All hospitals reimbursed under ARM 37.86.2806, 37.86.2905, 37.86.2907, 37.86.2910, 37.86.2912, 37.86.2916, 37.86.2918, 37.86.2920, 37.86.2924, 37.86.2925, 37.86.2928, 37.86.2943, 37.86.2947, 37.86.3005, 37.86.3006, 37.86.3007, 37.86.3009, 37.86.3014, 37.86.3016, 37.86.3018, 37.86.3020, 37.86.3022, 37.86.3025, 37.86.3037, or 37.86.3109 must submit, as provided in (3), an annual Medicare cost report in which costs have been allocated to the Medicaid program as they relate to charges.  The facility shall maintain appropriate accounting records which will enable the facility to fully complete the cost report.

            (3)  All hospitals reimbursed under ARM 37.86.2806, 37.86.2905, 37.86.2907, 37.86.2910, 37.86.2912, 37.86.2916, 37.86.2918, 37.86.2920, 37.86.2924, 37.86.2925, 37.86.2928, 37.86.2943, 37.86.2947, 37.86.3005, 37.86.3006, 37.86.3007, 37.86.3009, 37.86.3014, 37.86.3016, 37.86.3018, 37.86.3020, 37.86.3022, 37.86.3025, 37.86.3037, or 37.86.3109 or must file the cost report with the Montana Medicare intermediary and the department on or before the last day of the fifth calendar month following the close of the period covered by the report.  For fiscal periods ending on a day other than the last day of the month, cost reports are due 150 days after the last day of the cost reporting period.

            (a)  Extensions of the due date for filing a cost report may be granted by the intermediary only when a provider's operations are significantly adversely affected due to extraordinary circumstances over which the provider has no control, such as flood or fire.

            (b)  In the event a provider does not file a cost report within the time limit or files an incomplete cost report, the provider's total reimbursement will be withheld.  All amounts so withheld will be payable to the provider upon submission of a complete and accurate cost report.

            (4)  For distinct part rehabilitation units identified in ARM 37.86.2901 and 37.86.2916, the base year is the facility's cost report for the first cost reporting period ending after June 30, 1985 that both covers 12 months and includes Montana Medicaid inpatient hospital costs.  Exceptions will be granted only as permitted by the applicable provisions of 42 CFR 413.30 or 413.40 (2002).

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-149, MCA

 

            37.86.2806  COST-BASED HOSPITAL, GENERAL REIMBURSEMENT 

            (1)  Cost-based reimbursement shall be applied as follows: is applicable to exempt hospitals, preferred out-of-state hospitals with dates of admission from January 1, 2007 through September 30, 2008, and critical access hospitals (CAH).

            (2) (a)  Exempt hospitals, preferred out-of-state hospitals, and Critical access hospital (CAH) interim reimbursement is based on a hospital specific Medicaid inpatient cost-to-charge ratio (CCR), not to exceed 100%.

            (3) (b)  CAH and exempt hospital final reimbursement is for reasonable costs of hospital services limited to 101% of allowable costs, as determined in accordance with ARM 37.86.2803(1).

            (a)  Preferred out-of-state hospital final reimbursement is for reasonable costs of hospital services limited to 100% of allowable costs, as determined in accordance with ARM 37.86.2803(1).  Preferred hospitals are reimbursed on a cost basis for dates of admission from January 1, 2007 until September 30, 2008.

            (4) and (5) remain the same but are renumbered (2) and (3).

            (6) (4)  Certified registered nurse anesthetist (CRNA) reimbursement for exempt and CAHs hospitals is as determined in accordance with ARM 37.86.2924.

            (5)  Cost-based hospitals may be eligible to receive a disproportionate share hospital (DSH) payment in accordance with ARM 37.86.2925.

            (7) remains the same but is renumbered (6).

            (7)  Cost-based hospital claims for clients with partial eligibility shall be billed from the first date of Medicaid eligibility.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-113, MCA

 

            37.86.2820  DESK REVIEWS, OVERPAYMENTS, AND UNDERPAYMENTS

            (1) remains the same.

            (2)  For cost reporting purposes where the department finds that an overpayment has occurred, the department will notify the provider of the overpayment.

