Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
205.520(3),
205.8451,
210.370-210.485,
42 C.F.R.
400.203, 413,
438.2,
447.325,
42 U.S.C.
1396n(c),
1396r-8(a)
NECESSITY, FUNCTION, AND CONFORMITY: The Cabinet for Health and
Family Services, Department for Medicaid Services has responsibility to
administer the Medicaid Program.
KRS
205.520(3) authorizes the
cabinet, by administrative regulation, to comply with any requirement that may
be imposed or opportunity presented by federal law to qualify for federal
Medicaid funds.
KRS
205.6313(4) requires the
cabinet to promulgate administrative regulations to implement Medicaid
reimbursement for primary care practitioners at community mental health
centers. This administrative regulation establishes the reimbursement
provisions and requirements regarding community mental health center services
provided to Medicaid recipients who are not enrolled with a managed care
organization.
Section 1. Definitions.
(1) "1915(c) home and community based waiver
services provider" means a Kentucky Medicaid program established pursuant to,
and in accordance with,
42 U.S.C.
1396n(c).
(2) "Allowable costs" means that portion of a
facility's cost that may be allowed by the department for reimbursement
purposes.
(3) "Community board for
mental health or individuals with an intellectual disability" means a board
established pursuant to
KRS
210.380.
(4) "Community mental health center" or
"CMHC" means a facility that meets the community mental health center
requirements established in
902
KAR 20:091.
(5) "CPT code" means a code used for
reporting procedures and services performed by medical practitioners and
published annually by the American Medical Association in Current Procedural
Terminology.
(6) "Department" means
the Department for Medicaid Services or its designee.
(7) "Enrollee" means a recipient who is
enrolled with a managed care organization.
(8) "Federal financial participation" is
defined by
42 C.F.R.
400.203.
(9) "Federal indirect rate" means the rate
approved by the United States Department for Health and Human Services (HHS)
for grantee institutions to be used to calculate indirect costs as a percentage
of direct costs.
(10) "Federal
Register" means the official journal of the United States federal government
that publishes government agency rules and public notices.
(11) "Healthcare Common Procedure Coding
System code" means a billing code:
(a)
Recognized by Medicare; and
(b)
Monitored by the Centers for Medicare and Medicaid Services.
(12) "Interim reimbursement" means
a reimbursement:
(a) In effect for a temporary
period of time; and
(b) That does
not represent final reimbursement for services provided during the period of
time.
(13)
"Kentucky-specific Medicare Physician Fee Schedule" means the list of current
reimbursement rates for physician services established by the Centers for
Medicare and Medicaid Services and available on the CMS Web site at
www.cms.go.
(14) "Managed care organization" means an
entity for which the Department for Medicaid Services has contracted to serve
as a managed care organization as defined in
42
C.F.R. 438.2.
(15) "Medicaid allowable costs" means the
costs:
(a) Associated with the
Medicaid-covered services covered pursuant to
907
KAR 1:047 and
907
KAR 1:044:
1.
Rendered to recipients who are not enrollees; and
2. Not rendered as a 1915(c) home and
community based waiver services provider; and
(b) Determined to be allowable costs by the
department.
(16) "Medical
Group Management Association (MGMA) Physician Compensation and Production
Survey Report" means a report developed and owned by the Medical Group
Management Association that:
(a) Highlights
the critical relationship between physician salaries and
productivity;
(b) Is used to align
physician salaries and benefits with provider production; and
(c) Contains:
1. Performance ratios illustrating the
relationship between compensation and production; and
2. Comprehensive and summary data tables that
cover many specialties.
(17) "Medically necessary" means that a
covered benefit is determined to be needed in accordance with
907
KAR 3:130.
(18) "Medicare Economic Index" means a
measure of inflation:
(a) Associated with the
costs of physicians' practices; and
(b) Published in the Federal
Register.
(19) "Outreach
services" means provider programs:
(a)
Specifically designed to:
1. Engage recipients
for the purposes of supporting Medicaid or Children's Health Insurance Program
(CHIP) enrollment efforts;
2.
