The following definitions and abbreviations, those found in WAC 388-500-0005
, Medical definitions, and definitions and abbreviations found in other sections of this chapter, apply to this chapter. "Accommodation costs"
means the expenses incurred by a hospital to provide its patients services for which a separate charge is not customarily made. These expenses include, but are not limited to, room and board, medical social services, psychiatric social services, and the use of certain hospital equipment and facilities. "Acquisition cost (AC)"
means the cost of an item excluding shipping, handling, and any applicable taxes as indicated by a manufacturer's invoice. "Acute"
means a medical condition of severe intensity with sudden onset. See WAC 388-550-2511
for the definition of "acute" for the acute physical medicine and rehabilitation (Acute PM&R) program. "Acute care"
means care provided for patients who are not medically stable or have not attained a satisfactory level of rehabilitation. These patients require frequent monitoring by a health care professional in order to maintain their health status (see WAC 248-27-015
). "Acute physical medicine and rehabilitation (Acute PM&R)"
means a comprehensive inpatient rehabilitative program coordinated by an interdisciplinary team at a department-approved rehabilitation facility. The program provides twenty-four-hour specialized nursing services and an intense level of therapy for specific medical conditions for which the client shows significant potential for functional improvement. Acute PM&R is a twenty-four hour inpatient comprehensive program of integrated medical and rehabilitative services provided during the acute phase of a client's rehabilitation. "ADATSA/DASA assessment center"
means an agency contracted by the division of alcohol and substance abuse (DASA) to provide chemical dependency assessment for clients and pregnant women in accordance with the Alcoholism and Drug Addiction Treatment and Support Act (ADATSA). Full plans for a continuum of drug and alcohol treatment services for pregnant women are also developed in ADATSA/DASA assessment centers. "Add-on procedure(s)"
means secondary procedure(s) that are performed in addition to another procedure. "Administrative day"
means a day of a hospital stay in which an acute inpatient level of care is no longer necessary, and noninpatient hospital placement is appropriate. "Administrative day rate"
means the statewide medicaid average daily nursing facility rate as determined by the department. "Admitting diagnosis"
means the medical condition before study, which is initially responsible for the client's admission to the hospital, as defined by the international classification of diseases, 9th revision, clinical modification (ICD-9-CM) diagnostic code, or with the current published ICD-CM coding guidelines used by the department. "Advance directive"
means a document, recognized under state law, such as a living will, executed by a client, that tells the client's health care providers and others about the client's decisions regarding his or her health care in the event the client should become incapacitated. (See WAC 388-501-0125
.) "Aggregate capital cost"
means the total cost or the sum of all capital costs. "Aggregate cost"
means the total cost or the sum of all constituent costs. "Aggregate operating cost"
means the total cost or the sum of all operating costs. "Alcoholism and Drug Addiction Treatment and Support Act (ADATSA)"
means the law and the state-administered program it established which provides medical services for persons who are incapable of gainful employment due to alcoholism or substance addiction. "Alcoholism and/or alcohol abuse treatment"
means the provision of medical social services to an eligible client designed to mitigate or reverse the effects of alcoholism or alcohol abuse and to reduce or eliminate alcoholism or alcohol abuse behaviors and restore normal social, physical, and psychological functioning. Alcoholism or alcohol abuse treatment is characterized by the provision of a combination of alcohol education sessions, individual therapy, group therapy, and related activities to detoxified alcoholics and their families. "All-patient DRG grouper (AP-DRG)"
means a computer software program that determines the medical and surgical diagnosis related group (DRG) assignments. "Allowable"
means the calculated amount for payment, after exclusion of any "nonallowed service or charge," based on the applicable payment method before final adjustments, deductions, and add-ons. "Allowed amount"
means the initial calculated amount for any procedure or service, after exclusion of any "nonallowed service or charge," that the department allows as the basis for payment computation before final adjustments, deductions, and add-ons. "Allowed charges"
means the maximum amount for any procedure or service that the department allows as the basis for payment computation. "Allowed covered charges"
means the maximum amount of charges on a hospital claim recognized by the department as charges for "hospital covered service" and payment computation, after exclusion of any "nonallowed service or charge," and before final adjustments, deductions, and add-ons. "Ambulatory surgery"
means a surgical procedure that is not expected to require an inpatient hospital admission. "Ancillary hospital costs"
means the expenses incurred by a hospital to provide additional or supporting services to its patients during their hospital stay. See "ancillary services." "Ancillary services"
means additional or supporting services provided by a hospital to a patient during the patient's hospital stay. These services include, but are not limited to, laboratory, radiology, drugs, delivery room, operating room, postoperative recovery rooms, and other special items and services. "Appropriate level of care"
means the level of care required to best manage a client's illness or injury based on the severity of illness presentation and the intensity of services received. "Approved treatment facility"
means a treatment facility, either public or private, profit or nonprofit, approved by DSHS. "Audit"
means an assessment, evaluation, examination, or investigation of a health care provider's accounts, books and records, including:
(1) Health, financial and billing records pertaining to billed services paid by the department through medicaid, SCHIP, or other state programs, by a person not employed or affiliated with the provider, for the purpose of verifying the service was provided as billed and was allowable under program regulations; and
(2) Financial, statistical and health records, including mathematical computations and special studies conducted supporting the medicare cost report (Form 2552-96), submitted to the department for the purpose of establishing program rates for payment to hospital providers. "Audit claims sample"
means a selection of claims reviewed under a defined audit process. "Authorization" -
See "prior authorization"
and "expedited prior authorization (EPA)." "Average hospital rate"
means an average of hospital rates for any particular type of rate that the department uses. "Bad debt"
means an operating expense or loss incurred by a hospital because of uncollectible accounts receivables. "Beneficiary"
means a recipient of Social Security benefits, or a person designated by an insuring organization as eligible to receive benefits. "Billed charge"
means the charge submitted to the department by the provider. "Blended rate"
means a mathematically weighted average rate. "Bordering city hospital"
means a hospital located outside Washington state and located in one of the bordering cities listed in WAC 388-501-0175
. "BR" -
See "by report." "Budget neutrality"
is a concept that means that hospital payments resulting from payment methodology changes and rate changes should be equal to what payments would have been if the payment methodology changes and rate changes were not implemented. (See also "budget neutrality factor.") "Budget neutrality factor"
is a factor used by the department to adjust conversion factors, per diem rates, and per case rates in order that modifications to the payment methodology and rates are budget neutral. (See also "budget neutrality.") "Bundled services"
means interventions that are integral to the major procedure and are not paid separately. "Buy-in premium"
means a monthly premium the state pays so a client is enrolled in part A and/or part B medicare. "By report (BR)"
means a method of payment in which the department determines the amount it will pay for a service when the rate for that service is not included in the department's published fee schedules. Upon request the provider must submit a "report" which describes the nature, extent, time, effort and/or equipment necessary to deliver the service. "Callback"
means keeping hospital staff members on duty beyond their regularly scheduled hours, or having them return to the facility after hours to provide unscheduled services which are usually associated with hospital emergency room, surgery, laboratory and radiology services. "Capital-related costs"
or "capital costs"
means the component of operating costs related to capital assets, including, but not limited to:
(1) Net adjusted depreciation expenses;
(2) Lease and rentals for the use of depreciable assets;
(3) The costs for betterment and improvements;
(4) The cost of minor equipment;
(5) Insurance expenses on depreciable assets;
(6) Interest expense; and
(7) Capital-related costs of related organizations that provide services to the hospital.
