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 51545 - Definitions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The following
					 definitions are applicable to Article 7.5 only unless otherwise specified in
					 another section:
(1) Administrative
					 Adjustment (AA) means the adjustment to a provider's PIRL in response to a
					 provider's administrative adjustment request (AAR).
(2) Administrative Adjustment Request (AAR)
					 means the provider's request for changes to the PIRL, which includes both the
					 all-inclusive rate per discharge limitation (ARPDL) and peer grouping rate per
					 discharge limitation (PGRPDL).
(3)
					 Aligned ARPDs means the modified ARPDs which have been adjusted to estimate
					 their value as of a common fiscal period ending for the purpose of computing
					 the 60th percentile for the PGRPDL.
(4) All-Inclusive Rate Per Discharge (ARPD)
					 means the per discharge dollar limit on Medi-Cal reimbursable costs prior to
					 the application of the peer grouping inpatient reimbursement limitation (PIRL).
					 The ARPD excludes return on owner's equity, disproportionate share payments and
					 reductions for third-party liability (TPL), as referenced in applicable parts
					 of 42 CFR, Part 413 and HCFA Publication 15-1.
(5) All-Inclusive Rate Per Discharge
					 Limitation (ARPDL) means a Medi-Cal inpatient reimbursement limit (MIRL) which
					 is the all-inclusive rate per discharge (ARPD) multiplied by the number of
					 Medi-Cal discharges. The ARPDL excludes return on owner's equity,
					 disproportionate share payments and reductions for TPL, as referenced in
					 applicable parts of 42 CFR, Part 413 and HCFA Publication 15-1.
(6) Allowable Rate Per Discharge (ARPD) means
					 all-inclusive rate per discharge (ARPD).
(7) Atypical Case means Cost Outliers or Day
					 Outliers.
(8) Base Period shall be
					 for fiscal periods which begin on or after the effective date of Sections
					 51545 through
					 51557, the FPE immediately prior
					 to the settlement period.
(9) Base
					 Year means Base Period.
(10) Burden
					 of Going Forward means the responsibility of a party to be the first one to
					 present its evidence with respect to a particular issue.
(11) Burden of Proof means the responsibility
					 of proving, by a preponderance of the evidence, the existence or nonexistence
					 of each fact which is essential to demonstrate that a party's position
					 regarding a disputed issue is correct.
(12) Case Mix means the mix in terms of the
					 diagnosis related groups (DRGs) of the Medi-Cal patients served by the
					 provider.
(13) Case Mix Index means
					 an index that measures the average level of health care needed by a provider's
					 Medi-Cal patients.
(14) Charitable
					 Research Hospital means a provider which accepts catastrophically ill patients
					 by referral only, has over 33 percent of their Gross Operating Expense (GOE) as
					 charity care, over 1 percent of their GOE for research and has no obstetrics or
					 nursery.
(15) Children's Hospital
					 means in accordance with Section
					 14087.2 of the W&I Code, those
					 hospitals where 30 percent of the infants and children served by the single
					 institution qualify for Medi-Cal payment systems and the institution serves
					 primarily children.
(16) Contract
					 Services Costs means costs related to services provided that are covered by a
					 contract with the Department for care of Medi-Cal inpatients, per W&I Code
					 Section 14081.
(17) Contract Hospital means a provider that
					 contracts with the Department, based on negotiations with the California
					 Medical Assistance Commission (CMAC) in accordance with W&I Code Section
					 14081.
(18) Cost Outliers means those patients who
					 have extraordinarily higher inpatient costs as identified by the cost outlier
					 formulas in Section
					 51551.
(19) Cost Report means a report required by
					 the Department and completed by the provider to determine the Medi-Cal
					 Program's share of the provider's reasonable costs in accordance with
					 applicable parts of 42 CFR, Part 413 and HCFA Publication 15-1.
(20) County Appropriations means the amount
					 appropriated to the provider from the county general fund or other county
					 sources for operating deficits or other operating needs. If a county hospital
					 repays the county any portion of the appropriations, the repayment must be
					 abated against current fiscal period appropriations.