Assist recipients with finding healthcare or coverage options; and
3. Promote preventive services for
recipients; and
(b) That
are directly assigned or allocated to a cost report line that is not cost
settled by the department.
(20) "Payment plan request" means a request
to pay an amount owed to the department over a period of time that is agreed to
by the department.
(21) "Physician
administered drug" or "PAD" means any rebateable covered outpatient drug that
is:
(a) Provided or administered to a Medicaid
recipient;
(b) Billed by a provider
other than a pharmacy provider through the medical benefit, including providers
who are physician offices or another outpatient clinical setting; and
(c) An injectable or noninjectable drug
furnished incident to provider services that are billed separately to
Medicaid.
(22) "Primary
care services" means services covered as established in
907
KAR 1:047.
(23) "Provider" is defined by
KRS
205.8451(7).
(24) "Rebateable" means a drug for which the
drug manufacturer has entered into and has in effect a rebate agreement in
accordance with
42 U.S.C.
1396r-8(a).
(25) "Recipient" is defined by
KRS
205.8451(9).
(26) "State fiscal year" means the period
beginning on July 1 of a calendar year and ending on June 30 of the following
calendar year.
Section 2.
General Reimbursement Provisions.
(1) The
department shall reimburse a participating in-state community mental health
center under this administrative regulation for services:
(a) If the services are:
1. Covered pursuant to:
a.
907
KAR 1:044; or
b.
907
KAR 1:047;
2. Not provided by the CMHC acting as a
1915(c) home and community based waiver services provider, as those services
are reimbursed based on the home and community based waiver;
3. Provided to recipients who are not
enrolled with a managed care organization; and
4. Medically necessary; and
(b) Based on the community mental
health center's Medicaid allowable costs.
(2) The department's reimbursement shall
include reimbursing:
(a) On an interim basis
during the course of a cost report period; and
(b) A final reimbursement for the state
fiscal year that results from a reconciliation of the interim reimbursement
amount paid to the CMHC compared to the CMHC's Medicaid allowable cost by cost
center for the state fiscal year.
Section 3. Interim Reimbursement for Primary
Care Services and PAD.
(1) The department's
interim reimbursement to a CMHC for primary care services shall depend upon the
type of primary care service.
(2)
(a) The department's interim reimbursement
for services shall be the reimbursement established for the service on the
current Kentucky-specific Medicare Physician Fee Schedule unless a
reimbursement for the service does not exist on the current Kentucky-specific
Medicare Physician Fee Schedule for the following:
1. Physician services;
2. Laboratory services;
3. Radiological services;
4. Occupational therapy;
5. Physical therapy; or
6. Speech-language pathology.
(b) If reimbursement for a given
service listed in paragraph (a) of this subsection does not exist on the
current Kentucky-specific Medicare Physician Fee Schedule, the department shall
reimburse on an interim basis for the service as it reimburses for services
pursuant to
907 KAR
3:010 or
907
KAR 8:045.
(3) The department's interim reimbursement
for the cost of PAD in a CMHC shall be the reimbursement methodology
established in
907
KAR 23:020.
Section 4. Interim Reimbursement for
Behavioral Health Services.
(1)
(a) To establish interim rates for behavioral
health services effective for dates of service through June 30, 2018, the
department shall use the CMHC rates paid effective July 1, 2015.
(b) To establish interim rates for behavioral
health services effective for dates of service July 1, 2018, and each
subsequent July 1, the department shall use a CMHC's most recently submitted
cost report that meets the requirements established in paragraph (c) of this
subsection.
(c) The cost report
shall comply with all requirements established in Section 5(1) of this
administrative regulation.
(2) The department shall:
(a) Review the cost report referenced in
subsection (1)(b) of this section; and
(b) Establish interim rates for
Medicaid-covered behavioral health services:
1. To be effective July 1, 2018;
2. Based on Medicaid allowable costs as
determined by the department through its review;
3. Intended to result in a reimbursement for
Medicaid-covered behavioral health services:
a. Provided to recipients who are not
enrollees; and
b. That equals the
department's estimate of behavioral health services' costs for the CMHC for the
period; and
4. That shall
be updated effective July 1, 2019, and each July 1 thereafter, based on the
most recently received cost report referenced in subsection (1)(b) of this
section.