Capital costs due solely to changes in ownership of the provider's capital assets are excluded. "CARF"
is the official name for commission on accreditation of rehabilitation facilities. CARF is an international, independent, nonprofit accreditor of human service providers and networks in the areas of aging services, behavioral health, child and youth services, employment and community services, and medical rehabilitation. "Case mix"
means, from the clinical perspective, the condition of the treated patients and the difficulty associated with providing care. Administratively, it means the resource intensity demands that patients place on an institution. "Case mix index (CMI)"
means the arithmetical index that measures the average relative weight of all cases treated in a hospital during a defined period. "Charity care"
see chapter 70.170
RCW. "Chemical dependency"
means an alcohol or drug addiction; or dependence on alcohol and one or more other psychoactive chemicals. "Children's hospital"
means a hospital primarily serving children. "Client"
means a person who receives or is eligible to receive services through department of social and health services (DSHS) programs. "CMS"
means Centers for Medicare and Medicaid Services. "CMS PPS input price index"
means a measure, expressed as a percentage, of the annual inflationary costs for hospital services, measured by Global Insight's Data Resources, Inc. (DRI). "Comorbidity"
means of, relating to, or caused by a disease other than the principal disease. "Complication"
means a disease or condition occurring subsequent to or concurrent with another condition and aggravating it. "Comprehensive hospital abstract reporting system (CHARS)"
means the department of health's inpatient hospital data collection, tracking and reporting system. "Contract hospital-selective contracting"
means for dates of admission before July 1, 2007, a licensed hospital located in a selective contracting area, which is awarded a contract to participate in the department's hospital selective contracting program. The department's hospital selective contracting program no longer exists for admissions on and after July 1, 2007. "Contract hospital"
means a hospital contracted by the department to provide specific services. "Contractual adjustment"
means the difference between the amount billed at established charges for the services provided and the amount received or due from a third-party payer under a contract agreement. A contractual adjustment is similar to a trade discount. "Cost proxy"
means an average ratio of costs to charges for ancillary charges or per diem for accommodation cost centers used to determine a hospital's cost for the services where the hospital has medicaid claim charges for the services, but does not report costs in corresponding centers in its medicare cost report. "Cost report"
see "medicare cost report." "Costs"
mean department-approved operating, medical education, and capital-related costs (capital costs) as reported and identified on the "cost report." "Cost-based conversion factor (CBCF)"
means for dates of admission before August 1, 2007, a hospital-specific dollar amount that reflects a hospital's average cost of treating medicaid and SCHIP clients. It is calculated from the hospital's cost report by dividing the hospital's costs for treating medicaid and SCHIP clients during a base period by the number of medicaid and SCHIP discharges during that same period and adjusting for the hospital's case mix. See also "hospital conversion factor"
and "negotiated conversion factor." "County hospital"
means a hospital established under the provisions of chapter 36.62
RCW. "Covered charges"
means billed charges submitted to the department on a claim by the provider, less the noncovered charges indicated on the claim. "Covered services"
see "hospital covered service" and WAC 388-501-0060
. "Critical border hospital"
means, on and after August 1, 2007, an acute care hospital located in a bordering city that the department has, through analysis of admissions and hospital days, designated as critical to provide elective health care for the department's medical assistance clients. "Current procedural terminology (CPT)"
means a systematic listing of descriptive terms and identifying codes for reporting medical services, procedures, and interventions performed by physicians. CPT is copyrighted and published annually by the American Medical Association (AMA). "Customary charge payment limit"
means the limit placed by the department on aggregate DRG payments to a hospital during a given year to assure that DRG payments do not exceed the hospital's charges to the general public for the same services. "Day outlier"
means an inpatient case with a date of admission before August 1, 2007, that requires the department to make additional payment to the hospital provider but which does not qualify as a high-cost outlier. See "day outlier payment"
and "day outlier threshold."
