Original Notice.

Preproposal statement of inquiry was filed as WSR 99-06-083.

Title of Rule: WAC 388-550-4900 Disproportionate share payments, 388-550-5000 Payment method--LIDSH, 388-550-5100 Payment method--MIDSH, 388-550-5110 MI Public DSH (new section), 388-550-5120 MI Nonpublic DSH (new section), 388-550-5150 Payment method--GAU DSH, 388-550-5200 Payment method--SRHAPDSH, 388-550-5350 Payment method--CTHFPDSH, and 388-550-5400 Payment method--PHDDSH.

Purpose: To ensure that the department's rules reflect current policy and practice. To put into rule payment methodology for hospitals that receive medically indigent disproportionate share hospital payments. To comply with the Governor's Executive Order 97-02 which mandates that rules be reviewed for clarity, foundation in law, etc.

Statutory Authority for Adoption: RCW 74.08.090, 74.09.730, 42 U.S.C. 1396r-4.

Statute Being Implemented: RCW 74.08.090 and [74.08.]730; 42 U.S.C. 1396r-4.

Summary: Codifies payment methodology for hospitals that receive medically indigent disproportionate share payments.

Reasons Supporting Proposal: To ensure that the department's rules reflect current policy and practice.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Richard Mueller, DOSS, 623 8th Avenue S.E., Olympia, WA 98501, (360) 586-7885.

Name of Proponent: Department of Social and Health Services, Medical Assistance Administration, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: Puts into rule the payment methodology for hospitals that receive medically indigent disproportionate share payments. The purpose is to reduce low income disproportionate share (LIDSH) payments to more profitable hospitals, and increase LIDSH payments to less profitable hospitals. The anticipated effects are the same as the purpose.

Proposal Changes the Following Existing Rules: Amends the rules listed in Title of Rule above to add payment methodology for low income disproportionate share (LIDSH) payments and for medically indigent disproportionate share (MIDSH) payments to the state's disproportionate share payment program.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The department has analyzed the proposed amendments and concludes that no new costs will be imposed on small businesses affected by the amended rules.

RCW 34.05.328 applies to this rule adoption. The rules meet the definition of a significant legislative rule and the department has prepared a cost-benefit analysis which can be obtained by contacting Richard Mueller.

Hearing Location: Lacey Government Center (behind Tokyo Bento Restaurant), 1009 College Street S.E., Room 104-B, Lacey, WA 98503, on May 25, 1999, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Paige Wall by May 14, 1999, phone (360) 902-7540, TTY (360) 902-8324, e-mail pwall@dshs.wa.gov.

Submit Written Comments to: Identify WAC Numbers, Paige Wall, Rules Coordinator, Rules and Policies Assistance Unit, P.O. Box 45850, Olympia, WA 98504-5850, fax (360) 902-8292, by May 25, 1999.

Date of Intended Adoption: May 26, 1999.

April 19, 1999

Marie Myerchin-Redifer, Manager

Rules and Policies Assistance Unit

(1) As required by section 1902 (a)(13)(A) of the Social Security Act, the ((department shall give)) medical assistance administration (MAA) gives consideration to hospitals which serve a disproportionate number of low-income ((patients)) clients with special needs by making a payment adjustment to eligible hospitals. ((The department shall deem)) MAA considers this adjustment a disproportionate share payment.

(2) ((The department shall deem)) MAA considers a hospital a disproportionate share hospital if both the following apply:

(a) The hospital's Medicaid inpatient utilization rate (MIPUR)((, as defined in WAC 388-550-1050,)) is at least one standard deviation above the mean Medicaid inpatient utilization rate for hospitals receiving Medicaid payments in the state, or its low-income utilization rate (LIUR)((, as defined in WAC 388-550-1050,)) exceeds twenty-five percent; and

(b) The hospital has at least two obstetricians who have staff privileges at the hospital and who have agreed to provide obstetric services to eligible individuals((, except that)), This requirement ((shall)) does not apply to a hospital:

(i) The inpatients of which are predominantly individuals under eighteen years of age; or

(ii) Which did not offer nonemergency obstetric services to the general public as of December 22, 1987, when section 1923 of the Social Security Act was enacted.

