The purpose of the amendment to Rule 59G-6.020, Florida Administrative Code (F.A.C.), is to clarify and update reimbursement language.

 

AGENCY FOR HEALTH CARE ADMINISTRATION

Medicaid

RULE NO.:RULE TITLE:

59G-6.020Payment Methodology for Inpatient Hospital Services

PURPOSE AND EFFECT: The purpose of the amendment to Rule 59G-6.020, Florida Administrative Code (F.A.C.), is to clarify and update reimbursement language.

SUBJECT AREA TO BE ADDRESSED: Payment Methodology for Inpatient Hospital Services.

An additional area to be addressed during the workshop will be the potential regulatory impact Rule 59G- 6.020, F.A.C., will have as provided for under sections 120.54 and 120.541, Florida Statutes.

RULEMAKING AUTHORITY: 409.919 FS

LAW IMPLEMENTED: 409.905, 409.908, 409.909, 409.913, 409.9113, 409.9115, 409.9116, 409.9118, 409.9119 FS.

A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:

DATE AND TIME: July 31, 2019 from 11:00 a.m. to 11:30 a.m.

PLACE: Agency for Health Care Administration, 2727 Mahan Drive, Building 3, Tallahassee, Florida 32308-5407.

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Tanisha Feehrer If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Tanisha Feehrer, Bureau of Medicaid Program Finance, 2727 Mahan Drive, Mail Stop 23, Tallahassee, Florida 32308-5407, telephone: [phone],

e-mail: [e-mail].

Official comments to be entered into the rule record will be received until 5:00 p.m. on August 1, 2019, and may be e-mailed to [e-mail]. For general inquiries and questions about the rule, please contact the person specified above.

 

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

 

“Substantial rewording of Rule 59G-6.020 follows. See Florida Administrative Code for present text.”

59G-6.020 Payment Methodology for Inpatient Hospital Services.

(1)    This rule applies to all hospitals rendering Florida Medicaid inpatient hospital services to recipients, in accordance with rule 59G-4.150, Florida Administrative Code, (F. A. C.)

(2)    Definitions.

(a)     Actual Length of Stay – The Florida Medicaid inpatient days reported for an inpatient stay.

(b)    Automatic Rate Enhancement – Rate enhancement established in the General Appropriations Act (GAA) for which the hospital provider automatically qualifies based on special designation, regardless of their ability to provide the state share of funding.  For each hospital receiving automatic rate enhancements, an average per-discharge automatic rate enhancement payment amount is calculated by dividing the full, annual allotment by the number of Medicaid inpatient admissions in the base dataset for both the fee-for-service and managed care programs. 

(c)     Base Year – State fiscal year of historical claims extracted for pricing simulations used to set rates for an upcoming year.

(d)    Billed Charges – Hospital charges for inpatient services used by a patient and submitted on every claim to the Florida Medicaid program.

(e)     Charge Cap – A limitation that ensures the Medicaid allowed amount does not exceed the submitted charges overall for the entire inpatient claim.

(f)      Cost Report Filing Due Date – Cost reports must be filed with the Agency for Health Care Administration (AHCA) no later than five calendar months after the close of the hospital’s cost-reporting year.

(g)    Cost Reporting Year – A 12-month period of operations based upon the provider's accounting year.

(h)    Cost to Charge Ratio (CCR) – A value multiplied by hospital covered charges to estimate hospital cost for services rendered.  Estimated hospital cost is used in outlier calculations.  For hospitals reimbursed by Medicare through the Medicare Inpatient Prospective Payment System (IPPS), the hospital-specific Medicare IPPS CCR is used.  This CCR is calculated as the sum of each hospital’s operating and capital CCRs.  For hospitals not reimbursed by Medicare through the IPPS, total inpatient cost and charge data as reported on Medicare cost reports (CMS 2552-10) are used to calculate hospital-specific CCRs.  CCRs are calculated by dividing total inpatient costs by total hospital inpatient charges.

(i)      Covered Days – The days of the inpatient stay which are covered by Florida Medicaid fee-for-service program.

(j)      Diagnosis Related Group (DRG) – Classification system that reflects clinically similar groupings of services that can be expected to consume similar amounts of hospital resources.  Florida Medicaid uses the All Patient Refined Diagnosis Related Grouping (APR-DRG) classification developed and maintained by 3M Health Information System (HIS).

(k)    DRG National Average Length of Stay – The average length of stay for the DRG.

(l)      DRG Relative Weight – A numerical weight assigned that reflects the typical hospital resources consumed in care of a patient. Florida Medicaid values are set so that the average value equals 1.0 for historical Medicaid claims from the Base Year.

(m)   Inpatient Medicaid Cost Report – Detail costs apportioned to Medicaid in the Medicaid version of the CMS 2552 Cost Report.

(n)    Marginal Cost Factor – A factor used in the calculation of outlier payment for inpatient claims priced via DRG method.  The Marginal cost factor is a percentage set by AHCA.

(o)    Medicaid Trend Adjustment (MTA) Percentage – The MTA percentage is a percentage reduction that is uniformly applied to all Florida Medicaid providers each rate period which equals all recurring and nonrecurring budget reductions on an annualized basis. 

(p)    Outlier Loss Threshold – A fixed amount of Medicaid loss.

(q)    Outlier payment – Payments made when the estimated hospital cost for an admission far exceeds normal reimbursement for the DRG assigned to the claim. 

