Current through November 28, 2024
(a) The department
will use the following methodology and criteria in reviewing and establishing
prospective payment per-day and percentage-of-charges rates for the Medicaid
program:
(1) the department will consider the
following with the relative importance of each criterion being a matter of
department discretion:
(A) whether the costs
are related to patient care and are attributable to the Medicaid
program;
(B) whether the payment
rate is reasonably related to costs;
(2) the department will set annual rates
established for the facility's fiscal year;
(3) base years may be changed to more current
years and may be subject to audit; the department may determine the timing for
a re-basing under this paragraph and whether and when to conduct an
audit;
(4) for all facilities,
except facilities with rate agreements established under
7
AAC 150.190, the department
(A) will perform a re-basing for the first
fiscal year beginning after notification to the facilities that a re-basing
will be done;
(B) will perform a
re-basing no less than every four years;
(C) may perform a re-basing sooner than every
four years; and
(D) will not
consider the first cost-based rate a re-basing.
(b) The department will express the inpatient
hospital payment rate for general acute care hospitals not subject to Diagnosis
Related Groups (DRG) reimbursement under
7
AAC 150.250, specialty hospitals, and inpatient
psychiatric hospitals as a per-day rate. The per-day inpatient hospital payment
rate will be based on allowable costs calculated in (1) - (9) of this
subsection from the appropriate base year adjusted Medicare cost report, as
follows:
(1) the noncapital routine portion of
the prospective per-day rate is the base year's facility-specific Medicaid
noncapital routine average cost, calculated as follows, and updated to the
prospective year based on adjustment factors identified in
7
AAC 150.150:
(A) the
Medicaid cost of each reimbursable routine cost center is determined by
dividing the total noncapital costs in each reimbursable routine cost center by
the total patient days in that cost center and multiplying that quotient by the
allowable paid Medicaid patient days in that cost center;
(B) the sum of the Medicaid costs for each
reimbursable routine cost center is divided by the sum of the allowable paid
Medicaid patient days, resulting in the base year's facility-specific Medicaid
noncapital routine average cost;
(2) the routine capital portion of the
prospective per-day rate is the base year's facility-specific Medicaid
inpatient routine average capital cost, calculated as follows, and updated to
the prospective year based on adjustment factors identified in
7
AAC 150.150:
(A) the
Medicaid cost of each reimbursable capital cost center is determined by
dividing the total capital costs in each reimbursable routine cost center by
the total patient days in that cost center and multiplying that quotient by the
allowable paid Medicaid patient days in that cost center;
(B) the sum of the Medicaid costs for each
reimbursable routine capital cost center is divided by the sum of the allowable
paid Medicaid patient days, resulting in the base year's facility-specific
Medicaid routine average capital cost;
(3) the ancillary capital portion of the
prospective per-day payment rate is determined by calculating the percentage of
capital cost for each ancillary cost center, multiplying the percentage by the
related Medicaid patient ancillary costs from the base year adjusted Medicare
cost report, by cost center, and totaling the calculated capital costs from all
cost centers; the resulting total is divided by the sum of the Medicaid patient
days from the base year and updated to the prospective year based on adjustment
factors identified in
7
AAC 150.150;
(4) the noncapital ancillary portion of the
prospective per-day rate is the sum of Medicaid inpatient noncapital ancillary
costs from the base year divided by the facility's Medicaid patient days from
the base year; the resulting per-day inpatient noncapital ancillary cost is
updated to the prospective year based on adjustment factors identified in
7
AAC 150.150; total Medicaid inpatient ancillary costs
less the capital portion of the Medicaid inpatient ancillary costs as
determined in (3) of this subsection equals the total noncapital Medicaid
inpatient ancillary costs to be used for this portion of the rate;
(5) for purposes of this subsection, nursery
days constitute patient days and swing-bed days do not constitute patient
days;
(6) for purposes of this
subsection, the costs associated with swing-bed services, determined by
multiplying the number of swing-bed days by the swing-bed rate in effect in the
base year, are removed before calculating the acute care per-day
rate;
(7) for purposes of this
subsection, Medicaid patient days are
(A) the
covered days from the MR-0-14 report for routine noncapital and routine capital
costs; and
(B) facility-reported
Medicaid patient days for ancillary noncapital and ancillary capital costs;
after re-basing, the department may use either facility-reported Medicaid
patient days or covered days from the MR-0-14 report for ancillary noncapital
and capital costs;
(8)
for purposes of this subsection, and except for critical access hospitals
designated under
7
AAC 12.190, costs are the lower of
(A) Medicaid inpatient costs; the department
will calculate those costs as the sum of
(i)
Medicaid inpatient routine costs, obtained by dividing the number of Medicaid
inpatient days by the total number of hospital inpatient days, as those numbers
are given in the Medicare cost report and adjusted in accordance with
7
AAC 150.170 and
7
AAC 150.200, and by multiplying the resulting quotient
by the total hospital inpatient routine costs, as given in the adjusted
Medicare cost report; and
(ii)
Medicaid inpatient ancillary costs, obtained by multiplying for each cost
center the total Medicaid charges, as given in the adjusted Medicare cost
report, by the cost-to-charge ratio for that cost center, and by totaling the
resulting products for the aggregate amount of inpatient ancillary
costs;
(B) 100 percent of
charges in the aggregate to the general public; the department will calculate
those charges as the sum of the
(i) inpatient
routine charges to Medicaid patients, as reported in the MR-0-14 report;
and
(ii) inpatient charges for
ancillary services to Medicaid patients, as those charges are determined from
the adjusted Medicare cost report;
(9) for purposes of this subsection, if the
department determines that a provision in this chapter became effective after
the last adjustment under
7
AAC 150.150 and the provision may change the per-day
rate by a material amount, the department will apply the provision when the
per-day rate is updated to the prospective year by the adjustment factors in
7
AAC 150.150.