The department's day outlier policy no longer exists for dates of admission on and after August 1, 2007. "Day outlier payment"
means the additional amount paid to a disproportionate share hospital for inpatient claims with dates of admission before August 1, 2007, for a client five years old or younger who has a prolonged inpatient stay which exceeds the day outlier threshold but whose covered charges for care fall short of the high cost outlier threshold. The amount is determined by multiplying the number of days in excess of the day outlier threshold and the administrative day rate. "Day outlier threshold"
means for inpatient claims with dates of admission before August 1, 2007, the average number of days a client stays in the hospital for an applicable DRG before being discharged, plus twenty days. "Deductible"
means the amount a beneficiary is responsible for, before medicare starts paying; or the initial specific dollar amount for which the applicant or client is responsible. "Department"
means the state department of social and health services (DSHS). As used in this chapter, department also means MAA, HRSA, or a successor administration that administers the state's medicaid, SCHIP, and other medical assistance programs. "Detoxification"
means treatment provided to persons who are recovering from the effects of acute or chronic intoxication or withdrawal from alcohol or other drugs. "Diabetes education program"
means a comprehensive, multidisciplinary program of instruction offered by a department of health (DOH)-approved diabetes education provider to diabetic clients on dealing with diabetes. This includes instruction on nutrition, foot care, medication and insulin administration, skin care, glucose monitoring, and recognition of signs/symptoms of diabetes with appropriate treatment of problems or complications. "Diagnosis code"
means a set of numeric or alphanumeric characters assigned by the ICD-9-CM, or successor document, as a shorthand symbol to represent the nature of a disease. "Diagnosis-related group (DRG)"
means a classification system that categorizes hospital patients into clinically coherent and homogenous groups with respect to resource use, i.e., similar treatments and statistically similar lengths of stay for patients with related medical conditions. Classification of patients is based on the International Classification of Diseases (ICD-9), the presence of a surgical procedure, patient age, presence or absence of significant comorbidities or complications, and other relevant criteria. "Direct medical education costs"
means the direct costs of providing an approved medical residency program as recognized by medicare. "Discharging hospital"
means the institution releasing a client from the acute care hospital setting. "Disproportionate share hospital (DSH) payment"
means a supplemental payment(s) made by the department to a hospital that qualifies for one or more of the disproportionate share hospital programs identified in the state plan. "Disproportionate share hospital (DSH) program"
is a program through which the department gives consideration to hospitals that serve a disproportionate number of low-income patients with special needs by making payment adjustment to eligible hospitals in accordance with legislative direction and established payment methods. See 1902 (a)(13)(A)(iv) of the Social Security Act. See also WAC 388-550-4900
. "Dispute conference" -
See "hospital dispute conference." "Distinct unit"
means a medicare-certified distinct area for psychiatric or rehabilitation services within an acute care hospital or a department-designated unit in a children's hospital. "Division of alcohol and substance abuse (DASA)"
is the division within DSHS responsible for providing alcohol and drug-related services to help clients recover from alcoholism and drug addiction. "DRG" -
See "diagnosis-related group." "DRG average length-of-stay"
means for dates of admission on and after July 1, 2007, the department's average length-of-stay for a DRG classification established during a department DRG rebasing and recalibration project. "DRG-exempt services"
means services which are paid through other methodologies than those using inpatient medicaid conversion factors, inpatient state-administered program conversion factors, cost-based conversion factors (CBCF) or negotiated conversion factors (NCF). Some examples are services paid using a per diem rate, a per case rate, or a ratio of costs-to-charges (RCC) rate. "DRG payment"
means the payment made by the department for a client's inpatient hospital stay. This DRG payment allowed amount is calculated by multiplying the conversion factor by the DRG relative weight assigned by the department to provider's inpatient claim before any outlier payment calculation. "DRG relative weight"
means the average cost or charge of a certain DRG classification divided by the average cost or charge, respectively, for all cases in the entire data base for all DRG classifications. "Drug addiction and/or drug abuse treatment"
means the provision of medical and rehabilitative social services to an eligible client designed to mitigate or reverse the effects of drug addiction or drug abuse and to reduce or eliminate drug addiction or drug abuse behaviors and restore normal physical and psychological functioning. Drug addiction or drug abuse treatment is characterized by the provision of a combination of drug and alcohol education sessions, individual therapy, group therapy and related activities to detoxified addicts and their families. "DSHS"
means the department of social and health services. "Elective procedure or surgery"
means a nonemergency procedure or surgery that can be scheduled at the client's and provider's convenience. "Emergency medical condition"
see WAC 388-500-0005
. "Emergency medical expense requirement (EMER)"
means a specified amount of expenses for ambulance, emergency room or hospital services, including physician services in a hospital, incurred for an emergency medical condition that a client must incur prior to certification for the psychiatric indigent inpatient (PII) program. "Emergency room"
or "emergency facility"
or "emergency department"
means an organized, distinct hospital-based facility available twenty-four hours a day for the provision of unscheduled episodic services to patients who present for immediate medical attention, and is capable of providing emergency services including trauma care. "Emergency services"
means health care services required by and provided to a patient after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity that the absence of immediate medical attention could reasonably be expected to result in placing the patient's health in serious jeopardy; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part. For department payment to a hospital, inpatient maternity services are treated as emergency services. "Equivalency factor (EF)"
means a factor that may be used by the department in conjunction with other factors to determine the level of a state-administered program payment. See WAC 388-550-4800
. "Exempt hospital -- DRG payment method"
means a hospital that for a certain patient category is reimbursed for services to medical assistance clients through methodologies other than those using DRG conversion factors. "Exempt hospital -- Hospital selective contracting program"
