California Code of Regulations › Title 22 - Social Security › Division 3 - Health Care Services › Subdivision 1 - California Medical Assistance Program › Chapter 3 - Health Care Services › Article 7.5 - HOSPITAL INPATIENT SERVICES REIMBURSEMENT SECTION › Section 51549 - Reimbursement Formula

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) A
					 hospital cost index (HCI) shall be established for each provider. This index
					 shall consist of an input price index (IPI) and shall contain an allowance for
					 changes in scientific and technological advancement, service intensity and
					 productivity. The allowance shall be called the Service Intensity,
					 Productivity, Scientific and Technological Advancement Factor (SIPTF).
(1) The HCI shall be calculated to account
					 for actual changes in the IPI after the close of each provider's accounting
					 period.
(2) The HCI shall be
					 multiplied by the non-pass-through portion of the provider's MIRL reimbursement
					 rate per discharge (tentative or final) for the prior fiscal period to
					 determine the non-pass-through portion of its ARPD for the settlement fiscal
					 period.
(A) The prior period shall always be
					 the base period for each settlement.
(B) For the initial base period only, the
					 non-pass-through portion of the ARPD shall be calculated as follows:
1. Step 1, add the amount of TPL for the
					 initial base period to the MIRL (lowest of 51536(a)(1)-(3)) which includes
					 amounts reimbursed under the AA and appeals process for the initial base
					 period.
2. Step 2, recalculate
					 Medi-Cal discharges for any initial base period in accordance with the
					 definition of Medi-Cal discharges contained in Section
					 51545.
a. The Department shall notify the provider
					 of the revised count of Medi-Cal discharges for the initial base
					 period.
b. The provider may file an
					 AAR on the count of Medi-Cal discharges for the initial base period only and
					 only as it is used in the settlement period MIRL. The AAR must be filed within
					 60 days of notification of the number of Medi-Cal discharges for the initial
					 base period.
c. The provider may
					 file an appeal on the Department's response to the AAR in accordance with
					 Section 51552.
3. Step 3, divide the result of step 1 by the
					 result of step 2.
4. Step 4,
					 multiply the percentage of non-pass-through costs for the initial base period
					 by the result of step 3.
5. Use the
					 result of step 4 in place of the PNPARPD in the ARPD formula in subsection (3)
					 below.
(3) The
					 ARPD shall be calculated as follows:
ARPD = PASPD + NPARPD.
= PASPD + (PNPARPD * HCI)
= (TPTC/THD) + (PNPARPD * ((AIPI * CMAF) + SIPTF))
Where ARPD = All-inclusive Rate Per Discharge.
PASPD = Pass through per discharge = TPTC/THD
TPTC = Total pass through costs in the settlement fiscal
						period
THD = Total hospital discharges in the settlement fiscal
						period.
NPARPD = Non-Pass-through All-inclusive Rate Per
						Discharge.
NPARPD = PNPARPD * HCI
PNPARPD = Prior year Non-Pass-through portion of the MIRL
						reimbursement rate per discharge which is, ((PMIRL - (PMCDIS *
						(PTPTC/PTHD)))/PMCDIS)
Where:
PMIRL = Prior fiscal period MIRL.
PMCDIS = Prior fiscal period number of Medi-Cal
						discharges.
PTPTC = Prior fiscal period total pass through
						costs.
PTHD = Prior fiscal period total hospital
						discharges
HCI = Hospital Cost Index = ((AIPI) ** (Days/730))* CMAF)
						+ (SIPTF. **(days/730))
If the prior or settlement fiscal period is long (over
						370 days) or short (under 360 days). If both fiscal periods are over 359 days
						and under 371 days HCI = (AIPI * CMAF) + SIPTF.
Where:
AIPI = Adjusted Input Price Index.
SIPTF = Allowance for Service Intensity, Productivity,
						and Scientific and Technological advancement Factor.
Days = Sum of days in the current and prior fiscal
						periods.
CMAF = Case mix adjustment factor.
* = Multiplication.
** = Exponentiation.
(4) An annual allowance for service
					 intensity, productivity and scientific and technological advancement shall be
					 added to the allowable increase in the non-pass-through portion of the ARPD, as
					 detailed in the formulas in this section. This allowance shall be in addition
					 to reimbursement for pass-through categories and shall be the net amount of
					 changes for scientific and technological advancement, productivity improvement
					 and service intensity, if any (excluding case mix), as recommended annually by
					 the prospective payment assessment commission for the Medicare PPS for all FPEs
					 during the PPS effective dates of the recommended allowance.
(5) The pass-through categories are those
					 hospital cost categories which, for purposes of tentative and final settlement,
					 are not subject to the HCI.
(6)
					 Each pass-through category is listed below:
(A) Depreciation.
(B) Rents and Leases.
(C) Interest.
(D) Property Taxes and License
					 Fees.
(E) Utility
					 Expenses.
(F) Malpractice
					 Insurance.