            (a)  The provider will have 60 days from the date of the initial notification to repay the amount of the overpayment or to have an agreed upon repayment schedule.  If the provider does not repay the whole overpayment within 60 days or defaults on a payment schedule, the department will make deductions from withhold any future payments the state of Montana makes to the provider.  Recovery will be undertaken even though the provider disputes in whole or part the department's determination of the overpayment and requests a fair hearing.

            (b) through (4) remain the same.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2901  INPATIENT HOSPITAL SERVICES, DEFINITIONS  (1) through (1)(b) remain the same.

            (2)  "Administratively necessary days" or "inappropriate level of care services" means those services for which alternative placement of a patient client is planned and/or effected and for which there is no medical necessity for acute level inpatient hospital care.

            (3)  "All patient refined diagnosis related groups (APR-DRGs)" means DRGs that classify each inpatient case based on claim information such as diagnosis, procedures performed, patient client age, patient client sex, and discharge status.

            (4)  "Bad debt" means inpatient and outpatient hospital services provided in which full payment is not received from the patient client or from a third party payor, for which the provider expected payment and the persons are unable or unwilling to pay their bill.  Bad debts may be for services provided to patients clients who have no health insurance or patients clients who are underinsured and are net of payments (the amount that remains after payment) made toward these services.  For the purpose of uncompensated care, bad debt is measured on the basis of revenue forgone, at full established rates, and bad debt does not include either provider discounts or Medicare bad debt.

            (5) and (6) remain the same.

            (7)  "Capital related cost" means a cost incurred in the purchase of land, buildings, construction, and equipment as provided in 42 CFR 413.130.

            (7) (8)  "Center of Excellence" means a hospital specifically designated by the department as being able to provide a higher level multi-specialty of comprehensive care that is not available elsewhere and meets the criteria in ARM 37.86.2947(3).

            (8) (9)  "Charity care" means inpatient and outpatient hospital services in which hospital policies determine the patient client is unable to pay and the hospital did not expect to receive full reimbursement.  Charity care results from a provider's policy to provide health care services free of charge (or where only partial payment is expected) to individuals who meet certain financial criteria.  For the purpose of uncompensated care, charity care is measured on the basis of revenue forgone, at full established rates.  Charity care does not include contractual write-offs.

            (10)  "Clinical trials" means trials that are directly funded or supported by centers or cooperating groups funded by the National Institutes of Health (NIH), Center for Disease Control (CDC), Agency for Healthcare Research and Quality (AHRQ), Center for Medicare and Medicaid Services (CMS), Department of Defense (DOD), or the Veterans Administration (VA).

            (9) (11)  "Cost-based hospital" means a licensed acute care hospital that is reimbursed on the basis of allowable costs.

            (10) (12)  "Cost outlier" means an additional payment for unusually high cost cases that exceeds the cost outlier thresholds as set forth in ARM 37.86.2916.

            (11) remains the same but is renumbered (13).

            (12) (14)  "Direct nursing care" means the care given directly to the patient client which requires the skills and expertise of an RN or LPN.

            (13) (15)  "Discharging hospital" means a hospital, other than a transferring hospital, that formally discharges an inpatient.  Release of a patient client to another hospital, as described in (31) (39) or a leave of absence from the hospital will not be recognized as a discharge.  A patient client who dies in the hospital is considered a discharge.

            (16)  "Disproportionate share hospital" means a hospital serving a disproportionate share of low income clients as defined in section 1923 of the Social Security Act.

            (17)  "Disproportionate share hospital specific uncompensated care" means the costs of inpatient and outpatient hospital services provided to clients who have no health insurance or source of third party coverage.

            (14) remains the same but is renumbered (18).

            (15) (19)  "Distinct part rehabilitation unit" means a rehabilitation unit of an acute care general hospital that meets the requirements in 42 CFR 412.25 and 412.29 (1992).

            (20)  "Experimental/investigational service" means a noncovered item or procedure considered experimental and/or investigational by the U.S. Department of Health and Human Services or any other appropriate federal agency.