means a hospital that is either not located in a selective contracting area or is exempted by the department from the selective contracting program. The department's hospital selective contracting program no longer exists for admissions on and after July 1, 2007. "Expedited prior authorization (EPA)"
means the department-delegated process of creating an authorization number for selected medical/dental procedures and related supplies and services in which providers use a set of numeric codes to indicate which department-acceptable indications, conditions, diagnoses, and/or department-defined criteria are applicable to a particular request for service. "Expedited prior authorization (EPA) number"
means an authorization number created by the provider that certifies that the department-published criteria for the medical/dental procedure or supply or services have been met. "Experimental"
means a procedure, course of treatment, drug, or piece of medical equipment, which lacks scientific evidence of safety and effectiveness. See WAC 388-531-0050
. A service is not "experimental" if the service:
(1) Is generally accepted by the medical profession as effective and appropriate; and
(2) Has been approved by the FDA or other requisite government body if such approval is required. "Fee-for-service"
means the general payment process the department uses to pay a hospital provider's claim for covered medical services provided to medical assistance clients when the payment for these services is through direct payment to the hospital provider, and is not the responsibility of one of the department's managed care organization (MCO) plans, or a mental health division designee. "Fiscal intermediary"
means medicare's designated fiscal intermediary for a region and/or category of service. "Fixed per diem rate"
means a daily amount used to determine payment for specific services provided in long-term acute care (LTAC) hospitals. "Global surgery days"
means the number of preoperative and follow-up days that are included in the payment to the physician for the major surgical procedure. "Graduate medical education costs"
means the direct and indirect costs of providing medical education in teaching hospitals. See "direct medical education costs" and "indirect medical education costs." "Grouper" -
See "all-patient DRG grouper (AP-DRG)." "Health and recovery services administration (HRSA)"
means the successor administration to the medical assistance administration within the department, authorized by the department secretary to administer the acute care portion of Title XIX medicaid, Title XXI SCHIP, and other medical assistance programs, with the exception of certain nonmedical services for persons with chronic disabilities. "Health care team"
means a group of health care providers involved in the care of a client. "High-cost outlier"
means, for dates of admission before August 1, 2007, a claim paid under the DRG payment method that did not meet the definition of "administrative day," and has extraordinarily high costs when compared to other claims in the same DRG. For dates of admission on and after January 1, 2001, to qualify as a high-cost outlier, the billed charges, minus the noncovered charges reported on the claim, must exceed three times the applicable DRG payment and exceed thirty-three thousand dollars. The department's high-cost outliers are not applicable for dates of admission on and after July 1, 2007. "High outlier claim--Medicaid/SCHIP DRG"
means, for dates of admission on and after August 1, 2007, a claim paid under the DRG payment method that does not meet the definition of "administrative day," and has extraordinarily high costs as determined by the department. See WAC 388-550-3700
. "High outlier claim--Medicaid/SCHIP per diem"
means, for dates of admission on and after August 1, 2007, a claim that is classified by the department as being allowed a high outlier payment that is paid under the per diem payment method, does not meet the definition of "administrative day," and has extraordinarily high costs as determined by the department. See WAC 388-550-3700
. "High outlier claim--State-administered program DRG"
means, for dates of admission on and after August 1, 2007, a claim paid under the DRG payment method that does not meet the definition of "administrative day," and has extraordinarily high costs as determined by the department. See WAC 388-550-3700
. "High outlier claim--State-administered program per diem"
means, for dates of admission on or after August 1, 2007, a claim that is classified by the department as being allowed as a high outlier payment, that is paid under the per diem payment method, does not meet the definition of "administrative day," and has extraordinarily high costs as determined by the department. See WAC 388-550-3700
means a medically directed, interdisciplinary program of palliative services for terminally ill clients and the clients' families. Hospice is provided under arrangement with a Washington state-licensed and Title XVIII-certified Washington state hospice. "Hospital"
means an entity that is licensed as an acute care hospital in accordance with applicable state laws and regulations, or the applicable state laws and regulations of the state in which the entity is located when the entity is out-of-state, and is certified under Title XVIII of the federal Social Security Act. The term "hospital" includes a medicare or state-certified distinct rehabilitation unit or a "psychiatric hospital" as defined in this section. "Hospital base period"
means, for purposes of establishing a provider rate, a specific period or timespan used as a reference point or basis for comparison. "Hospital base period costs"
means costs incurred in, or associated with, a specified base period. "Hospital conversion factor"
means a hospital-specific dollar amount that reflects the average cost for a DRG paid case of treating medicaid and SCHIP clients in a given hospital. See cost-based conversion factor (CBCF) and negotiated conversion factor (NCF). "Hospital covered service"
means a service that is provided by a hospital, covered under a medical assistance program and is within the scope of an eligible client's medical assistance program. "Hospital cost report" -
See "cost report." "Hospital dispute resolution conference"
means an informal meeting for deliberation during a provider administrative appeal. For provider audit appeals, see chapter 388-502A
WAC. For provider rate appeals, see WAC 388-501-0220
. "Hospital market basket index"
means a measure, expressed as a percentage, of the annual inflationary costs for hospital services measured by Global Insight's Data Resources, Inc. (DRI) and identified as the CMS PPS input price index. "Hospital peer group"
means the peer group categories established by the department for classification of hospitals:
(1) Peer Group A - Hospitals identified by the department as rural hospitals (excludes all rural hospitals paid by the certified public expenditure (CPE) payment method and critical access hospital (CAH) payment method);
(2) Peer Group B - Hospitals identified by the department as urban hospitals without medical education programs (excludes all hospitals paid by the CPE payment method and CAH payment method);