(c) The department will express outpatient
general acute care hospital payment rates not subject to Diagnosis Related
Groups (DRG) reimbursement under
7
AAC 150.250 as a percentage of charges calculated as
follows:
(1) each outpatient cost-to-charge
ratio by cost center from the adjusted Medicare cost report is multiplied by
the corresponding Medicaid outpatient charges to calculate the Medicaid
outpatient costs by cost center;
(2) the sum of Medicaid outpatient costs by
cost center is divided by the sum of Medicaid outpatient charges by cost center
to obtain the percentage rate;
(3)
the applicable outpatient cost-to-charge percentage may not exceed 100
percent;
(4) under this subsection,
the laboratory cost center is not included in the cost centers;
(5) for purposes of this subsection, if the
department determines that a provision in this chapter became effective after
the last adjustment under
7
AAC 150.150 and the provision may change the
outpatient rate by a material amount, the department will apply the provision
when the per-day rate established under (b) of this section is updated to the
prospective year by the adjustment factors in
7
AAC 150.150.
(d) The department will express outpatient
general acute care hospital payment rates for hospitals providing inpatient and
outpatient services only, and subject to Diagnosis Related Groups (DRG)
reimbursement under
7
AAC 150.250, as a percentage of charges, where the
outpatient cost-to-charge ratio is calculated in the same manner as set out in
(c) of this section.
(e) The
department will express outpatient general acute care hospital payment rates
for hospitals providing inpatient, outpatient, and long-term care services, and
subject to Diagnosis Related Groups (DRG) reimbursement under
7
AAC 150.250, as a percentage of charges, where the
outpatient cost-to-charge ratio is calculated in the same manner as set out in
(c) of this section.
(f) The
department will determine a rate of payment for a hospital outpatient
laboratory service based on reasonable costs as determined under
42 C.F.R.
405.515, adopted by reference in VAAC
160.900.
(g) The department will
express rates for long-term care facilities as a per-day rate calculated as
follows:
(1) the long-term care noncapital
routine portion of the prospective per-day rate is determined by adding
together the long-term care noncapital routine costs from the base year
adjusted Medicare cost report; the resulting total is divided by the sum of the
facility's long-term care patient days from the base year; the resulting
per-day noncapital routine cost is updated to the prospective year based on
adjustment factors identified in
7
AAC 150.150;
(2) the routine capital portion of the
prospective per-day rate is the long-term care routine capital costs from the
facility's base year adjusted Medicare cost report divided by the facility's
total long-term care patient days from the base year; for purposes of this
paragraph, the long-term care patient days are the greater of
(A) the total actual patient days;
or
(B) 85 percent of licensed
capacity days;
(3) the
ancillary capital portion of the prospective per-day payment rate is determined
by calculating the percentage of capital cost for each ancillary cost center
and multiplying the percentage by the related Medicaid long-term care ancillary
costs from the base year, by cost center, and totaling the calculated capital
costs from all cost centers; the resulting total is divided by the sum of the
Medicaid long-term care patient days from the base year;
(4) the noncapital ancillary portion of the
prospective per-day rate is the Medicaid long-term care noncapital ancillary
costs from the base year divided by the sum of the facility's Medicaid
long-term care patient days from the base year; the resulting per-day
noncapital long-term care ancillary cost is updated to the prospective year
based on adjustment factors identified in
7
AAC 150.150; the total Medicaid long-term care
ancillary costs less the capital portion of the Medicaid long-term care
ancillary costs as determined in (3) of this subsection equals the total
noncapital Medicaid long-term care ancillary costs to be used for this portion
of the rate;
(5) for purposes of
this subsection, Medicaid long-term care patient days are the covered days from
the MR-0-14 report;
(6) for
purposes of this subsection, if the department determines that a provision in
this chapter became effective after the last adjustment under
7
AAC 150.150 and the provision may change the per-day
rate by a material amount, the department will apply the provision when the
per-day rate is updated to the prospective year by the adjustment factors in
7
AAC 150.150;
(7) for purposes of this subsection, costs
are the lower of
(A) Medicaid long-term care
costs; the department will calculate those costs as the sum of
(i) Medicaid long-term routine costs,
obtained by dividing the allowable routine costs by the number of total
long-term care patient days, as those numbers given in the adjusted Medicare
cost report, and multiplying the resulting quotient by the total Medicaid
long-term care patients as adjusted in accordance with
7
AAC 150.170 and
7
AAC 150.200; and
(ii) Medicaid long-term care ancillary costs,
obtained by multiplying for each allowable cost center the total Medicaid
charges, as given in the adjusted Medicare cost report, by the cost-to-charge
ratio for that cost center, and by totaling the resulting products for the
aggregate amount of long-term care ancillary costs; or
(B) 100 percent of charges in the aggregate
to the general public; the department will calculate those charges as the sum
of the
(i) long-term care routine charges to
Medicaid patients, as reported on the MR-0-14 report; and
(ii) long-term care charges for ancillary
services to Medicaid patients, as those charges are determined from the
adjusted Medicare cost report.