(3) For hospitals located in rural areas, "obstetrician" ((shall)) means any physician with staff privileges at the hospital to perform nonemergency obstetric procedures.

(4) ((The department)) MAA may ((define or deem)) consider a hospital a disproportionate share hospital if both of the following apply:

(a) The hospital has a ((Medicaid inpatient utilization rate ())MIPUR(())) of not less than one percent; and

(b) The hospital meets the requirement of subsection (2)(((c)))(b) of this section.

(5) ((The department shall administer the following disproportionate share programs :

(a))) MAA administers the low-income disproportionate share ((hospital;)) (LIDSH) program and may administer any of the:

(((b))) (a) Medically((-)) indigent disproportionate share ((hospital)) (MIDSH);

(b) Medically-indigent public disproportionate share (MIPDSH);

(c) Medically-indigent nonpublic disproportionate share (MINPDSH);

(d) General assistance-unemployable disproportionate share ((hospital)) (GAUDSH);

(((d))) (e) Small rural hospital assistance program disproportionate share ((hospital)) (SRHAPDSH);

(((e))) (f) Teaching hospital assistance program disproportionate share ((hospital)) (THAPDSH);

(((f))) (g) State teaching hospital financing program disproportionate share ((hospital)) (STHFPDSH);

(((g))) (h) County teaching hospital financing program disproportionate share ((hospital)) (CTHFPDSH); and

(((h))) (i) Public hospital district disproportionate share ((hospital)) (PHDDSH).

(6) ((The department shall allow)) MAA allows a hospital to receive any one or all of the disproportionate share hospital (DSH) payment adjustments discussed in subsection (5) of this section ((if)) when the hospital:

(a) ((The hospital)) Applies to ((the department)) MAA; and

(b) Meets the eligibility requirements for the particular DSH payment program, as discussed in WAC 388-550-5000 through 388-550-5400.

(7) ((The department shall ensure)) MAA ensures each hospital's total DSH payments do not exceed the individual hospital's DSH limit, defined as:

(a) The cost to the hospital of providing services to Medicaid ((patients)) clients, including ((patients)) clients served under Medicaid managed care programs((,));

(b) Less the amount paid by the state under the non-DSH payment provision of the state plan((,));

(c) Plus the cost to the hospital of providing services to uninsured patients((,)); and

(d) Less any cash payments made by uninsured ((patients)) clients.

(8) (((a) The department's)) MAA’s total annual DSH payments ((shall)) must not exceed the state's DSH allotment for the federal fiscal year.

(((b))) If the DSH statewide allotment is exceeded, ((the department shall recoup)) MAA recoups overpayments from hospitals in the following program order:

(((i) Public hospital district disproportionate share hospital))

(a) PHDDSH;

(((ii) Teaching hospital assistance program disproportionate share hospital))

(b) THAPDSH;

(((iii) County teaching hospital financing program disproportionate share hospital))

(c) CTHFPDSH;

(((iv) State teaching hospital financing program disproportionate share hospital))

(d) STHFPDSH;

(((v) Small rural hospital assistance program disproportionate share hospital))

(e) SRHAPDSH;

(((vi) Medically-indigent disproportionate share hospital))

(f) MIDSH;

(((vii) General assistance-unemployable disproportionate share hospital))

(g) MINPDSH; ((and

(viii) Low-income disproportionate share hospital .

(9) The department shall make periodic DSH payments to eligible hospitals.  The department shall have sole discretion regarding the timing of DSH payments))

(h) MIPDSH;

(i) GAUDSH; and

(j) LIDSH.

[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, § 388-550-4900, filed 12/18/97, effective 1/18/98.]

(1) ((The department shall deem)) A hospital serving the department's clients is eligible for a low-income disproportionate share hospital (LIDSH) payment adjustment if the hospital meets the requirements of WAC 388-550-4900(2).