(3) Peer Group C - Hospitals identified by the department as urban hospitals with medical education programs (excludes all hospitals paid by the CPE payment method and CAH payment method);
(4) Peer Group D - Hospitals identified by the department as specialty hospitals and/or hospitals not easily assignable to the other five peer groups;
(5) Peer Group E - Hospitals identified by the department as public hospitals participating in the "full cost" public hospital certified public expenditure (CPE) payment program; and
(6) Peer Group F - Hospitals identified by the department of health (DOH) as CAHs, and paid by the department using the CAH payment method. "Hospital selective contracting program"
or "selective contracting"
means for dates of admission before July 1, 2007, a negotiated bidding program for hospitals within specified geographic areas to provide inpatient hospital services to medical assistance clients. The department's hospital selective contracting program no longer exists for dates of admission on and after July 1, 2007. "Indirect medical education costs"
means the indirect costs of providing an approved medical residency program as recognized by medicare. "Inflation adjustment"
means, for cost inflation, the hospital inflation adjustment. This adjustment is determined by using the inflation factor method supported by the legislature. For charge inflation, it means the inflation factor determined by comparing average discharge charges for the industry from one year to the next, as found in the comprehensive hospital abstract reporting system (CHARS) standard reports three and four. "Informed consent"
means that an individual consents to a procedure after the provider who obtained a properly completed consent form has done all of the following:
(1) Disclosed and discussed the patient's diagnosis;
(2) Offered the patient an opportunity to ask questions about the procedure and to request information in writing;
(3) Given the patient a copy of the consent form;
(4) Communicated effectively using any language interpretation or special communication device necessary per 42 C.F.R. 441.257; and
(5) Given the patient oral information about all of the following:
(a) The patient's right to not obtain the procedure, including potential risks, benefits, and the consequences of not obtaining the procedure;
(b) Alternatives to the procedure including potential risks, benefits, and consequences; and
(c) The procedure itself, including potential risks, benefits, and consequences. "Inpatient hospital"
means a hospital authorized by the department of health to provide inpatient services. "Inpatient hospital admission"
means an admission to a hospital based on an evaluation of the client using objective clinical indicators for the purpose of providing medically necessary inpatient care, including assessment, monitoring, and therapeutic services as required to best manage the client's illness or injury, and that is documented in the client's health record. "Inpatient medicaid conversion factor"
means a dollar amount that represents selected hospitals' average costs of treating medicaid and SCHIP clients. The conversion factor is a rate that is multiplied by a DRG relative weight to pay medicaid and SCHIP claims under the DRG payment method. See WAC 388-550-3450
for how this conversion factor is calculated. "Inpatient services"
means health care services provided directly or indirectly to a client subsequent to the client's inpatient hospital admission and prior to discharge. ["]Inpatient state-administered program conversion factor"
means a dollar amount used as a rate reduced from the inpatient medicaid conversion factor to pay a hospital for inpatient services provided to a client eligible under a state-administered program. The conversion factor is multiplied by a DRG relative weight to pay claims under the DRG payment method. "Intermediary" -
See "fiscal intermediary." "International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) Edition"
means the systematic listing that transforms verbal descriptions of diseases, injuries, conditions and procedures into numerical or alpha numerical designations (coding). "Length of stay (LOS)"
means the number of days of inpatient hospitalization, calculated by adding the total number of days from the admission date to the discharge date, and subtracting one day. "Length of stay extension request"
means a request from a hospital provider for the department, or in the case of psychiatric admission, the appropriate mental health division designee, to approve a client's hospital stay exceeding the average length of stay for the client's diagnosis and age. "Lifetime hospitalization reserve"
means, under the medicare Part A benefit, the nonrenewable sixty hospital days that a beneficiary is entitled to use during his or her lifetime for hospital stays extending beyond ninety days per benefit period. See also "reserve days." "Long term acute care (LTAC) services"
means inpatient intensive long-term care services provided in department-approved LTAC hospitals to eligible medical assistance clients who meet criteria for level 1 or level 2 services. See WAC 388-550-2565
. "Low-cost outlier"
means a case having a date of admission before August 1, 2007, with extraordinarily low costs when compared to other cases in the same DRG. For dates of admission on and after January 1, 2001, to qualify as a low-cost outlier, the allowed charges must be less than the greater of ten percent of the applicable DRG payment or four hundred and fifty dollars. The department's low-cost outliers are not applicable for dates of admission on and after August 1, 2007. "Low income utilization rate (LIUR)"
means a rate determined by a formula represented as (A/B)+(C/D) in the same period in which:
(1) The numerator A is the hospital's total patient services revenue under the state plan, plus the amount of cash subsidies for patient services received directly from state and local governments;
(2) The denominator B is the hospital's total patient services revenue (including the amount of such cash subsidies);
(3) The numerator C is the hospital's total inpatient service charge attributable to charity care, less the portion of cash subsidies described in (1) of this definition in the period reasonably attributable to inpatient hospital services. The amount shall not include contractual allowances and discounts (other than for indigent patients not eligible for medical assistance under the state plan); and
(4) The denominator D is the hospital's total charge for inpatient hospital services. "Major diagnostic category (MDC)"
means one of the mutually exclusive groupings of principal diagnosis areas in the AP-DRG classification system. The diagnoses in each MDC correspond to a single major organ system or etiology and, in general, are associated with a particular medical specialty. "Market basket index" -
See "hospital market basket index." "MDC" -
See "major diagnostic category." "Medicaid cost proxy"
means a figure developed to approximate or represent a missing cost figure. "Medicaid inpatient utilization rate (MIPUR)"
means a ratio expressed by the following formula represented as X/Y in which:
(1) The numerator X is the hospital's number of inpatient days attributable to patients who (for such days) were eligible for medical assistance under the state plan in a period.
