Current through Register Vol. 24-18, September 15, 2024
The medicaid agency redesigns (rebases) the medicaid
inpatient payment system as needed. The base inpatient conversion factor and
per diem rates are only updated during a detailed rebasing process, or as
directed by the state legislature. Inpatient payment system factors such as the
ratio of costs-to-charges (RCC), weighted costs-to-charges (WCC), and
administrative day rate are rebased on an annual basis. As part of the
rebasing, the agency does all of the following:
(1) Gathers data. The agency uses the
following data resources considered to be the most complete and available at
the time:
(a) One year of paid claim data from
the agency's medicaid management information system (MMIS). The agency
excludes:
(i) Claims related to state programs
and paid at the Title XIX reduced rates from the claim data; and
(ii) Critical access hospital claims paid per
WAC 182-550-2598; and
(b) The hospital's most current
medicare cost report data from the health care cost report information system
(HCRIS) maintained by the Centers for Medicare and Medicaid Services (CMS). If
the hospital's medicare cost report from HCRIS is not available, the agency
uses the medicare cost report provided by the hospital.
(c) FFS and managed care encounter
data.
(2) Estimates
costs. The agency uses one of two methods to estimate costs. The agency may
perform an aggregate cost determination by multiplying the ratio of
costs-to-charges (RCC) by the total billed charges, or the agency may use the
following detailed costing method:
(a) The
agency identifies routine and ancillary cost for operating capital, and direct
medical education cost components using different worksheets from the
hospital's medicare cost report;
(b) The agency estimates costs for each claim
in the dataset as follows:
(i) Accommodation
services. The agency multiplies the average hospital cost per day reported in
the medicare cost report data for each type of accommodation service (e.g.,
adult and pediatric, intensive care unit, psychiatric, nursery) by the number
of days reported at the claim line level by type of service; and
(ii) Ancillary services. The agency
multiplies the RCC reported for each ancillary type of services (e.g.,
operating room, recovery room, radiology, laboratory, pharmacy, or clinic) by
the allowed charges reported at the claim line level by type of service;
and
(c) The agency uses
the following standard cost components for accommodation and ancillary services
for estimating costs of claims:
(i) Routine
cost components:
(A) Routine care;
(B) Intensive care;
(C) Intensive care-psychiatric;
(D) Coronary care;
(E) Nursery;
(F) Neonatal ICU;
(G) Alcohol/substance abuse;
(H) Psychiatric;
(I) Oncology; and
(J) Rehabilitation.
(ii) Ancillary cost components:
(A) Operating room;
(B) Recovery room;
(C) Delivery/labor room;
(D) Anesthesiology;
(E) Radio, diagnostic;
(F) Radio, therapeutic;
(G) Radioisotope;
(H) Laboratory;
(I) Blood administration;
(J) Intravenous therapy;
(K) Respiratory therapy;
(L) Physical therapy;
(M) Occupational therapy;
(N) Speech pathology;
(O) Electrocardiography;
(P) Electroencephalography;
(Q) Medical supplies;
(R) Drugs;
(S) Renal dialysis/home dialysis;
(T) Ancillary oncology;
(U) Cardiology;
(V) Ambulatory surgery;
(W) CT scan/MRI;
(X) Clinic;
(Y) Emergency;
(Z) Ultrasound;
(AA) NICU transportation;
(BB) GI laboratory;
(CC) Miscellaneous; and
(DD) Observation beds.
(3) Specifies resource
use with relative weights. The agency uses national relative weights designed
by 3MTM Corporation as part of its all-patient
refined-diagnostic related group (APR-DRG) payment system. The agency
periodically reviews and determines the most appropriate APR-DRG grouper
version to use.
(4) Calculates base
payment factors. The agency calculates the average, or base, DRG conversion
factor and per diem rates. The base is calculated as the maximum amount that
can be used, along with all other payment factors and adjustments described in
this chapter. The agency models the rebased system to be budget neutral on a
prospective basis, including global adjustments to the budget target determined
by the agency. The agency ensures that base DRG conversion factors and per diem
rates are sufficient to support economy, efficiency, and access to services for
medicaid recipients. The agency will publish base rate factors on its
website.
(5) To maintain budget
neutrality, the agency makes global adjustments as needed.
(a) Claims paid under the DRG, rehab per
diem, and withdrawal management per diem payment methods were reduced to
support an estimated $3,500,000 increase in psychiatric payments to acute
hospitals.
(b) Claims for acute
hospitals paid under the psychiatric per diem method were increased by a factor
to inflate estimated system payments by $3,500,000.
(c) Effective for dates of admission on and
after October 1, 2017, the agency increased psychiatric per diem rates as
directed by the legislature. The increase applies to any hospital with 200 or
more psychiatric bed days.
(i) The agency
prioritized the increase for hospitals not currently paid based on
provider-specific costs using a similar methodology to set rates for existing
inpatient facilities utilizing cost report information for hospital fiscal
years ending in 2016.
