Current through Register 1531, September 27, 2024
The Medicaid program will assist hospitals which carry a
disproportionate financial burden of caring for the uninsured and low income
persons of the Commonwealth. In accordance with Title XIX rules and
requirement, Medicaid will make an additional payment adjustments to hospitals
which qualify for such an adjustment under any one or more of the following
classification. Eligibility requirements for each type of disproportionate
share adjustment and the methodology for calculating these adjustments are
described in 114. 1 CMR 39.07.
(1) To
qualify for any type of disproportionate payment adjustment, a hospital must
have a Medicaid inpatient utilization rate (calculated by dividing Medicaid
patient days by total patient days) of not less than 1%.
(2) The total of all disproportionate share
payments awarded to a particular hospital under 114. 1 CMR 39.07 shall not
exceed the costs incurred during the year of furnishing hospital services to
individuals who either are eligible for Medicaid or have no health insurance or
source of third part coverage, less payments by Medicaid and by uninsured
patients.
(3)
Data
Sources. The Division shall determine for each fiscal year a
federally-mandated Medicaid disproportionate share adjustment, for all eligible
hospitals, using the data and methodology described below. The Division shall
use the following data sources in its disproportionate share adjustment, unless
the specified data source is unavailable. If the specified data source is
unavailable, the Division shall determine and use the best alternative data
source.
(a) The prior year RSC-403 report
shall be used to determine Medicaid days, total days, Medicaid inpatient net
revenues, total inpatient net revenues, total inpatient charges and free care
charge-offs. If said RSC-403 report is not available, the Division shall use
the most recent available previous RSC-403 report to estimate these
variables.
(b) The hospital's
audited financial statements for the prior year shall be used to determine the
state and/or local government cash subsidy.
(c) The prior year claims data residing on
the Division of Medical Assistance's Massachusetts Medicaid Information System
shall be used to determine exceptionally high costs and exceptionally long
lengths of stay for the outlier adjustment for medically necessary inpatient
hospital services involving exceptionally high costs or exceptionally long
lengths of stay of individuals under six years of age pursuant to 114. 1 CMR
39.07(7).
(4)
Determination of Eligibility Under the Medicaid Utilization
Method. The Division shall calculate a threshold Medicaid
inpatient utilization rate to be used as a standard for determining the
eligibility of non-acute care hospitals for the federally-mandated
disproportionate share adjustment. The Division shall determine such threshold
as follows:
(a) First, calculate the statewide
weighted average Medicaid inpatient utilization rate. This shall be determined
by dividing the sum of Medicaid days for all non-acute care hospitals in the
state by the sum of total inpatient days for all non-acute care hospitals in
the state.
(b) Second, calculate
the statewide weighted standard deviation for Medicaid inpatient utilization
statistics.
(c) Third, add the
statewide weighted standard deviation for Medicaid inpatient utilization to the
statewide weighted average Medicaid inpatient utilization rate. The sum of
these two numbers shall be the threshold Medicaid inpatient utilization
rate.
(d) The Division shall then
calculate each hospital's Medicaid in patient utilization rate by dividing each
hospital's Medicaid in patient days by its total inpatient days. If this
hospital-specific Medicaid inpatient utilization rate equals or exceeds the
threshold Medicaid in patient utilization rate calculated pursuant to 114. 1
CMR 39.07(4)(c), then the hospital shall be eligible for the federally-mandated
Medicaid disproportionate share adjustment under the Medicaid utilization
method.
(5)
Determination of Eligibility Under the Low-Income Utilization Rate
Method. The Division shall calculate each hospital's low-income
utilization rate. The Division shall make such determination as follows:
(a) First, calculate the Medicaid and subsidy
share of net revenues by dividing the sum of Medicaid net revenues plus state
and local government subsidies by the sum of total net revenues plus state and
local government subsidies.
(b)
Second, calculate the free care percentage of total in patient charges by
dividing the inpatient share of audited free care charge-offs by total
inpatient charges.
(c) Third,
compute the low-income utilization rate by adding the Medicaid and subsidy
share of net revenues calculated pursuant to 114. 1 CMR 39.07(5)(a) to the free
care percentage of total inpatient charges calculated pursuant to 114. 1 CMR
39.07(5)(b). If the low-income utilization rate exceeds 25%, the hospital shall
be eligible for the federally-mandated Medicaid disproportionate share
adjustment under the low-income utilization rate method.
(6)
Determination of
Payment. The payment under the federally-mandated disproportionate
share adjustment requirement shall be calculated as follows:
(a) For each hospital determined eligible for
the federally-mandated Medicaid disproportionate share adjustment under the
Medicaid utilization method established in 114. 1 CMR 39.07(4), the Division
shall divide the hospital's Medicaid utilization rate calculated pursuant to
114. 1 CMR 39.07(4)(d) by the threshold Medicaid utilization rate calculated
pursuant to 114. 1 CMR 39.07(4)(c). The ratio resulting from such division
shall be the federally-mandated Medicaid disproportionate share
ratio.