            (16)  "Exempt hospital" means, for purposes of determining whether a hospital is exempt from the prospective payment system under ARM 37.86.2905, an acute care hospital that is located in a Montana county designated on or before July 1, 1991 as continuum code 8 or continuum code 9 by the United States Department of Agriculture under its rural-urban continuum codes for metro and nonmetro counties.

            (17) remains the same but is renumbered (21).

            (18) (22)  "Hospital resident" means a recipient client who is unable to be cared for in a setting other than the acute care hospital as provided in ARM 37.86.2921.

            (19) (23)  "Inpatient" means a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services.  A person generally is considered an inpatient if formally admitted as an inpatient with an expectation that the patient client will remain more than 24 hours.  The physician or other practitioner is responsible for deciding whether the patient client should be admitted as an inpatient.  Inpatient hospital admissions are subject to retrospective review by the Medicaid peer review organization (PRO) department or the department's designated review organization to determine whether the inpatient admission was medically necessary for Medicaid payment purposes.

            (20) (24)  "Inpatient hospital services" means services that are ordinarily furnished in an acute care hospital for the care and treatment of an inpatient under the direction of a physician, dentist, or other practitioner as permitted by federal law, and that are furnished in an institution that:

            (a)  is maintained primarily for the care and treatment of patients with disorders other than:

            (i)  tuberculosis; or

            (ii)  mental diseases, except as provided in (19)(d);

            (b) (a)  is licensed or formally approved as an acute care hospital by the officially designated authority in the state where the institution is located;

            (c) (b)  except as otherwise permitted by federal law, meets the requirements for participation in Medicare as a hospital and has in effect a utilization review plan that meets the requirements of 42 CFR 482.30; or

            (d) (c)  provides inpatient psychiatric hospital services for individuals under age 21 pursuant to ARM Title 37, chapter 88, subchapter 11 37.88.1410.

            (25)  "Interim claim" in a prospective payment system (PPS) hospital means a claim being billed for an inpatient hospital stay equal to or exceeding 30 days at the same facility as referenced in ARM 37.86.2905.

            (21) through (23) remain the same but are renumbered (26) through (28).

            (29)  "Out-of-state hospital" means a hospital located more than 100 miles beyond the Montana state border.

            (24)  "Preferred out-of-state hospital" means a hospital located more than 100 miles outside the borders of Montana that has signed a contract with the department to provide specialized services prior approved by the department.  The classification of preferred out-of-state hospital is eliminated effective September 30, 2008.

            (30)  "Partial eligibility" means a client that is only eligible for Medicaid benefits during a portion of the inpatient hospital stay as specified in ARM 37.86.2918.

            (31)  "Prior authorization (PA)" means  the approval process required before certain services are paid by Medicaid.  Prior authorization must be obtained before providing the service.

            (25) (32)  "Prospective payment system (PPS) hospital" means a hospital reimbursed pursuant to the diagnosis related group (DRG) system.  DRG hospitals are classified as such by the Centers for Medicare and Medicaid Services (CMS) in accordance with 42 CFR part 412 (2008).

            (26)  "Qualified rate adjustment payment" (QRA) means an additional payment as provided in ARM 37.86.2910 to a county owned, county operated, or partially county funded rural hospital in Montana where the hospital's most recently reported costs are greater than the reimbursement received from Montana Medicaid for inpatient care.

            (27) through (29) remain the same but are renumbered (33) through (35).        (30) (36)  "Sole community hospital" means a DRG reimbursed hospital classified as such by the Centers for Medicare and Medicaid Services (CMS) in accordance with 42 CFR 412.92(a) through (d) and/or hospitals with less than 51 beds.

            (31) remains the same but is renumbered (37).

            (38)  "Third party liability (TPL)" means any entity that is, or may be, liable to pay all or part of the medical cost of care for a Medicaid eligible client.

            (32) (39)  "Transferring hospital" means a hospital that formally releases an inpatient client to another inpatient hospital or inpatient unit of a hospital.

            (40)  "Transplant" means to transfer either tissue or an organ from one body or body part to another as referenced in ARM 37.86.4701.  A transplant may be either:

            (a)  "organ transplantation", the implantation of a living, viable, and functioning human organ for the purpose of maintaining all or a major part of that organ function in the client; or

            (b)  "tissue transplantation", the implantation of living, human tissue.