(2) ((The department shall pay)) MAA pays hospitals ((deemed)) considered eligible under the criteria in subsection (1) of this section ((DSH payment amounts which in)). The total LIDSH payment amounts equal the funding set by the state's appropriations act for LIDSH.  The amount ((appropriated)) that the state appropriates for LIDSH may vary from year to year.

(3) ((The department shall apportion)) MAA distributes LIDSH payments to individual hospitals as follows by:

(a) For each LIDSH-eligible hospital, ((the department shall determine)) determining the standardized Medicaid inpatient utilization rate (MIPUR).  The MIPUR is standardized by dividing the hospital's MIPUR by the average MIPUR of all LIDSH-eligible hospitals((.)) ; then

(b) Multiples the hospital's standardized MIPUR ((is multiplied)) by the hospital's most recent ((fiscal year)) case mix index, and then by the hospital's most recent fiscal year Title XIX admissions , and lastly by the hospital’s profitability factor.  MAA then multiplies the product ((is then multiplied)) by an initial random base amount((.)); then

(c) Compares the sum of all annual LIDSH ((payment so calculated for individual hospitals shall be added and compared)) payments to the appropriated amount.  If the amounts differ, MAA progressively selects a new base amount ((shall be selected progressively)) by trial and error until the sum of the LIDSH payments to hospitals equals the appropriated amount.

[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, § 388-550-5000, filed 12/18/97, effective 1/18/98.]

(1) ((The department shall deem)) MAA considers a hospital eligible for the medically indigent disproportionate share hospital (MIDSH) payment if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(((c)))(b) and (4);

(b) Is an in-state or border area hospital;

(c) Provides services to clients under the medically indigent program; and

(d) Has a low-income utilization rate of one percent or more.

(2) ((The department shall determine)) MAA determines the MIDSH payment for each eligible hospital in accordance with WAC 388-550-4800.

[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, § 388-550-5100, filed 12/18/97, effective 1/18/98.]

(1) MAA considers a hospital eligible for the medically indigent public disproportionate share hospital (MIDSH) payment if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(b) and (4);

(b) Is an in-state public hospital;

(c) Provides services to clients under the medically indigent program; and

(d) Has a low-income utilization rate of one percent or more.

(2) MAA determines the MI public DSH payment for each eligible hospital in accordance with WAC 388-550-4900.

[]

(1) MAA considers a hospital eligible for the medically indigent disproportionate share hospital (MIDSH) payment if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(b) and (4);

(b) Is an in-state nonpublic hospital;

(c) Provides services to clients under the medically indigent program; and

(d) Has a low-income utilization rate of one percent or more.

(2) MAA determines the MI nonpublic DSH payment for each eligible hospital in accordance with WAC 388-550-4900.

[]

(1) ((The department shall deem)) MAA considers a hospital eligible for the general assistance-unemployable disproportionate share hospital (GAUDSH) payment if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(((c)))(b) and (4);

(b) Is an in-state or border area hospital;

(c) Provides services to clients under the medical care services program; and

(d) Has a low-income utilization rate (LIUR) of one percent or more.

(2) ((The department shall determine)) MAA determines the GAUDSH payment for each eligible hospital in accordance with WAC 388-550-4800, except that the payment ((shall)) is not ((be)) reduced by the additional three percent specified in WAC 388-550-4800(4).

[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, § 388-550-5150, filed 12/18/97, effective 1/18/98.]

(1) ((The department shall deem)) MAA considers a hospital eligible for the small rural hospital assistance program disproportionate share hospital (SRHAPDSH) payment if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(((c)))(b) and (4);

(b) Is an in-state hospital;

(c) Is a small, rural hospital, defined as a hospital with fewer than seventy-five licensed beds and located in a city or town with a nonstudent population of thirteen thousand or less; and

(d) Provides at least one percent of its services to low-income patients in rural areas of the state.

(2)(a) ((The department shall pay)) MAA pays hospitals qualifying for SRHAPDSH payments from a legislatively appropriated pool.