(b) For each hospital
determined eligible for the federally-mandated Medicaid disproportionate share
adjustment under the low-income utilization rate method, but not found to be
eligible for the federally-mandated Medicaid disproportionate share adjustment
under the Medicaid utilization method, the Division shall set the hospital's
federally-mandated Medicaid disproportionate share ratio equal to
one.
(c) The Division shall then
determine, for the group of all eligible hospitals, the sum of
federally-mandated Medicaid disproportionate share ratios calculated pursuant
to 114. 1 CMR 39.07(6)(a) and 114.1 CMR 39.07(6)(b).
(d) The Division shall then calculate a
minimum payment under the federally-mandated Medicaid disproportionate share
adjustment requirement by dividing the amount of funds allocated pursuant to
114. 1 CMR 39.07(8) for payments under the federally-mandated Medicaid
disproportionate share adjustment requirement by the sum of the
federally-mandated Medicaid disproportionate share ratios calculated pursuant
to 114. 1 CMR 39.07(6)(c).
(e) The
Division shall then multiply the minimum payment under the federally-mandated
Medicaid disproportionate share adjustment requirement by the
federally-mandated Medicaid disproportionate share ratio established for each
hospital pursuant to 114. 1 CMR 39.07(6)(a) and (b). The product of such
multiplication shall be the payment under the federally-mandated
disproportionate share adjustment requirement.
(7)
Determination of Eligibility
of Disproportionate Share Non-Acute Care Hospitals for an Outlier Adjustment in
Payment Amount for Medically Necessary Inpatient Hospital Services Provided to
Individuals under Six Years of Age Involving Exceptionally Long Lengths of Stay
or exceptionally high Cost. The Division shall make such a
determination as follows:
(a)
Exceptionally long lengths of stay.
1. First, calculate a statewide weighted
average Medicaid inpatient length of stay. This shall be determined by dividing
the sum of Medicaid days for all non-acute care hospitals in the state by the
sum of total discharges for all non-acute care hospitals in the
state.
2. Second, calculate the
statewide weighted standard deviation for Medicaid inpatient length of stay
statistics.
3. Third, add 11/2 time
the statewide weighted standard deviation for Medicaid inpatient length of stay
to the statewide weighted average Medicaid inpatient length of stay. The sum of
these two numbers shall be the threshold Medicaid exceptionally long length of
stay.
(b)
Exceptionally high cost. For each disproportionate
share hospital providing services to individuals under six years of age, the
Division shall:
1. First, calculate the
average cost per Medicaid inpatient discharge for each hospital.
2. Second, calculate the standard deviation
for the cost per Medicaid inpatient discharge for each hospital.
3. Third, add 11/2 times the hospital's
standard deviation for the cost per Medicaid inpatient discharge to the
hospital's average cost per Medicaid inpatient discharge. The sum of these two
numbers shall be each hospital's threshold Medicaid exceptionally high
cost.
(c)
Eligibility for an outlier adjustment in the payment
amount. For each disproportionate share hospital providing
services to individuals under six years of age, the Division shall perform the
following:
1. Calculate the average Medicaid
inpatient length of stay involving individuals under six years of age. If this
hospital-specific average Medicaid inpatient length of stay equals or exceeds
the threshold Medicaid exceptionally long length of stay calculated pursuant to
114. 1 CMR 39.07(7)(a), then the hospital shall be eligible for an outlier
adjustment in the payment amount.
2. Calculate the cost per inpatient discharge
involving individuals under six years of age. If this cost per discharge equals
or exceeds the hospital's own threshold Medicaid exceptionally high cost
calculated pursuant to 114. 1 CMR 39.09(7)(b), then the hospital shall be
eligible for an outlier adjustment in the payment amount.
(8)
Allocation of
Funds. The total amount of funds allocated for payment to
non-acute care hospitals under the federally-mandated Medicaid disproportionate
share adjustment requirement shall be $150,000 annually. These amounts shall be
paid by the Division of Medical Assistance and distributed among the eligible
hospitals as determined pursuant to 114. 1 CMR 39.07(6)(e).
If any hospitals qualify for an Outlier Adjustment to the
payment amount pursuant to 114. 1 CMR 39.07(7), each hospital shall receive
on-half of one percent of the total funds allocated for payment to non-acute
hospitals under the federally- mandated Medicaid disproportionate share
adjustment. The amounts in each fiscal year to be distributed pursuant to 114.
1 CMR 39.07(6)(e) shall be reduced commensurately. That is, if in fiscal year
1997, two hospitals qualify under 114. 1 CMR 39.07(7), the $150,000 which would
have been other wise allocated shall be reduced by one percent for distribution
pursuant to 114. 1 CMR 39.07(6)(e).