(3)
Interim rates for behavioral health services effective July 1 each calendar
year shall have been trended and indexed from the midpoint of the cost report
period to the midpoint of the rate year using the Medicare Economic
Index.
(4) To illustrate the
timeline referenced in subsection (2)(b)1. of this section, a cost report
submitted by a CMHC to the department on December 31, 2017, shall be used by
the department to establish behavioral health services' interim rates effective
July 1, 2018.
(5)
(a) A behavioral health services interim rate
shall not be subject to retroactive adjustment except as specified in this
subsection.
(b) The department
shall adjust a behavioral health services interim rate during the state fiscal
year if the rate that was established appears likely to result in a substantial
cost settlement that could be avoided by adjusting the rate.
(c)
1. If
the cost report from a CMHC has not been audited or desk-reviewed by the
department prior to establishing interim rates for the next state fiscal year,
the department shall use the cost report under the condition that interim rates
shall be subject to adjustment as established in subparagraph 2. of this
paragraph.
2. A behavioral health
services interim rate based on a cost report that has not been audited or
desk-reviewed shall be subject to adjustment when the audit or desk review is
completed.
3. An unaudited cost
report shall be subject to an adjustment to the audited amount after the
auditing has occurred.
(d) Upon receipt of the cost report filed
December 31, 2017, the department shall review the cost report to determine if
the interim rates established in accordance with subsection (1)(a) of this
section need to be revised to more closely reflect the costs of services for
the interim period.
Section
5. Final Reimbursement Beginning with the State Fiscal Year that
Begins July 1, 2018.
(1)
(a) For the state fiscal year spanning July
1, 2017, through June 30, 2018, and for subsequent state fiscal years, by
December 31 following the end of the state fiscal year, a CMHC shall submit a
cost report to the department:
1. In a format
that has been approved by the Centers for Medicare and Medicaid
Services;
2. That has been audited
by an independent auditing entity; and
3. That states all of the:
a. CMHC's Medicaid allowable direct costs
for:
(i) Medicaid-covered services rendered to
eligible recipients during the cost report period; and
(ii) Medicaid-covered PAD rendered to
eligible recipients during the cost report period;
b. CMHC's costs associated with:
(i) Medicaid-covered services rendered to
enrollees during the cost report period; and
(ii) Medicaid-covered PAD rendered to
enrollees during the cost report period;
c. Costs of the community board for mental
health or individuals with an intellectual disability under which the CMHC
operates for the cost report period; and
d. CMHC's costs associated with services
rendered to individuals:
(i) That were
reimbursed by an insurer or party other than the department or a managed care
organization; and
(ii) During the
cost report period.
(b) To illustrate the timeline referenced in
paragraph (a) of this subsection, an independently audited cost report stating
costs associated with services and PAD provided during the state fiscal year
spanning July 1, 2017, through June 30, 2018, shall be submitted to the
department by December 31, 2018.
(2) By October 1 following the department's
receipt of a CMHC's completed cost report submitted to the department by the
prior December 31, the department shall:
(a)
Review the cost report referenced in subsection (1)(a) of this section;
and
(b) Compare the Medicaid
allowable costs to the department's interim reimbursement for Medicaid-covered
services and PAD rendered during the same state fiscal year.
(3)
(a) After the department compares a CMHC's
interim reimbursement with the CMHC's Medicaid allowable costs for the period,
if the department determines that the interim reimbursement:
1. Was less than the CMHC's Medicaid
allowable costs for the period, the department shall send a payment to the CMHC
equal to the difference between the CMHC's total interim reimbursement and the
CMHC's Medicaid allowable costs; or
2. Exceeded the CMHC's Medicaid allowable
costs for the period, the:
a. Department shall
send written notification to the CMHC requesting the amount of the overpayment;
and
b. CMHC shall, within thirty
(30) calendar days of receiving the department's written notice, send a:
(i) Payment to the department equal to the
excessive amount; or
(ii) Payment
plan request to the department.
