309-015-0025 Retrospective Settlement Rate Setting (Year End and Final) (1) Year-end settlement process. The year-end settlement process will be as follows: (a) Upon receipt of an audited Medicaid cost report from the Supervisor of the Division Audit Section, the Revenue and Rates Manager of the Institutional Revenue Section will determine a retrospective year-end settlement rate for each participating hospital, separate cost entity or distinct program within a hospital on the basis of Division review of actual allowable Medicaid costs reported in the hospital’s cost statement for the previous year; (b) The year-end settlement rate for a non-disproportionate share hospital will be calculated by using the following procedure: (A) Divide the applicable Title XIX allowable costs for each participating hospital, separate cost entity, or distinct program by the applicable number of Title XIX patient days, including therapeutic leave days; (B) If the hospital has more than one distinct program, divide the applicable Medicaid allowable costs by the applicable number of Medicaid patient days, including therapeutic leave days for each program. Then determine the weighted average Medicaid settlement rate for the entire hospital. This is accomplished by multiplying each proposed year-end settlement rate by Medicaid patient days for that rate, adding the products together, and dividing the resulting sum by total Medicaid patient days for the hospital; (C) If the year-end Medicaid settlement rate or the average year-end Medicaid settlement rate from above is less than the maximum allowable Medicaid rate for psychiatric hospitals during the current fiscal year, use the lower rate; (D) If the year-end Medicaid settlement rate or the average year-end settlement rate from above exceeds the maximum allowable rate established for psychiatric hospitals during the current fiscal year, use the maximum allowable rate as the retrospective year-end settlement rate for the hospital. (c) The year-end settlement rate may exceed the maximum allowable rate if the Division determines the hospital meets the criteria listed in OAR 309-015-0035(5) as a disproportionate share hospital; (d) In that case, the disproportionate share adjusted year-end settlement rate will be calculated as follows: (A) Actual costs up to 135 percent of the maximum allowable rate; or (B) Actual costs up to 100 percent of the cost of uncompensated care during the facility’s previous fiscal year, subject to a disproportionate share allotment established yearly by the Health Care Financing Administration, if the psychiatric hospital has a low-income rate of 60 percent and also receives 60 percent or more of its service revenue from any combination of the following: (i) Public funds, excluding Medicare and Medicaid; (ii) Bad debts; or (iii) Free care. (e) The year-end settlement will be determined by multiplying the settlement “rate” calculated above by the total number of Medicaid patient days, including therapeutic leave days or, for disproportionate share hospitals, multiplying the disproportionate share adjusted rate by the total number of Medicaid patient days, including therapeutic leave days. The result will be compared to the amount of reimbursement paid to the hospital during the fiscal period. If the result favors the hospital, the Division will pay the difference to the hospital. If the result favors the Division, the hospital will pay the difference to the Division. In either case, payments shall be made within 30 days approval of the year-end Medicaid cost report by the Medicaid Intermediary. (2) Final settlement process. The final settlement process will be as follows: (a) Upon receipt of the final Medicare Cost Report from the Medicare Intermediary, the hospital provider will prepare the final Medicaid cost report. The Medicaid report will reflect all relevant adjustments made to the Medicare cost report; (b) Using the final Medicaid cost report developed in subsection (a) of this section, the Division will calculate the final settlement rate and settlement for each participating hospital, separate cost entity or distinct program within a hospital, following the steps outlined in subsections (1)(a) through (d) of this rule. (3) Upon completion of each settlement, both year-end and final, the Division will review the disproportionate share costs and make any necessary adjustments to quarterly disproportionate share payments. The Division will review all factors relevant to the disproportionate share payments, including actual costs of services, amounts already paid and charges reimbursed from other sources during the time period included in the Medicaid cost settlement. Statutory/Other Authority: ORS 413.042 Statutes/Other Implemented: ORS 414.025 & 414.065 History: MHD 2-1994, f. & cert. ef. 2-24-94 MHD 12-1990, f. & cert. ef. 10-15-90 MHD 6-1989, f. & cert. ef. 11-17-89 MHD 7-1987, f. & ef. 12-30-87 MHD 21-1983, f. & ef. 12-5-83 MHD 17-1983(Temp), f. 9-30-83, ef. 10-1-83