Hawaii Administrative Rules
Title 17 - DEPARTMENT OF HUMAN SERVICES
Department of Human Services
Chapter 1739.2 - AUTHORIZATION, PAYMENT, AND CLAIMS IN THE FEE-FOR-SERVICE MEDICAL ASSISTANCE PROGRAM - LONG TERM CARE PROSPECTIVE PAYMENT SYSTEM
Section 17-1739.2-3 - Reimbursement principles

(a) Except as noted herein, the Hawaii medical assistance program shall reimburse providers based on the number of days of care that the provider delivers to the resident, the acuity level that is medically necessary for each day of care, and the provider's PPS rate. The provider shall receive payment at the level A rate for residents who require care at acuity level A, at the level B rate for residents who require care at acuity level B, at the level C rate for residents who require care at acuity level C, and at level D rate for residents who require care at the acuity level D. Any payments made by residents or other third parties on behalf of residents shall be deducted from the reimbursement paid to providers.

(b) Except as noted herein, the Medicaid program shall pay for institutional long-term care services through the use of a facility-specific prospective per diem rate.

(c) The basic PPS rate shall be developed based on each provider's historical costs (as reflected in its base year cost report) and allocated to three components, which are subject to component cost ceilings.

(d) A proprietary provider shall receive the GET and ROE adjustments to its basic PPS rate to account for gross excise taxes and return on equity.

(e) Rates for acute facilities with federally designated swing beds shall be established according to 42 C.F.R. §447.280.

(f) Changes in ownership, management, control, operation, and leasehold interests which result in increased costs for the successor owner, management, or leaseholder shall be recognized for reimbursement purposes only to the following extent: Pursuant to the provisions of Pub. L. No. 99-272, section 9509 (a)(4)(C), the valuation of capital assets shall not be increased (as measured from the date of acquisition by the seller to the date of the change of ownership), solely as a result of a change of ownership, by more than the lesser of:

(g) The department shall pay the providers separately for ancillary services based on a fee schedule or through an ancillaries payment.

(h) Nursing facilities that have G&A or capital costs below the median for their peer group are rewarded with an incentive payment. A formula to determine the G&A incentive adjustment is defined in section 17-1739.2-1.

(i) The department may contract with providers to provide acuity level D care to selected residents.

(j) The department shall reimburse level A and level C services of a Medicare and Medicaid certified CAH on a reasonable cost basis following Medicare principles of reimbursement. Reimbursement for level A and level C routine services provided in a long term care distinct part by a CAH will be actual costs up to two hundred per cent of each provider's Medicaid routine cost limit. However, for CAH providers whose routine costs exceed the routine cost limit, reimbursement of costs will be limited to two hundred per cent of each provider's routine cost limit, and only when a routine cost limit exception request has been filed and only up to the amounts approved by the State.

(k) Members of the public may obtain the data and methodology used in establishing payment rates for providers by following the procedures defined in the Uniform Information Practices Act, chapter 92F, HRS.