            (33) (41)  "Uncompensated care" means hospital services provided in which no payment is received from the patient client or from a third party payor.  Uncompensated care includes charity care and bad debts.

            (34) remains the same but is renumbered (42).

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, 53-6-149, MCA

 

            37.86.2902  INPATIENT HOSPITAL SERVICES, REQUIREMENTS

            (1) and (2) remain the same.

            (3)  Inpatient hospital services include:

            (a) through (e) remain the same.

            (f)  other diagnostic or therapeutic items, or services provided in the hospital and not specifically excluded in ARM 37.85.207; and

            (g) remains the same.

            (4)  Clinical trials are limited to:

            (a)  Medicaid coverage of routine costs plus reasonable and necessary items and services used to diagnose and treat complications arising from participation in all qualifying clinical trials;

            (b)  trials that are directly funded or supported by centers or cooperating groups funded by the National Institutes of Health (NIH), Center for Disease Control (CDC), Agency for Healthcare Research and Quality (AHRQ), Department of Defense (DOD), or the Veterans Administration (VA); and

            (c)  clinical trial drugs, devices, and procedures are not reimbursable.

            (4) (5)  Alcohol and drug detoxification services are limited to:

            (a)  detoxification services up to four seven days, except that more than four seven days may be covered if concurrently authorized by the department or the department's designated review organization and a hospital setting is required; or

            (b)  the department or the department's designated review organization determines that the patient client has a concomitant condition that must be treated in the inpatient hospital setting, and the alcohol and drug treatment is a necessary adjunct to the treatment of the concomitant condition.

            (5) remains the same but is renumbered (6).

            (6) (7)  Inpatient hospital providers must comply with the applicable portions of conditions of participation for hospitals as authorized in 42 CFR 482.

            (7) (8)  Acute care psychiatric hospitals must comply with 42 CFR 440.160, 42 CFR 441 subpart D, and the applicable portions of conditions of participation for hospitals as authorized in 42 CFR 482.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA

 

            37.86.2903  INPATIENT HOSPITAL SERVICES, EXCLUSIONS

(1)  Inpatient hospital services do not include:

            (a) remains the same.

            (b)  experimental or investigational services, clinical trials such as, the use of off-label drugs where this usage is not a national standard of practice, or non-FDA approved use of drugs, biologicals, and devices;

            (c) and (d) remain the same.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, MCA

 

            37.86.2904  INPATIENT HOSPITAL SERVICES, BILLING REQUIREMENTS

            (1) through (6) remain the same.

            (7)  Medical records must be received within 30 days of request by the department or the department's designated review organization.

            (a)  Claims may be denied if the receipt of the medical records exceeds the designated time period.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2905  INPATIENT HOSPITAL SERVICES, GENERAL REIMBURSEMENT  (1) remains the same.

            (2)  Interim reimbursement for cost-based facilities, including exempt facilities and CAH facilities, is based on a hospital specific Medicaid inpatient cost-to-charge ratio, not to exceed 100%.  Cost-based facilities will be reimbursed their allowable costs as determined according to ARM 37.86.2803.  Final cost settlements for CAH facilities will be reimbursed at 101% of allowable costs.

            (3)  Except as otherwise specified in these rules, facilities reimbursed under the APR-DRG prospective payment system may be reimbursed, in addition to the prospective APR-DRG rate, for the following:

            (a) remains the same.

            (b)  readmissions, partial eligibility, and transfers, as set forth in ARM 37.86.2918;

            (c) remains the same.

            (d)  disproportionate share hospital payments as provided in ARM 37.86.2925; and

            (e)  qualified rate adjustor payments, as set forth in ARM 37.86.2910; and

            (f) remains the same but is renumbered (e).

            (4)  PPS facilities may interim bill for stays equal to or exceeding 30 days at the same hospital.

            (a) and (b) remain the same.

            (c)  The hospital must obtain authorization to interim bill prior to submission of the first claim and must provide medical records upon request of the department or the department's its designated review organization for continued stay reviews.

