Current through Register 1531, September 27, 2024
(1)
Data Sources.
The Division shall determine for each fiscal year a federally-mandated Medicaid
disproportionate share adjustment for alleligible 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, then 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.
(2)
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 by dividing the sum of Medicaid days for all non-acute care hospitals in
the state by the sum of total in patient 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 inpatient utilization rate by dividing each
hospital's Medicaid inpatient days by its total inpatient days. If this
hospital-specific Medicaid in patient utilization rate equals or exceeds the
threshold Medicaid inpatient utilization rate calculated pursuant to 114.1 CMR
40.11(2)(c), then the hospital shall be eligible for the federally-mandated
Medicaid disproportionate share adjustment under the Medicaid utilization
method.
(3)
Determination of Eligibility Under the Low-Income Utilization Rate
Method. The Division shall then 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 and
state and local government subsidies by the sum of total net revenues and state
and local government subsidies.
(b)
Second, calculate the free care percentage of total inpatient 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 40.11(3)(a) to the free
care percentage of total inpatient charges calculated pursuant to 114.1 CMR
40.11(3)(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.
(4)
Determination of
Payment. The payment under the federally-mandated disproportionate
share adjustment shall be calculated as follows:
(a) For each hospital determined eligible for
the federally-mandated disproportionate share adjustment under the Medicaid
utilization method established in 114.1 CMR 40.11(2), the Division shall divide
the hospital's Medicaid utilization rate calculated pursuant to 114.1 CMR
40.11(2)(d) by the threshold Medicaid utilization rate calculated pursuant to
114.1 CMR 40.11(2)(c). The ratio resulting from such division shall be the
federally-mandated disproportionate share ratio.
(b) For each hospital determined eligible for
the federally-mandated 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 disproportionate share ratio equal to one.
(c) The Division shall then determine, for
the group of all eligible hospitals, the sum of federally-mandated
disproportionate share ratios calculated pursuant to 114.1 CMR 40.11(4)(a) and
114.1 CMR 40.11(4)(b).
(d) The
Division shall then calculate a minimum payment under the federally-mandated
disproportionate share adjustment by dividing the amount of funds allocated
pursuant to 114.1 CMR 40.11(5) for payments under the federally-mandated
disproportionate share adjustment by the sum of the federally-man dated
disproportionate share ratios calculated pursuant to 114.1 CMR
40.11(4)(c).
(e) The Division shall
then multiply the minimum payment under the federally-mandated Medicaid
disproportionate share adjustment by the federally-mandated Medicaid
disproportionate share ratio established for each hospital pursuant to 114.1
CMR 40.11(4)(a) and (b). Except as provided in 114.1 CMR 40.10(2), the product
of such multiplication shall be the payment under the federally-mandated
disproportionate share adjustment.
(5)
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 one hundred fifty thousand dollars
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 40.11(4)(e).