(b) A CMHC shall not implement a payment plan
unless the department has approved the payment plan in writing.
(c) If a CMHC fails to comply with the
requirements established in paragraph (a)2 of this subsection, the department
shall:
1. Suspend payment to the CMHC;
and
2. Recoup the amount owed by
the CMHC to the department.
Section 6. Final Reimbursement for the Cost
Report Period Spanning November 1, 2016, through June 30, 2017. The provisions
established in Section 5 of this administrative regulation shall apply to final
reimbursement for the period beginning November 1, 2016, through June 30, 2017,
except that the cost report period shall begin November 1, 2016, and end June
30, 2017.
Section 7. New Services.
(1) Reimbursement regarding a projection of
the cost of a new Medicaid-covered service or expansion shall be made on a
prospective basis in that the costs of the new service or expansion shall be
considered when actually incurred as an allowable cost.
(2)
(a) A
CMHC may request an adjustment to an interim rate after reaching the mid-year
point of the new service or expansion.
(b) An adjustment shall be based on actual
costs incurred.
Section
8. Auditing and Accounting Records.
(1)
(a) The
department shall perform a desk review of each cost report to determine if an
audit is necessary and, if so, the scope of the audit.
(b) If the department determines that an
audit is not necessary, the cost report shall be settled without an
audit.
(c) A desk review or audit
shall be used to verify costs to be used in setting the interim behavioral
health services rate, to adjust interim behavioral health services rates that
have been set based on unaudited data, or for final settlement to
cost.
(2)
(a) A CMHC shall maintain and make available
any records and data necessary to justify and document:
1. Costs to the CMHC;
2. Services provided by the CMHC;
3. The cost of PAD provided, if any, by the
CMHC;
4. Cost allocations utilized
including overhead statistics and supportive documentation;
5. Any amount reported on the cost report;
and
6. Chart of accounts.
(b) The department shall have
unlimited on-site access to all of a CMHC's fiscal and service records for the
purpose of:
1. Accounting;
2. Auditing;
3. Medical review;
4. Utilization control; or
5. Program planning.
(3) A CMHC shall maintain an
acceptable accounting system to account for the:
(a) Cost of total services
provided;
(b) Charges for total
services rendered; and
(c) Charges
for covered services rendered to eligible recipients.
(4) An overpayment discovered as a result of
an audit or desk review shall be settled through recoupment or
withholding.
Section 9.
Allowable and Nonallowable Costs.
(1) The
following shall be allowable costs:
(a)
Services' or drugs' costs associated with the services or drugs;
(b) Depreciation as follows:
1. A straight line method shall be
used;
2. The edition of the
American Hospital Association's useful life guidelines currently used by the
Centers for Medicare and Medicaid Services' Medicare program shall be
used;
3. The maximum amount for
expensing an item in a single cost report shall be $5,000; and
4. Only the depreciation of assets actually
being used to provide services shall be recognized;
(c) Interest costs;
(d) Costs incurred for research purposes,
which shall be allowable to the extent that the research costs are related to
usual patient services and are not covered by separate research
funding;
(e) Costs of motor
vehicles used by management personnel up to $25,000;
(f) Costs for training or educational
purposes for licensed professional staff outside of Kentucky excluding
transportation costs to travel to the training or education;
(g) Costs associated with any necessary legal
expense incurred in the normal administration of the CMHC;
(h) The cost of administrative staff
salaries, which shall be limited to the average salary for the given position
as established for the geographic area on
www.salary.com.
(i) The cost of practitioner salaries, which
shall be limited to the median salary for the southern region as reported in
the Medical Group Management Association (MGMA) Physician Compensation and
Production Survey Report, if available.
1. A
per visit amount using MGMA median visits shall be utilized.