            (5) and (6) remain the same.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA

 

            37.86.2907  INPATIENT HOSPITAL PROSPECTIVE REIMBURSEMENT, APR-DRG PAYMENT RATE DETERMINATION  (1)  The department's APR-DRG prospective payment rate for inpatient hospital services is based on the classification of inpatient hospital discharges to APR-DRGs.  The procedure for determining the APR-DRG prospective payment rate is as follows:

            (a)  Effective October July 1st of each year, the department will assign an APR-DRG to each Medicaid patient client discharge in accordance with the current APR-grouper program version, as developed by 3M Health Information Systems.  The assignment of each APR-DRG is based on:

            (i) through (b) remain the same.

            (c)  The department computes a Montana average base price per case.  This base price includes in-state and out-of-state distinct part rehabilitation units and long term care (LTC) facilities.  Effective July 1, 2009 July 1, 2010 the average base price, including capital expenses, is $4,235.  Disproportionate share payments are not included in this price.

            (i)  The average base price for Center of Excellence hospitals, including capital expenses, is $7,024.  Disproportionate share payments are not included in this price.

            (ii)  The average base for distinct part rehabilitation units and long term care hospitals (LTCH), including capital expenses, is $9,092.  Disproportionate share payments are not included in this price.

            (d)  The relative weight for the assigned APR-DRG is multiplied by the average base price per case to compute the APR-DRG prospective payment rate for that Medicaid patient client discharge.

            (2)  The Montana Medicaid APR-DRG relative weight values, average national length of stay (ALOS), and outlier thresholds are contained in the APR-DRG Table of Weights and Thresholds (effective October 1, 2008 July 1, 2010) published by the department.  The department adopts and incorporates by reference the APR-DRG Table of Weights and Thresholds (effective October 1, 2008 July 1, 2010).  Copies may be obtained from the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2912  INPATIENT HOSPITAL PROSPECTIVE REIMBURSEMENT, CAPITAL-RELATED COSTS  (1)  The department will reimburse inpatient hospital service providers located in the state of Montana for capital-related costs that are allowable under Medicare cost reimbursement principles as set forth at 42 CFR 412.113(a), as amended through October 1, 2007.  The department adopts and incorporates by reference 42 CFR 412.113(a) and (b), as amended through October 1, 2007, which set forth Medicare cost reimbursement principles.  Copies of the cited regulation may be obtained from the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

            (2) remains the same but is renumbered (1).

            (3) (2)  The interim payment made to CAHs and exempt facilities is based on the hospital specific cost-to-charge ratio and includes capital costs.

            (3)  The department adopts and incorporates by reference 42 CFR 412.113(a) and (b), and will calculate as provided in (1) and (2) capital-related costs that are allowable under Medicare cost reimbursement principles as established in 42 CFR 412.113(a) and (b) (March 29, 1985).  Copies of the cited regulation may be obtained from the Department of Public Health and Human Services, Health Resources Division, 1400 Broadway, P.O. Box 202951, Helena, MT 59620-2951.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2916  INPATIENT HOSPITAL PROSPECTIVE REIMBURSEMENT, COST OUTLIERS  (1) remains the same.

            (2)  To receive payment for a cost outlier, the combined cost costs of the medically necessary days and services of the inpatient hospital stay, as determined by the department, must exceed the cost outlier threshold established by the department for the APR-DRG.

            (3)  The department determines the outlier reimbursement for cost outliers for all hospitals and distinct part units, entitled to receive cost outlier reimbursement, as follows:

            (a)  computing an estimated cost for the inpatient hospital stay by multiplying the allowed charges for the stay by the statewide average PPS cost-to-charge ratio as set forth in ARM 37.86.2905;

            (b) and (c) remain the same.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2918  INPATIENT HOSPITAL, READMISSIONS, PARTIAL ELIGIBILITY, OUTPATIENT BUNDLING, AND TRANSFERS FOR PROSPECTIVE PAYMENT SYSTEM (PPS) FACILITIES  (1)  This rule states the billing requirements applicable to inpatient hospital readmissions, partial eligibility, outpatient bundling, and transfers.  Sections (2), (3), and (4) apply to PPS facilities unless otherwise noted.  Subsection (2)(d) applies to PPS facilities.