(h) If the facility is granted a certificate
of need under AS 18.07 to make an expenditure of at least $5,000,000, the
department will allow a change in the per-day rates calculated under this
section for certificate of need capital costs as follows:
(1) the department will change the per-day
rate when the assets that have a certificate of need are placed in service by
the facility after the base year;
(2) for facilities that provide both a
long-term care component and a general acute care hospital component, budgeted
capital will be allocated to each component based upon anticipated capital use
for each component as determined by the department from the appropriate
certificate of need documents and supporting documentation;
(3) if a facility is granted a certificate of
need to make an expenditure of at least $5,000,000 to construct additional
beds, additional capital payment add-on amounts to the per-day rate include the
base year's patient days plus additional patient days associated with the
additional beds; the additional days are calculated as the facility's base year
occupancy percentage multiplied by 80 percent and multiplied by the additional
beds approved in the certificate of need; the resulting figure is further
multiplied by 365;
(4) the capital
component of the rates will be adjusted to reflect appropriate capital costs
for the prospective rate year based on certificate of need documentation,
assets retired in conjunction with the certificate of need, and Medicare cost
reporting requirements.
(i) If a new facility or a new psychiatric
unit in a general acute care hospital, except a general acute care hospital
subject to Diagnosis Related Groups (DRG) reimbursement under
7
AAC 150.250, is licensed or certified, or if a new
provider begins to participate in the per-day prospective payment system, the
rates for the facility will be calculated as follows:
(1) for general acute care and specialty
hospitals, the inpatient per-day rate and the outpatient payment percentage
will be established at the statewide weighted average of inpatient per-day
rates and outpatient payment percentages of general acute care and specialty
hospitals in accordance with this section for the most recent 12 months of
permanent rates; patient rates are the statewide weighted average using the
base year's patient days and the outpatient percentages are the statewide
weighted average using the base year's outpatient charges;
(2) for an inpatient psychiatric hospital, or
a separately licensed or certified psychiatric unit in a general acute care
hospital, the inpatient per-day rate will be established at the statewide
weighted average of inpatient per-day rates of psychiatric hospitals in
accordance with this section for the most recent 12 months of permanent rates;
rates are the statewide weighted average using the base year's patient
days;
(3) for long-term care
facilities, the rate is the sum of the
(A)
swing-bed rate in effect at the start of the facility's rate year, less the
average capital costs contained in the swing-bed rate; and
(B) capital costs identified by the new
facility, subject to the limitations described in
7
AAC 150.170, using the greater of occupancy rates
approved in the certificate of need or 80 percent of licensed
beds;
(4) rates for a new
facility, a new separately licensed or certified psychiatric unit in a general
acute care hospital, or a new provider subject to the per-day prospective
payment system will be established under (b) - (h) of this section after two
full fiscal years of cost data, timely filed with the department in accordance
with 7 AAC 150.130(c),
is reported.
(j) The
department will determine a rate of payment for ambulatory surgical centers
based on the federal Medicare ambulatory surgical center payment rates for
federal fiscal year 2000, adopted by reference in
7
AAC 160.900, and as adjusted annually by the
adjustment factors in
7
AAC 150.150.
(k) The department will determine a rate of
payment for swing-bed services in accordance with
42 C.F.R.
447.280, adopted by reference in
7
AAC 160.900.
(l) Prospective payment rates for facilities
that are calculated and paid on a per-day rate basis will be set at a level no
greater than the per-day rates proposed in the certificate of need application
and other information the applicant provided as a basis for approval of the
certificate of need for the first year. The limitation set out in this
subsection applies for the first year and for the two years immediately
following the first year that at least one of the following events occurs:
(1) opening of the new or modified health
care facility;
(2) alteration of
the bed capacity;
(3) the
implementation date of a change in offered categories of health service or bed
capacity.
(m) The per-day
rates calculated under this section may not exceed corresponding charges
rendered to the general public.
Authority:AS
47.05.010
AS
47.07.070