(b) ((The department shall determine)) MAA determines each individual hospital's SRHAPDSH payment as follows: The total dollars in the pool will be multiplied by the percentage derived from dividing the Medicaid payments to the individual hospital during the fiscal year that is two years previous to the state fiscal year immediately preceded by the total Medicaid payments to all SRHAPDSH hospitals during the same hospital fiscal year.

(3) ((The department's)) MAA’s SRHAPDSH payments to a hospital may not exceed one hundred percent of the projected cost of care for Medicaid clients and uninsured indigent patients.  ((The department shall reallocate dollars not allocated because a hospital would otherwise exceed this ceiling to the remaining hospitals in the SRHAPDSH pool)) MAA reallocates dollars as defined in the state plan.

[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, § 388-550-5200, filed 12/18/97, effective 1/18/98.]

(1) ((The department shall deem)) MAA considers a hospital eligible for the teaching hospital assistance program disproportionate share hospital (THAPDSH) program if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(((c)))(b) and (4);

(b) Is a Washington State University hospital; and

(c) Has a Medicaid inpatient utilization rate (MIPUR) of twenty percent or more.

(2) ((The department shall fund)) MAA funds THAPDSH payments with legislatively appropriated monies.  ((The department shall divide)) MAA divides the legislatively appropriated THAPDSH amount equally between qualifying hospitals.

[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, § 388-550-5250, filed 12/18/97, effective 1/18/98.]

(1) ((The department shall deem)) MAA considers a hospital eligible for the state teaching hospital financing program disproportionate share hospital (STHFPDSH) program if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(((c)))(b) and (4);

(b) Is a state-owned university or public corporation hospital (border area hospitals are excluded);

(c) Provides a major medical teaching program, defined as a program in a hospital with more than one hundred residents and/or interns; and

(d) Has a Medicaid inpatient utilization rate (MIPUR) of at least twenty percent.

(2) MAA:

(a) ((The department shall pay)) Pays hospitals deemed eligible under the criteria in subsection (1) of this section a STHFPDSH payment from the legislatively appropriated pool specifically designated for DSH payments to state and county teaching hospitals.

(b) ((The department shall limit)) Limits STHFPDSH payments to eligible hospitals to seventy percent of the legislatively appropriated pool for DSH payments to state and county teaching hospitals.

[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, § 388-550-5300, filed 12/18/97, effective 1/18/98.]

(1) ((The department shall deem)) MAA considers a hospital eligible for the county teaching hospital financing program disproportionate share hospital (CTHFPDSH) payment if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(((c)))(b) and (4);

(b) Is a county hospital in Washington state (border area hospitals are excluded), so designated by the county in which located;

(c) Provides a major medical teaching program, defined as a program in a hospital with more than one hundred residents and/or interns; and

(d) Has a low-income utilization rate (LIUR) of at least twenty-five percent.

(2) MAA:

(a) ((The department shall pay)) Pays hospitals ((deemed)) considered eligible under the criteria in subsection (1) of this section a CTHFPDSH payment from the legislatively appropriated pool specifically designated for DSH payments to state and county teaching hospitals.

(b) ((The department shall limit))Limits CTHFPDSH payments to eligible hospitals to thirty percent of the legislatively appropriated pool for DSH payments to state and county teaching hospitals.

[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, § 388-550-5350, filed 12/18/97, effective 1/18/98.]

(1) ((The department shall deem)) MAA considers a hospital eligible for the public hospital district disproportionate share hospital (PHDDSH) payment if the hospital:

(a) Meets the criteria in WAC 388-550-4900 (2)(((c)))(b) and (4);

(b) Is a public district hospital in Washington state or a border area hospital owned by a public corporation; and

(c) Provides at least one percent of its services to low-income patients.

(2) ((The department shall pay)) MAA pays hospitals ((deemed)) considered eligible under the criteria in subsection (1) of this section a PHDDSH payment amount from the legislatively appropriated PHDDSH pool.

[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, § 388-550-5400, filed 12/18/97, effective 1/18/98.]

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