(ii) The
distribution of funds for each fiscal year is as follows:
(A) Free-standing psychiatric hospitals
receive 68.15 percent of the statewide average cost per day.
(B) All other hospitals receive the greater
of 78.41 percent of their provider-specific cost, or their current medicaid
psychiatric per diem rate.
(iii) The agency set the increased rates to
assure that the distribution of funds does not exceed the amounts provided by
the legislature.
(iv) The agency
conducts annual reviews for updated cost information to determine whether new
and existing providers meet the 200 or more bed criteria.
(v) The agency will apply the same cost
percentage criteria for future rebasing of the psychiatric per diem
rates.
(6)
Effective July 1, 2020, the agency sets psychiatric per diem rates specific to
long-term civil commitments separately from other psychiatric per diem rates.
(a) In order to qualify for a
provider-specific long-term civil commitment psychiatric per diem, the provider
must be contracted with the agency to provide long-term civil commitment
beds.
(b) The agency sets the
provider-specific rate at the time of contracting.
(c) The agency sets the rate for acute care
hospitals with distinct psychiatric units as follows:
(i) Hospitals that have a 12-month medicare
cost report with at least 200 psychiatric bed days on file with the agency
receive a long-term psychiatric per diem rate equivalent to the costs
documented on the medicare cost report.
(ii) Hospitals that do not have a 12-month
cost report with at least 200 bed days on file with the agency receive a
long-term psychiatric per diem rate equivalent to the greater of the average of
all acute care hospitals providing long-term psychiatric services instate,
provider-specific long-term psychiatric per diem rates, or the current
short-term psychiatric per diem. The long-term psychiatric rate is applied to
any hospital that accepts patients committed to a psychiatric facility for a
period of 90 days or greater. The agency sets the rate so as not to exceed the
amount provided by the legislature.
(d) The agency sets the rates for
free-standing psychiatric hospitals as follows:
(i) Hospitals without an existing long-term
rate receive a per diem rate equivalent to either the greater of the short-term
rate or the state-wide average long-term psychiatric rate for free-standing
psychiatric hospitals.
(ii)
Hospitals that have an existing long-term per diem will continue to receive the
$940 established for July 1, 2021. In addition to the $940 per diem rate, the
hospital may submit supplemental cost data with the cost report to the agency
for consideration. If approved, the agency will make appropriate adjustments to
the medicaid inpatient psychiatric per diem payment rate of the hospital.
Adjustment of costs may include any of the following:
(A) Costs associated with professional
services and fees not accounted for in the hospital's medicare cost report or
reimbursed separately;
(B) Costs
associated with the hospital providing the long-term psychiatric patient access
to involuntary treatment court services that are not reimbursed
separately;
(C) Other costs
associated with caring for long-term psychiatric patients that are not
reimbursed separately.
(iii) The agency sets the rate so as to not
exceed the amount provided by the legislature.
(7) Determines provider specific adjustments.
The following adjustments are applied to the base factor or rate established in
subsection (4) of this section:
(a) Wage index
adjustments reflect labor costs in the cost-based statistical area (CBSA) where
a hospital is located.
(i) The agency
determines the labor portion by multiplying the base factor or rate by the
labor factor established by medicare; then
(ii) The amount in (a)(i) of this subsection
is multiplied by the most recent wage index information published by CMS at the
time the rates are set; then
(iii)
The agency adds the nonlabor portion of the base rate to the amount in (a)(ii)
of this subsection to produce a hospital-specific wage adjusted
factor.
(b) Indirect
medical education factors are applied to the hospital-specific base factor or
rate. The agency uses the indirect medical education factor established by
medicare on the most currently available medicare cost report that exists at
the time the rates are set; and
(c)
Direct medical education amounts are applied to the hospital-specific base
factor or rate. The agency determines a percentage of direct medical education
costs to overall costs using the most currently available medicare cost report
that exists at the time the rates are set.
(8) The final, hospital-specific rate is
calculated using the base rate established in subsection (4) of this section
along with any applicable adjustments in subsections (6) and (7) of this
section.
11-14-075, recodified as §182-550-3800, filed 6/30/11,
effective 7/1/11. Statutory Authority:
RCW
74.08.090,
74.09.500 and 2005 c 518.
07-14-051, § 388-550-3800, filed 6/28/07, effective 8/1/07. Statutory
Authority:
RCW
74.08.090,
74.09.500. 05-06-044, §
388-550-3800, filed 2/25/05, effective 7/1/05. Statutory Authority:
RCW
74.08.090 and
42 U.S.C.
1395 x(v),
42 C.F.R.
447.271, .11303, and .2652. 01-16-142, §
388-550-3800, filed 7/31/01, effective 8/31/01. Statutory Authority:
RCW
74.08.090,
74.09.730,
74.04.050,
70.01.010,
74.09.200, [74.09.]500,[74.09.]530
and 43.20B.020. 98-01-124, § 388-550-3800, filed 12/18/97, effective
1/18/98.