            (2) (1)  All readmissions occurring within 30 days will be subject to review to determine whether additional payment as a new APR-DRG or as an outlier is warranted.  As a result of the readmission review, the following payment changes will be made:

            (a)  If it is determined that complications have arisen because of premature discharge and/or other treatment errors, then the APR-DRG payment for the first admission must be altered by combining the two admissions into one for payment purposes; or.

            (b) remains the same.

            (c)  A patient client readmission occurring in an inpatient rehabilitation hospital or a rehabilitation distinct part unit three days prior to after the initial date of discharge must be combined into one admission for payment purposes, with the exception of discharge to an acute care hospital for surgical APR-DRGs.

            (d)  Inpatient readmissions within 24 hours of discharge must be combined if the same condition is diagnosed.

            (d) remains the same but is renumbered (e).

            (3) (2)  A transfer, for the purpose of this rule, is limited to those instances in which a patient client is transferred for continuation of medical treatment between two hospitals or distinct part units, one of which is paid under the Montana Medicaid prospective payment system.

            (a) through (b) remain the same. 

            (4) through (5)(b) remain the same but are renumbered (3) through (4)(b).

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2920  INPATIENT HOSPITAL PROSPECTIVE REIMBURSEMENT, HOSPITAL RESIDENTS  (1)  Payment for hospital residents will be made as follows:

            (a)  the hospital must request residency status from the department prior to submission of the first claim;

            (a) remains the same but is renumbered (b).

            (b) (c)  final payment for the first 180 days of inpatient care hospital stay will be paid the APR-DRG payment for the case as computed in ARM 37.86.2907 plus any appropriate outlier and add-on payments:;

            (i)  the hospital stay is from admit through the request for residency, if approved by the department; and

            (ii)  the length of stay must be greater than or equal to 180 days of inpatient care at the same facility.

            (c) (d)  final payment for all patient client care subsequent to the request date, which must be greater than 180 days will be reimbursed at 80% of the hospital specific estimated cost-to-charge ratio as computed by the department without cost settlement; and

            (d)  the hospital must obtain authorization to bill prior to submission of the first claim and must provide medical records upon request of the department or its designated review organization for continued stay reviews.

            (e)  the hospital must provide medical records upon request of the department or the department's designated review organization for continued stay reviews.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2921  HOSPITAL RESIDENCY STATUS REQUIREMENTS  (1)  A recipient who is unable to be cared for in a setting other than the acute care hospital is eligible for hospital residency status.

            (2) (1)  To obtain hospital residency status, the recipient client must meet the following requirements:

            (a)  a client who is unable to be cared for in a setting other than the acute care hospital is eligible for hospital residency status;

            (a) (b)  the recipient client must utilize a ventilator for a continuous period of not less than eight hours in a 24-hour period or require at least 10 ten hours of direct nursing care in a 24-hour period; and

            (b) (c)  the recipient client must have been an inpatient in an inpatient hospital the same hospital as the requesting hospital for a minimum of six continuous months.

            (3) (2)  The provider will have the responsibility of determining whether services could be provided in a skilled nursing care facility or by the home and community-based waiver program to a Medicaid recipient client within the state of Montana.

            (4) (3)  The provider shall maintain written records of inquiries and responses about the present and future availability of openings in nursing homes and the hHome and cCommunity-bBased w Waiver pProgram.

            (5) remains the same but is renumbered (4).

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-149, MCA

 

            37.86.2925  INPATIENT HOSPITAL REIMBURSEMENT, DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS  (1) through (1)(b) remain the same.

            (2)  Subject to federal approval and the availability of sufficient state special revenue, all supplemental disproportionate share hospitals shall receive a supplemental disproportionate share hospital payment.  In order to maintain access and quality in the most rural areas in Montana, critical access hospitals and exempt hospitals shall receive an increased portion of the available funding.  The supplemental disproportionate share hospital payment shall be calculated using the formula:  SDSH=(M/D)*P.

            (a)  For the purposes of the determining supplemental disproportionate share hospital payment amounts, the following definitions apply:

            (i) remains the same.