(21) Customary Charges, as specified in
					 applicable parts of 42 CFR, Part 413 and HCFA Publication 15-1, means those
					 uniform charges allowed by Medi-Cal which are listed in a provider's
					 established charge schedule which is in effect and applied consistently to most
					 patients and recognized for program reimbursement.
(22) Crossover Patients means hospital
					 inpatients who are eligible for both Medi-Cal and Medicare.
(23) Current Fiscal Settlement Period means
					 the provider's accounting year for which a peer group inpatient reimbursement
					 limitation (PIRL) is being determined.
(24) Day Outliers means those patients whose
					 stay in the hospital is extraordinarily longer as identified by the day outlier
					 formulas in Section
					 51551.
(25) Department means the California State
					 Department of Health Services.
(26)
					 Depreciation and Amortization means those amounts which represent portions of
					 the depreciable or amortizable asset's cost or other basis which is allocable
					 to a period of operation.
(27)
					 Diagnosis Related Group (DRG) means a group identified by certain clinically
					 coherent types of patients who should have similar resource consumption within
					 each of the universe of DRGs used in the Medicare Prospective Payment System
					 (PPS), in accordance with applicable parts of 42 CFR, Part 413 and HCFA
					 Publication 15-1.
(28) Discharge
					 means the termination of lodging and a formal release of an inpatient by a
					 provider. Deaths are counted as inpatient discharges. See Medi-Cal
					 Discharge.
(29) Disproportionate
					 Share Hospital means a provider whose Medicaid inpatient utilization rate (as
					 defined in Section
					 1923(b)(2) of the
					 Social Security Act) is at least one standard deviation above the mean Medicaid
					 inpatient utilization rate for providers receiving Medicaid payments in the
					 State, or where the providers's low income utilization rate (as defined in
					 Section 1923(b)(3) of the
					 Social Security Act) exceeds 25 percent.
(30) Economically and Efficiently Operated
					 Providers means providers whose costs do not exceed the PIRL except for those
					 costs that are otherwise found allowable by an AA or Formal Appeal
					 process.
(31) Employee Benefits
					 means the direct operating costs related to employee benefits consisting of
					 FICA; State Unemployment Insurance (SUI) and Federal Unemployment Insurance
					 (FUI); vacation, holiday, and sick leave; group health insurance; group life
					 insurance; pension and retirement; workers' compensation insurance; other
					 payroll related employee benefits; and, other non-payroll related employee
					 benefits.
(32) Employee Benefits
					 Index means the factor resulting from the adjusted comparison of settlement
					 period employee benefits expense to prior period employee benefits
					 expense.
(33) Exempt Reimbursement
					 means reimbursement not included in, or subject to limitation by the PIRL.
					 These costs are limited to return on owner's equity and disproportionate share
					 payments.
(34) Extraordinary and
					 Unusual Events means an event of a sudden, unexpected, or unusual nature; e.g.,
					 avalanche, floods, earthquakes or other similar events whose circumstances are
					 unavoidable regardless of the level of prudence exercised by the
					 provider.
(35) Factor Input Price
					 means the same as the Input Price Index.
(36) Final Peer Group Inpatient Reimbursement
					 Limitation (PIRL) Settlement means a Departmental determination of liabilities
					 owed resulting from a PIRL calculation based upon data audited or otherwise
					 considered true and correct by the Department for the final settlement fiscal
					 period, pursuant to the W & I Code Section
					 14170.
(37) Fiscal Period Ending (FPE) means the
					 last day of a provider's fiscal period. A fiscal period is an accounting period
					 established by the provider. The fiscal period is generally a twelve (12)
					 consecutive month period; however, in some instances may be less than or exceed
					 twelve (12) months.
(38) Fixed
					 Costs means an operating expense or a class of operating expenses as a class,
					 that does not vary with patient volume. Fixed costs are not fixed in the sense
					 that they do not fluctuate or vary, but fluctuate or vary from causes
					 independent of patient volume.
(39)
					 Food Service Expense means those expenses for services and supplies related to
					 the food service categories of: kitchen, dietary, and cafeteria.
(40) Formal Appeal means the provider's
					 appeal of the Department's decision on an AAR concerning a final PIRL
					 calculation.