(r)      Policy Adjustor - Numerical multipliers included in the DRG payment calculation that increase or decrease payments to categories of services, categories of providers, or both.

(s)     Prospective Inflation Factor – A multiplier calculated as a ratio of the IHS Global Insight Hospital Market Basket inflation factor from the midpoint of rate year divided by the inflation factor for the midpoint of base year.

(t)      Provider Base Rate – One standardized rate for all hospitals reimbursed under the DRG pricing.  The amount is authorized by the Florida Legislature and provided in the GAA.

(u)    Rate Setting Due Date – All cost reports postmarked by March 31 and received by April 15 shall be used to establish the reimbursement rates for the subsequent rate period.

(v)    Trauma Hospital Rate Enhancement – Rate enhancement for which the hospital automatically qualifies based on special designation as one of three trauma classifications – Level I Trauma, Level II Trauma or Pediatric Trauma.  The trauma multipliers are defined in the GAA.

(3)    Reimbursement.  AHCA will reimburse for Florida Medicaid inpatient hospital services rendered using the DRG-based methodology for all facilities except state-owned psychiatric specialty hospitals, who are paid via a per diem, in accordance with section 409.919, F.S.

(4)    Reimbursement Methodology.

(a)     DRG Hospitals

1. Standard DRG Payment: The basic components which make up DRG payment on an individual claims are shown below.  The components may be adjusted because of patient transfer, non-covered days or the charge cap policy.

2. DRG Payment Calculation. The calculation is as follows:

a.        Claim Payment = DRG Base Payment + Outlier Payment + Automatic Rate Enhancement Add-on + Trauma Rate Enhancement

b.       DRG Base Payment = Provider Base Rate * DRG Relative Weight * Maximum Policy Adjustor

c.        Outlier Payment = (Estimated Loss – Outlier Loss Threshold) * Marginal Cost Factor

d.       Estimated Loss = (Billed Charges * Provider CCR) – DRG Base Payment; if calculation is less than zero, then outlier payment is set to $0. 

e.        For transfer claims, Transfer Base Payment = (DRG Base Payment / DRG National Average Length of Stay) * (Actual Length of Stay + 1)

f.        For non-covered days and charge cap, DRG Adjusted Payment = (DRG Base Payment * Proration Factor); Outlier Adjusted Payment = (Outlier Payment * Proration Factor)

g.       Automatic Rate Enhancement (ARE) Add-on = Average per-discharge ARE * (DRG Relative Weight / Hospital Historical Average Medicaid Relative Weight)

h.       Trauma Rate Enhancement = DRG Base Payment * Trauma Multiplier

(b)    Non-DRG Hospitals (State-Owned Psychiatric Facilities)  

1. Standard Per Diem Payment: Determine allowable cost, covered days, and charges for each provider based on the Medicaid cost report filed by the rate setting due date. The basic components, which make up Per Diem payment on an individual claims are shown below. 

2. Per Diem Payment Calculation.  The calculation is as follows:

a.        Variable Medicaid Cost = (Cost Report Inpatient Medicaid Cost – Cost Report Medicaid Fixed Cost) * Prospective Inflation Factor

b.       Variable Cost Rate = Variable Medicaid Cost / Covered Days

c.        Fixed Cost = Cost Report Fixed Cost / Covered Days

d.       Rate Based on Costs = Variable Cost Rate + Fixed Cost

e.        Rate Based on Charges = Total Medicaid Charges / Covered Days

f.        Prospective Rate = Lesser of Rate Based on Costs or Rate Based on Charges

g.       MTA = Prospective Rate * MTA Percentage

h.       Per Diem Rate = Prospective Rate – MTA

(5)    Cost Settlement.  AHCA will not subject hospitals reimbursed using the DRG methodology to retrospective cost settlement.

(6)    Crossover Claims.  For inpatient hospital crossover claims, AHCA reimburses Medicare Parts A and C, deductible(s) coinsurance, and copayments for dually eligible recipients, based on the lesser of the amount billed or the Florida Medicaid rate. AHCA reimbursement for crossover claims is up to the Medicaid rate, less any amount paid by Medicare.  If this amount is negative, no Medicaid reimbursement is made. If this amount is positive, Medicaid reimburses the deductible plus the coinsurance or copayment; or the Medicaid rate, whichever is less.

Rulemaking Authority 409.919 FS. Law Implemented 409.905, 409.908, 409.909, 409.913, 409.9113, 409.9115, 409.9116, 409.9118, 409.9119 FS. History–New 10-31-85, Formerly 10C-7.391, Amended 10-1-86, 1-10-89, 11-19-89, 3-26-90, 8-14-90, 9-30-90, 9-16-91, 4-6-92, 11-30-92, 6-30-93, Formerly 10C-7.0391, Amended 4-10-94, 8-15-94, 1-11-95, 5-13-96, 7-1-96, 12-2-96, 11-30-97, 9-16-98, 11-10-99, 9-20-00, 3-31-02, 1-8-03, 7-3-03, 2-1-04, 2-16-04, 2-17-04, 8-10-04, 10-12-04, 1-10-06, 4-19-06, 12-11-06, 3-4-08, 6-10-08, 1-11-09, 3-24-10, 7-5-10, 7-15-10, 2-23-11, 10-30-12, 4-23-14, 1-19-15, 6-15-15, 7-11-16, 7-10-17, 7-12-18,_______.