            (ii)  "M" represents the number of weighted Medicaid paid inpatient days provided by the hospital for which the payment amount is being calculated.

            (A)  For critical access hospitals and exempt hospitals, weighted Medicaid inpatient days shall equal the number of Medicaid inpatient days provided multiplied by 3.8.

            (B) through (4) remain the same.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2928  INPATIENT HOSPITAL REIMBURSEMENT, HOSPITAL REIMBURSEMENT ADJUSTOR  (1)  All hospitals meeting the eligibility requirements in ARM 37.86.2940 shall receive a hospital reimbursement adjustor (HRA) payment.  The payment consists of two separately calculated amounts.  In order to maintain access and quality in the most rural areas of Montana, critical access hospitals and exempt hospitals shall receive both components of the HRA.  All other hospitals shall receive only Part 1, as defined in (2)(a).  Eligibility for an HRA payment will be determined based on a hospital's year-end reimbursement status. 

            (2)  Part 1 of the HRA payment will be based upon Medicaid inpatient utilization, and will be computed as follows: HRA1 = (M ÷ D) x P.

            (a) through (iii) remain the same.

            (iv)  "P" equals the total amount to be paid via Part 1 of the HRA.  "P" consists of a state paid amount plus the applicable federal financial participation, (FFP).  The portion of "P" that is paid by the state will equal the amount of revenue generated by Montana's hospital utilization fee, less all of the following:

            (A) through (C) remain the same.

            (3)  Part 2 of the IRA payment will be based upon total hospital Medicaid charges, and will be computed as follows: HRA2 = (I ÷ D) x P.

            (a) through (iii) remain the same.

            (iv)  "P" equals the total amount to be paid via Part 2 of the HRA.  "P" will be 8% of the total revenue generated by Montana's hospital utilization fee plus applicable federal financial participation (FFP).

            (b) and (c) remain the same.

 

AUTH:  2-4-201, 53-2-201, 53-6-113, MCA

IMP:  2-4-201, 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-149, MCA

 

            37.86.2947  OUT-OF-STATE HOSPITAL AND CENTERS OF EXCELLENCE REIMBURSEMENT  (1)  Inpatient hospital services provided in border hospitals located more than 100 miles outside the borders of the state of Montana will be reimbursed as provided under the APR-DRG prospective payment system described in ARM 37.86.2905, 37.86.2907, 37.86.2912, 37.86.2916, 37.86.2918, and 37.86.2920.

            (2)  Medicaid reimbursement for inpatient services shall not be made to hospitals located more than 100 miles outside the borders of Montana or Centers of Excellence unless the provider has obtained authorization from the department or its designated review organization prior to providing services or prior to admission.  All inpatient services provided in an emergent situation must be authorized as described in ARM 37.86.2801(4)(d).

            (a) through (3)(b)(ii) remain the same.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            4.  The department proposes to repeal the following rules:

 

            37.86.2810  INPATIENT AND OUTPATIENT HOSPITAL SERVICES, QUALIFIED RATE ADJUSTMENT PAYMENT, ELIGIBILITY, AND COMPUTATION, is found on page 37-20435 of the Administrative Rules of Montana.

 

AUTH:  53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            37.86.2910  INPATIENT HOSPITAL REIMBURSEMENT, QUALIFIED RATE ADJUSTMENT PAYMENT, is found on page 37-20455 of the Administrative Rules of Montana.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            5.  The Department of Public Health and Human Services (the department) is proposing amendments to ARM 37.86.2801, 37.86.2803, 37.86.2806, 37.86.2820, 37.86.2901, 37.86.2902, 37.86.2903, 37.86.2904, 37.86.2905, 37.86.2907, 37.86.2912, 37.86.2916, 37.86.2918, 37.86.2920, 37.86.2921, 37.86.2925, 37.86.2928, and 37.86.2947 and repeal of ARM 37.86.2810 and 37.86.2910 pertaining to Medicaid inpatient and outpatient hospital services.

