Current through Register Vol. 30, No. 38, September 20, 2024
A. For purposes of this Section, the
following words and phrases have the following meanings unless the context
specifically requires another meaning:
1.
"Calculated inpatient costs" means the sum of inpatient covered charges
multiplied by the Milliman study's implied cost-to-charge ratio of
.8959.
2. "Claims paid amount"
means the sum of all claims paid by the Administration and contractors, as
reported by the contractor to the Administration, to a rural hospital for
covered inpatient services rendered for dates of service during the previous
state fiscal year.
3. "Fund" means
any state funds appropriated by the Legislature for the purposes set forth in
A.R.S. §
36-2905.02
and any federal funds that are available for matching the state
funds.
4. "Inpatient covered
charges" means the sum of all covered charges billed by a hospital to the
Administration or contractors, as reported by the contractors to the
Administration, for inpatient services rendered during the previous state
fiscal year.
5. "Milliman study"
means the report issued by Milliman USA on March 11, 2004, to the Arizona
Hospital and Healthcare Association that updated a portion of a cost study
entitled "Evaluation of the AHCCCS Inpatient Hospital Reimbursement System"
prepared by Milliman USA for AHCCCS on November 15, 2002. A copy of each report
is on file with the Administration.
6. "Rural hospital" means a health care
institution that is licensed as an acute care hospital by the Arizona
Department of Health Services for the previous state fiscal year and is not an
IHS hospital or a tribally owned or operated facility and:
a. Has 100 or fewer PPS beds, not including
beds reported as sub provider beds on the hospital's Medicare Cost Report, and
is located in a county with a population of less than 500,000 persons,
or
b. Is designated as a critical
access hospital for the majority of the previous state fiscal year.
B. Each February, the Administration shall
allocate the Fund to the following three pools for the fiscal year:
1. Rural hospitals with 25 or fewer PPS beds
not including sub provider beds and all Critical Access Hospitals, regardless
of the number of beds in the Critical Access Hospital;
2. Rural hospitals other than Critical Access
Hospitals with 26 to 75 PPS beds not including sub provider beds; and
3. Rural hospitals other than Critical Access
Hospitals with 76 to 100 PPS beds not including sub provider beds.
C. The Administration shall
allocate the Fund to each pool according to the ratio of claims paid amount for
all hospitals assigned to the pool to total claims paid amount for all rural
hospitals.
D. The Administration
shall determine each hospital's claims paid amount and allocate the funds in
each pool to each hospital in the pool based on the ratio of each hospital's
claims paid amount to the sum of the claims paid amount for all hospitals
assigned to the pool.
E. The
Administration shall not make a Fund payment to a hospital that will result in
the hospital's claims paid amount plus that hospital's Fund payment being
greater than that hospital's calculated inpatient costs.
1. If a hospital's claims paid amount plus
the hospital's Fund payment would be greater than the hospital's calculated
inpatient costs, the Administration shall make a Fund payment to the hospital
equal to the difference between the hospital's calculated inpatient costs and
the hospital's claims paid amount.
2. The Administration shall reallocate any
portion of a hospital's Fund allocation that is not paid to the hospital due to
the reason in subsection (E)(1) to the other eligible hospitals in the pool
based upon the ratio of the claims paid amount for each hospital remaining in
the pool to the sum of the claims paid amount for each hospital remaining in
the pool.
F. If funds
remain in a pool after allocations to each hospital in the pool under
subsections (D) and (E), the Administration shall reallocate the remaining
funds to the other pools based upon the ratio of each pool's original
allocation of the Fund as determined under subsection (C) to the sum of the
remaining pools' original Fund allocations under subsection (C). The
Administration shall allocate remaining funds to the hospitals in the remaining
pools under subsection (D) and (E). See Exhibit 1 for an example.
G. Subject to CMS approval of the method and
distribution of the Fund, the administration or its contractors will distribute
the Fund as a lump sum allocation to the rural hospitals in either one or two
installments by the end of each state fiscal year.