(2) The denominator Y is the hospital's total number of inpatient days in the same period as the numerator's. Inpatient day includes each day in which an individual (including a newborn) is an inpatient in the hospital, whether or not the individual is in a specialized ward and whether or not the individual remains in the hospital for lack of suitable placement elsewhere. "Medical assistance administration (MAA)"
means the health and recovery services administration (HRSA), or a successor administration, within the department authorized by the department's secretary to administer the acute care portion of the Title XIX medicaid, Title XXI state children's health insurance program (SCHIP), and other medical assistance programs, with the exception of certain nonmedical services for persons with chronic disabilities. "Medical assistance program"
means any health care program administered through HRSA. "Medical care services"
means the state-administered limited scope of care provided to general assistance-unemployable (GAU) recipients, and recipients of alcohol and drug addiction services provided under chapter 74.50
RCW. "Medical education costs"
means the expenses incurred by a hospital to operate and maintain a formally organized graduate medical education program. "Medical screening evaluation"
means the service(s) provided by a physician or other practitioner to determine whether an emergent medical condition exists. "Medical stabilization"
means a return to a state of constant and steady function. It is commonly used to mean the patient is adequately supported to prevent further deterioration. "Medicare cost report"
means the medicare cost report (Form 2552-96), or successor document, completed and submitted annually by a hospital provider:
(1) To medicare intermediaries at the end of a provider's selected fiscal accounting period to establish hospital reimbursable costs for per diem and ancillary services; and
(2) To medicaid to establish appropriate DRG and other rates for payment of services rendered. "Medicare crossover"
means a claim involving a client who is eligible for both medicare benefits and medicaid. "Medicare fee schedule (MFS)"
means the official CMS publication of medicare policies and relative value units for the resource based relative value scale (RBRVS) payment program. "Medicare Part A"
see WAC 388-500-0005
. "Medicare Part B"
see WAC 388-500-0005
. "Medicare buy-in premium" -
See "buy-in premium." "Medicare payment principles"
means the rules published in the federal register regarding payment for services provided to medicare clients. "Mental health division designee"
or "MHD designee"
means a professional contact person authorized by MHD, who operates under the direction of a regional support network (RSN) or a prepaid inpatient health plan (PIHP). See WAC 388-550-2600
. "Mentally incompetent"
means a person who has been declared mentally incompetent by a federal, state, or local court of competent jurisdiction. "Multiple occupancy rate"
means the rate customarily charged for a hospital room with two to four patient beds. "National drug code (NDC)"
means the eleven digit number the manufacturer or labeler assigns to a pharmaceutical product and attaches to the product container at the time of packaging. The eleven-digit NDC is composed of a five-four-two grouping. The first five digits comprise the labeler code assigned to the manufacturer by the Federal Drug Administration (FDA). The second grouping of four digits is assigned by the manufacturer to describe the ingredients, dose form, and strength. The last grouping of two digits describes the package size. "Negotiated conversion factor (NCF)"
means, for dates of admission before July 1, 2007, a negotiated hospital-specific dollar amount which is used in lieu of the cost-based conversion factor as the multiplier for the applicable DRG weight to determine the DRG payment for a selective contracting program hospital. See also "hospital conversion factor"
and "cost-based conversion factor."
The department's hospital selective contracting program no longer exists for dates of admission on and after July 1, 2007. "Newborn"
means a person younger than twenty-nine days old. However, a person who has been admitted to an acute care hospital setting as a newborn and is transferred to another acute care hospital setting is still considered a newborn for payment purposes. "Nonallowed service or charge"
means a service or charge that is not recognized for payment by the department, and cannot be billed to the client except under the conditions identified in WAC 388-502-0160
. "Noncontract hospital"
means, for dates of admission before July 1, 2007 a licensed hospital located in a selective contracting area (SCA) but which does not have a contract to participate in the hospital selective contracting program. The department's hospital selective contracting program no longer exists for dates of admission on and after July 1, 2007. "Noncovered charges"
means billed charges submitted to the department by a provider on a claim that are indicated by the provider on the claim as noncovered. "Noncovered service or charge"
means a service or charge that is not considered or paid by the department as a "hospital covered service," and cannot be billed to the client except under the conditions identified in WAC 388-502-0160
. "Nonemergency hospital admission"
means any inpatient hospitalization of a patient who does not have an emergent medical condition, as defined in WAC 388-500-0005
. "Nonparticipating hospital"
means a noncontract hospital. See "noncontract hospital." "Observation services"
means health care services furnished by a hospital on the hospital's premises, including use of a bed and periodic monitoring by hospital staff, which are reasonable and necessary to evaluate an outpatient's condition or determine the need for possible admission to the hospital as an inpatient. "Operating costs"
means all expenses incurred in providing accommodation and ancillary services, excluding capital and medical education costs. "OPPS" -
See "outpatient prospective payment system." "OPPS adjustment"
means the legislative mandated reduction in the outpatient adjustment factor made to account for the delay of OPPS implementation. "OPPS outpatient adjustment factor"
means the outpatient adjustment factor reduced by the OPPS and adjustment factor as a result of legislative mandate. "Orthotic device"
means a corrective or supportive device that:
(1) Prevents or corrects physical deformity or malfunction; or
(2) Supports a weak or deformed portion of the body. "Out-of-state hospital"
means any hospital located outside the state of Washington and outside the designated bordering cities in Oregon and Idaho (see WAC 388-501-0175
). For medical assistance clients requiring psychiatric services, "out-of-state hospital" means any hospital located outside the state of Washington. "Outlier set-aside factor"
means the amount by which a hospital's cost-based conversion factor is reduced for payments of high cost outlier cases. The department's outlier set-aside factor is not applicable for dates of admission on and after August 1, 2007. "Outlier set-aside pool"
means the total amount of payments for high cost outliers which are funded annually based on payments for high cost outliers during the year. The department's outlier set-aside pool is not applicable for dates of admission on and after August 1, 2007. "Outliers"
means cases with extraordinarily high or low costs when compared to other cases in the same DRG. "Outpatient"
means a patient who is receiving health care services in other than an inpatient hospital setting. "Outpatient care"