 

The purpose of the proposed rule amendments is to update the administrative rules governing inpatient hospital services with 42 CFR 447.272 and to interface these rules with the amendment to Montana's Medicaid inpatient hospital state plan (attachment 4.19A) which has been approved by the Centers for Medicare and Medicaid Services (CMS).

 

As part of the prospective payment system (PPS) providing reimbursement for inpatient hospital facilities, the department proposes to establish two base rates on or before July 1 of each year.  These two rates would include a Montana average base rate and an average base rate for hospitals meeting the criteria for Centers of Excellence as referenced in ARM 37.86.2907.  Therefore, the primary reason for amending the rules regarding inpatient services is to establish these base rates for the coming state fiscal year.

 

The department is proposing to eliminate the separate base rate for in-state and out-of-state distinct part rehabilitation units and long-term care (LTC) facilities.

The department feels that under the all patient refined diagnosis related groups (APR-DRG) reimbursement methodology, rehabilitation services would be appropriately reimbursed using the base rate described in ARM 37.86.2907(1)(c).  The current APR-DRG reimbursement methodology reflects relative costs more accurately and efficiently than the former diagnosis related group (DRG) payment system.

 

In regard to the qualified rate adjustment (QRA) payment as described in ARM 37.86.2810 and 37.86.2910, the department is proposing to repeal the language in both rules.  The department has not used the QRA reimbursement methodology within the past five years and, therefore, feels this language is obsolete.

 

In addition, all reference to "exempt" or "preferred hospitals" would be removed from the inpatient rules as the department no longer recognizes exempt or preferred hospital status.  Also removed is any reference to QRA payments, eligibility, or computation as the department no longer incorporates QRA payments into the reimbursement methodology for inpatient hospitals.

 

ARM 37.86.2901

 

The changes include updates to obsolete definitions and the addition of new definitions.

 

ARM 37.86.2801, 37.86.2803, 37.86.2902, 37.86.2912, 37.86.2920, and 37.86.2921

 

The proposed amendments are not only to provide clarity, but also to update the content to meet requirements set forth in the current Code of Federal Regulations (CFR) and Montana Medicaid state plan.

 

Throughout the proposed amendments, corrections have been made regarding grammar, punctuation, and language.  No change of substantive meaning is intended.

 

ARM 37.86.2810 and 37.86.2910

 

The department proposes repeal of these rules because they are obsolete.

 

Persons and Entities Affected

 

The proposed amendments will affect approximately 372 inpatient hospital providers both in and out-of-state.  The proposed amendments will not affect services provided to Medicaid clients.

 

Alternative Considered

 

The alternative to the proposed rule amendments would be to make no changes to the existing rules.  Leaving the existing rules unchanged would adversely affect providers in advising them of incorrect reimbursement (base) rates.

 

The department is not proposing an increase or decrease in base rates.  Therefore, the proposed amendments will have a neutral budgetary impact.

 

Fiscal Effects

 

The department expects the proposed amendments in this notice to have a budget neutral effect.  There is no impact to clients.

 

Estimated Financial/Budget Impacts

 

The department expects the proposed amendments in this notice to have a budget neutral effect.

 

As of April 19, 2010, the date this proposed rule amendment is filed with the Secretary of State, there is a projected Montana general fund budget deficit as that term is defined in 17-7-140(3), MCA for state fiscal year 2011.  The Governor has instructed the department and other agencies of state government to implement a general fund spending reduction plan.  As part of the department's spending reduction plan appropriated provider rate increases for state fiscal year 2011 will not be implemented.

 

            6.  The department intends the proposed rule changes to be applied effective July 1, 2010.

 

            7.  Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing.  Written data, views, or arguments may also be submitted to: Rhonda Lesofski, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail dphhslegal@mt.gov, and must be received no later than 5:00 p.m., May 28, 2010.

 

            8.  The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.

 

            9.  The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  Such written request may be mailed or delivered to the contact person in 7 above or may be made by completing a request form at any rules hearing held by the department.

 

            10.  An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

            11.  The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

 

 

 

/s/  John Koch                                                /s/  Anna Whiting Sorrell                              

Rule Reviewer                                               Anna Whiting Sorrell, Director

                                                                        Public Health and Human Services

           

Certified to the Secretary of State April 19, 2010.