West Virginia Code of State Rules
Agency 65 - Health Care Authority
Title 65 - LEGISLATIVE RULE HEALTH CARE AUTHORITY
Series 65-05 - Hospital Cost-Based Rate Review System
Section 65-5-10 - Overages
Current through Register Vol. XLI, No. 13, March 29, 2024
10.1. Patient Revenue Limits:
The Authority establishes several limits during the rate setting process. The limits currently established are listed below. These categories are subject to change by amendment to this rule when refinements are made to the cost-based rate review system.
10.2. Hospital Responsibility
A hospital is expected to monitor each of the above limits that apply to its own specific circumstances. The hospital shall take action to adjust its schedule of rates so that the end effect of such adjustment is to be in compliance with its most recently approved revenue limits established in subsection 10.1.1 prior to the end of its fiscal year.
10.3. Justification For Overages
Each DRG has a specific weight that represents the average resources required to care for cases in that particular DRG relative to the average resources used to treat cases in other DRGs. All of the DRG weights are summed then divided by the total number of discharges to determine the average case weight (mix). This process is used to determine the case mix for the Medicare, Medicaid, PEIA and non-governmental patient payor categories. The case mix index is a summary statistic representing the relative cost of each hospital's mix of patients compared to other hospitals in West Virginia.
The percentage change in case mix is generally an increase from one year to the next but in certain circumstances could decrease. The percentage increase in case mix is recognized as an appropriate justification for an overage.
Some hospital stays are significantly above or below the average in length and in cost. To the extent that the number of outlier stays exceed the number of outlier stays included in each hospital's 1990 and 1991 years regarding either the length or the costs of such outlier stays, the Authority will allow that portion of outliers represented by the excess over the 1990 and 1991 years in the calculation of overage justifications. For purposes of this subsection, an outlier constitutes charges in excess of $44,000 for the fiscal year ending in 1992 or stays in excess of 30 days. In successive years, this comparison shall be made to the two preceding fiscal years. The $44,000 limit shall be increased each year by the average percentage increase per discharge approved by the Authority.
New services which do not require a certificate of need and which were initiated by the hospital during the fiscal year in which the overage occurs may constitute a justification for an overage. The hospital must be in compliance with section 13 of this rule and the service shall not have been offered previously by the hospital.
Certain events which could not reasonably have been foreseen by the hospital and/or extraordinary circumstances which are unique to an individual hospital may, in the discretion of the Authority, be considered a justification for an overage.
10.4. Effective Date
The justifications for an overage described in subsections 10.3.1, 10.3.2, and 10.3.3 shall be applicable to the first complete fiscal year, and every year thereafter, for which revenue limits were established pursuant to this rule. For example, hospitals with fiscal years ending September 30 may first use the justifications described in this section for overages which occur in fiscal year 1993; hospitals with fiscal years ending June 30 may first use the justifications described in this section for overages which occur in fiscal year 1994. These justifications shall not be valid for any overages which occur prior to the time periods described herein.