means health care provided other than inpatient services in a hospital setting. "Outpatient hospital"
means a hospital authorized by the department of health to provide outpatient services. "Outpatient hospital services"
means those health care services that are within a hospital's licensure and provided to a client who is designated as an outpatient. "Outpatient observation" -
See "observation services." "Outpatient prospective payment system (OPPS)"
means the payment system used by the department to calculate reimbursement to hospitals for the facility component of outpatient services. This system uses ambulatory payment classifications (APCs) as the primary basis of payment. "Outpatient short stay" -
See "observation services"
and "outpatient hospital services." "Outpatient surgery"
means a surgical procedure that is not expected to require an inpatient hospital admission. "Pain treatment facility"
means a department-approved inpatient facility for pain management, in which a multidisciplinary approach is used to teach clients various techniques to live with chronic pain. "Participating hospital"
means a licensed hospital that accepts department clients. "PAS length of stay (LOS)"
means, for dates of admission before August 1, 2007, the average length of an inpatient hospital stay for patients based on diagnosis and age, as determined by the commission of professional and hospital activities and published in a book entitled Length of Stay by Diagnosis, Western Region
. See also "professional activity study (PAS)." "Patient consent"
means the informed consent of the patient and/or the patient's legal guardian, as evidenced by the patient's or guardian's signature on a consent form, for the procedure(s) to be performed upon or for the treatment to be provided to the patient. "Peer group" -
See "hospital peer group." "Peer group cap"
means, for dates of admission before August 1, 2007, the reimbursement limit set for hospital peer groups B and C, established at the seventieth percentile of all hospitals within the same peer group for aggregate operating, capital, and direct medical education costs. "Per diem rate"
means a daily rate used to calculate payment for services provided as a "hospital covered service." "Personal comfort items"
means items and services which primarily serve the comfort or convenience of a client and do not contribute meaningfully to the treatment of an illness or injury. "PM&R" -
See "Acute PM&R." "Plan of treatment"
or "plan of care"
means the written plan of care for a patient which includes, but is not limited to, the physician's order for treatment and visits by the disciplines involved, the certification period, medications, and rationale indicating need for services. "PPS"
see "prospective payment system." "Primary care case management (PCCM)"
means the coordination of health care services under the department's Indian health center or tribal clinic managed care program. See WAC 388-538-068
. "Principal diagnosis"
means the condition established after study to be chiefly responsible for the admission of the patient to the hospital for care. "Principal procedure"
means a procedure performed for definitive treatment rather than diagnostic or exploratory purposes, or because it was necessary due to a complication. "Prior authorization"
means a process by which clients or providers must request and receive department or a department designee's approval for certain health care services, equipment, or supplies, based on medical necessity, before the services are provided to clients, as a precondition for payment to the provider. Expedited prior authorization and limitation extension are forms of prior authorization. "Private room rate"
means the rate customarily charged by a hospital for a one-bed room. "Professional activity study (PAS)"
means the compilation of inpatient hospital data by diagnosis and age, conducted by the commission of professional and hospital activities, which resulted in the determination of an average length of stay for patients. The data are published in a book entitled Length of Stay by Diagnosis, Western Region
. "Professional component"
means the part of a procedure or service that relies on the physician's professional skill or training, or the part of a payment that recognizes the physician's cognitive skill. "Prognosis"
means the probable outcome of a patient's illness, including the likelihood of improvement or deterioration in the severity of the illness, the likelihood for recurrence, and the patient's probable life span as a result of the illness. "Prospective payment system (PPS)"
means a system that sets payment rates for a predetermined period for defined services, before the services are provided. The payment rates are based on economic forecasts and the projected cost of services for the predetermined period. "Prosthetic device"
means a replacement, corrective, or supportive device prescribed by a physician or other licensed practitioner, within the scope of his or her practice as defined by state law, to:
(1) Artificially replace a missing portion of the body;
(2) Prevent or correct physical deformity or malfunction; or
(3) Support a weak or deformed portion of the body. "Psychiatric hospital"
means a medicare-certified distinct psychiatric unit, a medicare-certified psychiatric hospital, or a state-designated pediatric distinct psychiatric unit in a medicare-certified acute care hospital. Eastern state hospital and western state hospital are excluded from this definition. "Psychiatric indigent inpatient (PII) program"
means a state-administered program established by the department specifically for mental health clients identified in need of voluntary emergency inpatient psychiatric care by a mental health division designee. See WAC 388-865-0217
. "Psychiatric indigent person"
means a person certified by the department as eligible for the psychiatric indigent inpatient (PII) program. "Public hospital district"
means a hospital district established under chapter 70.44
means a factor used to calculate a reduction factor used to reduce medicaid level rates to determine state administered program claim payment to hospitals. "Ratio of costs-to-charges (RCC)"
means a method used to pay hospitals for some services exempt from the DRG payment method. It also refers to the factor or rate applied to a hospital's allowed covered charges for medically necessary services to determine estimated costs, as determined by the department, and payment to the hospital for some DRG-exempt services. "RCC" -
See "ratio of costs-to-charges." "Rebasing"
means the process of recalculating the conversion factors, per diems, per case rates, or RCC rates using historical data. "Recalibration"
means the process of recalculating DRG relative weights using historical data. "Regional support network (RSN)"
means a county authority or a group of county authorities recognized and certified by the department, that contracts with the department per chapters 38.52
, and 74.09
RCW and chapters275-54
, and 275-57
WAC, to manage the provision of mental health services to medical assistance clients. "Rehabilitation accreditation commission, The"
- See "CARF." "Rehabilitation units"
means specifically identified rehabilitation hospitals and designated rehabilitation units of hospitals that meet department and/or medicare criteria for distinct rehabilitation units. "Relative weights" -
See "DRG relative weights." "Remote hospitals"
means, for claims with dates of admission before July 1, 2007, hospitals that meet the following criteria during the hospital selective contracting (HSC) waiver application period:
(1) Are located within Washington state;
(2) Are more than ten miles from the nearest hospital in the HSC competitive area; and
(3) Have fewer than seventy-five beds; and
(4) Have fewer than five hundred medicaid and SCHIP admissions within the previous waiver period. "Reserve days"
means the days beyond the ninetieth day of hospitalization of a medicare patient for a benefit period or spell of illness. See also "lifetime hospitalization reserve." "Retrospective payment system"
means a system that sets payment rates for defined services according to historic costs. The payment rates reflect economic conditions experienced in the past. "Revenue code"
means a nationally-assigned coding system for billing inpatient and outpatient hospital services, home health services, and hospice services. "Room and board"
means the services a hospital facility provides a patient during the patient's hospital stay. These services include, but are not limited to, a routine or special care hospital room and related furnishings, routine supplies, dietary and nursing services, and the use of certain hospital equipment and facilities. "Rural health clinic"
means a clinic that is located in areas designed by the bureau of census as rural and by the Secretary of the Department of Health and Human Services (DHHS), as medically underserved. "Rural hospital"
means an acute care health care facility capable of providing or assuring availability of inpatient and outpatient hospital health services in a rural area. "Secondary diagnosis"
means a diagnosis other than the principal diagnosis for which an inpatient is admitted to a hospital. "Selective contracting area (SCA)"
means, for dates of admission before July 1, 2007, an area in which hospitals participate in negotiated bidding for hospital contracts. The boundaries of an SCA are based on historical patterns of hospital use by medicaid and SCHIP clients. This definition is not applicable for dates of admission on and after July 1, 2007. "Semi-private room rate"
means a rate customarily charged for a hospital room with two to four beds; this charge is generally lower than a private room rate and higher than a ward room. See also "multiple occupancy rate." "Seven-day readmission"
means the situation in which a client who was admitted as an inpatient and discharged from the hospital has returned to inpatient status to the same or a different hospital within seven days. "Special care unit"
means a department of health (DOH) or medicare-certified hospital unit where intensive care, coronary care, psychiatric intensive care, burn treatment or other specialized care is provided. "Specialty hospitals"
means children's hospitals, psychiatric hospitals, cancer research centers or other hospitals which specialize in treating a particular group of patients or diseases. "Spenddown"
means the process by which a person uses incurred medical expenses to offset income and/or resources to meet the financial standards established by the department. See chapter 388-519
WAC. "Stat laboratory charges"
means the charges by a laboratory for performing a test or tests immediately. "Stat." is the abbreviation for the Latin word "statim" meaning immediately. "State children's health insurance program (SCHIP)"
means the federal Title XXI program under which medical care is provided to uninsured children younger than age nineteen. "State plan"
means the plan filed by the department with the Centers for Medicare and Medicaid Services (CMS), Department of Health and Human Services (DHHS), outlining how the state will administer medicaid and SCHIP services, including the hospital program. "Subacute care"
means care provided to a patient which is less intensive than that given at an acute care hospital. Skilled nursing, nursing care facilities and other facilities provide subacute care services. "Surgery"
means the medical diagnosis and treatment of injury, deformity or disease by manual and instrumental operations. For reimbursement purposes, surgical procedures are those designated in CPT as procedure codes 10000 to 69999. "Swing-bed day"
means a day in which a client is receiving skilled nursing services in a hospital designated swing bed at the hospital's census hour. The hospital swing bed must be certified by the Centers for Medicare and Medicaid Services (CMS) for both acute care and skilled nursing services. "Technical component"
means the part of a procedure or service that relates to the equipment set-up and technician's time, or the part of a procedure and service payment that recognizes the equipment cost and technician time. "Tertiary care hospital"
means a specialty care hospital providing highly specialized services to clients with more complex medical needs than acute care services. "Total patient days"
means all patient days in a hospital for a given reporting period, excluding days for skilled nursing, nursing care, and observation days. "Transfer"
means to move a client from one acute care facility or distinct unit to another. "Transferring hospital"
means the hospital or distinct unit that transfers a client to another acute care facility. "Trauma care facility"
means a facility certified by the department of health as a level I, II, III, IV, or V facility. See chapter 246-976
WAC. "Trauma care service" -
See department of health's WAC 246-976-935
is the uniform billing document required for use nationally, beginning on May 23, 2007, by hospitals, nursing facilities, hospital-based skilled nursing facilities, home health agencies, and hospice agencies in billing third party payers for services provided to patients. This includes the current national uniform billing data element specifications developed by the National Uniform Billing Committee and approved and/or modified by the Washington state payer group or the department. "UB-92"
is the uniform billing document discontinued for billing claims submitted on and after May 23, 2007. "Unbundled services"
means interventions that are not integral to the major procedure and that are paid separately. "Uncompensated care" -
See "charity care." "Uniform cost reporting requirements"
means a standard accounting and reporting format as defined by medicare. "Uninsured patient"
means an individual who is not covered by insurance for provided inpatient and/or outpatient hospital services. "Usual and customary charge (UCC)"
means the charge customarily made to the general public for a health care procedure or service, or the rate charged other contractors for the service if the general public is not served. "Vendor rate increase"
means an inflation adjustment determined by the legislature, that may be used to periodically increase rates for payment to vendors, including health care providers, that do business with the state.
[11-14-075, recodified as § 182-550-1050, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090, 74.09.500. 07-14-052, § 388-550-1050, filed 6/28/07, effective 8/1/07; 04-20-057, § 388-550-1050, filed 10/1/04, effective 11/1/04. Statutory Authority: RCW 74.04.050, 74.04.057, 74.08.090, and Public Law 104-191. 03-19-043, § 388-550-1050, filed 9/10/03, effective 10/11/03. 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, § 388-550-1050, filed 7/31/01, effective 8/31/01. Statutory Authority: RCW 74.08.090, 74.09.730, 42 U.S.C. 1395 x(v), 42 C.F.R. 447.271, .11303 and .2652. 99-14-039, § 388-550-1050, filed 6/30/99, effective 7/1/99. Statutory Authority: RCW 74.08.090, 42 U.S.C. 1395 x(v), 42 C.F.R. 447.271, 447.11303, and 447.2652. 99-06-046, § 388-550-1050, filed 2/26/99, effective 3/29/99. 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, § 388-550-1050, filed 12/18/97, effective 1/18/98.]