2. The most recently available MGMA
publication that relates to the cost report period shall be used;
(j) Indirect costs, which shall
be:
1. Calculated utilizing the approved
federal indirect rate, if the provider has an approved federal indirect rate.
a. A provider shall include in indirect costs
on line 1 of the cost report the same category of costs identified as indirect
within the approved federal indirect rate supporting documentation.
b. Direct costs shall be those costs
identified as direct within the approved federal indirect rate.
c. The federal indirect rate shall be applied
to the same category of expenses identified as direct during the federal rate
determination; or
2. If
the provider does not have a federal indirect rate, those costs of an
organization that are not specifically identified with a particular project,
service, program, or activity but nevertheless are necessary to the general
operation of the organization and the conduct of the activities it performs.
The actual allowable cost of indirect services as reported on the cost report
shall be allocated to direct cost centers based on accumulated cost if a
federal indirect rate is not available; and
(k) Services provided in leased or donated
space outside the walls of the facility.
(2) To be allowable, costs shall comply with
reasonable cost principles established in 42 C.F.R. 413.
(3) The allowable cost for a service or good
purchased by a facility from a related organization shall be in accordance with
42 C.F.R.
413.17.
(4)
(a) The
following shall not be allowable costs:
1. Bad
debt;
2. Charity;
3. Courtesy allowances;
4. Political contributions;
5. Costs associated with an unsuccessful
lawsuit against the department or the Cabinet for Health and Family
Services;
6. Costs associated with
any legal expense incurred related to a judgment granted as a result of an
unlawful activity or pursuit;
7.
The value of services provided by nonpaid workers;
8. Travel or related costs or expenses
associated with nonlicensed staff attending:
a. A convention;
b. A meeting;
c. An assembly; or
d. A conference;
9. Costs related to lobbying;
10. Costs related to outreach services;
or
11. Costs incurred for
transporting recipients to services.
(b) Outreach services' costs shall either be
directly assigned or allocated to a cost report line that is not cost-settled
by the department.
(5) A
discount or other allowance received regarding the purchase of a good or
service shall be deducted from the cost of the good or service for cost
reporting purposes, including in-kind donations.
(6)
(a)
Maximum allowable costs shall be the maximum amount that may be allowed as
reasonable cost for the provision of a service or drug.
(b) To be considered allowable, a cost shall:
1. Be necessary and appropriate for providing
services; and
2. Not exceed usual
and customary charges.
(7) For direct and indirect personnel costs,
100 percent time reporting methods shall be utilized to group and report
expenses to each cost category. Detailed documentation shall be available upon
request.
Section 10.
Units of Service.
(1) Interim payments for
behavioral health services, physician services, physical therapy services,
occupational therapy services, speech-language pathology services, laboratory
services, or radiological services shall be based on units of
service.
(2) A unit for a
behavioral health service, a physician service, a physical therapy service, a
speech-language pathology service, an occupational therapy service, a
laboratory service, or a radiological service shall be the amount indicated for
the corresponding:
(a) CPT code; or
(b) Healthcare Common Procedure Coding System
code.
Section
11. Reimbursement of Out-of-state Providers. Reimbursement to a
participating out-of-state community mental health center shall be the lesser
of the:
(1) Charges for the service;
(2) Facility's rate as set by the state
Medicaid Program in the other state; or
(3) The state-wide average of payments for
in-state community mental health centers.
Section 12. Appeal Rights. A community mental
health center may appeal a Department for Medicaid Services decision as to the
application of this administrative regulation in accordance with
907
KAR 1:671.
Section
13. Not Applicable to Managed Care Organization. A managed care
organization shall not be required to reimburse for community mental health
center services in accordance with this administrative regulation.
Section 14. Federal Approval and Federal
Financial Participation. The department's reimbursement for services pursuant
to this administrative regulation shall be contingent upon:
(1) Receipt of federal financial
participation for the reimbursement; and
(2) Centers for Medicare and Medicaid
Services' approval for the reimbursement.
STATUTORY AUTHORITY:
KRS
194A.030(2),
194A.050(1),
205.520(3),
205.6313,
42 U.S.C.
1396a