(41) Formula Relief
					 means changes in the ARPD that will carry forward into the next fiscal period's
					 ARPD calculation.
(42) Gross
					 Operating Expense (GOE) means the total operating expenses of the provider.
					 This includes all expenses incurred in conducting the ordinary major activities
					 of the provider inclusive of daily hospital services, ancillary services,
					 research, education, general services, fiscal services and administrative
					 services, including the physician professional component.
(43) Initial Base Period means the last
					 fiscal period for each provider ending prior to the effective date of Sections
					 51545 through
					 51557.
(44) Input Price Index (IPI) means the
					 weighted computation resulting in the reimbursable change in the prices of
					 goods and services purchased by the providers (except for pass-throughs). The
					 IPI shall consist of a market basket classification of goods and services
					 purchased by providers, a corresponding set of market basket weights derived
					 from each provider's own mix of purchased goods and services, and a related
					 series of price indicators.
(45)
					 Interim Payment Rate means the rate paid to a provider, expressed as a
					 percentage, derived by the PIRL divided by provider's charges.
(46) Interest on Working Capital means a cost
					 representing all interest incurred on borrowings for working capital purposes
					 or interest on an unpaid tax liability.
(47) Interest, All Other means a cost
					 representing all interest incurred for borrowings other than interest on
					 working capital.
(48) Leases and
					 Rents Costs means costs representing lease and rental expenses relating to
					 occupying or using buildings, leasehold improvements and fixed assets not owned
					 by the provider and not directly assignable to another cost center.
(49) Length of Stay Outliers means Day
					 Outliers.
(50) Licenses and Taxes
					 Costs means costs representing all license expenses and all taxes (other than
					 tax on income).
(51) Malpractice
					 Insurance (Hospital and Professional) Costs means costs representing liability
					 insurance expenses, including premiums paid for physicians, the deductibles
					 paid on claims, or the actuarially determined cost of self-insurance.
(52) Maximum Inpatient Reimbursement
					 Limitation (MIRL) means the lowest of the following:
(A) Customary charges.
(B) Allowable costs determined by the
					 Department, in accordance with applicable Medicare standards and principles of
					 cost based reimbursement, as specified in applicable parts of 42 CFR, Part 413
					 and HCFA Publication 15-1.
(C) ARPD
					 limitation.
(53) Medi-Cal
					 Discharges means those discharges where the inpatient services provided were
					 covered by Medi-Cal for a Medi-Cal eligible beneficiary. This includes deaths,
					 and eligible beneficiaries whose Medi-Cal covered services were paid in full or
					 in part by third parties, if Medi-Cal was also billed for the services. Late
					 paid claims where the patients' statistics were not included in the cost or
					 audit report used to derive the PIRL and well newborns shall not be counted as
					 Medi-Cal discharges. However, a well newborn whose mother is not eligible for
					 Medi-Cal shall be counted as a discharge if the newborn is eligible for
					 Medi-Cal. Medicare crossover patients are not counted as Medi-Cal discharges if
					 Medi-Cal paid only for any applicable deductibles and copayments.
(54) MIRL Reimbursement Rate Per Discharge
					 means the per discharge reimbursement amount under the MIRL, which has not been
					 reduced for third-party liability, excluding any one-time relief, return on
					 owner's equity and any disproportionate share payments. It is calculated by
					 dividing the MIRL by the number of Medi-Cal discharges.
(55) New Hospital means any hospital:
(A) Which has a complete new physical plant
					 that is less than three years of age and is not on the same or an adjacent
					 property as the old physical plant; or
(B) Under new ownership, or resuming
					 operations for the first time after a 12-month period (i.e. was closed for at
					 least 12 months prior to being reopened under new ownership); or
(C) Which has operated under present and all
					 previous ownerships for less than three years.
(56) New Service means an additional service
					 developed and implemented by a Medi-Cal provider, to furnish and maintain
					 quality inpatient hospital care to a patient population inclusive of Medi-Cal
					 recipients.
(57) Newborn means an
					 infant born in the hospital or delivered outside the hospital and admitted to
					 the hospital shortly after birth.
(58) Noncontract Hospital means a provider
					 that does not have a negotiated contract with the Department to provide medical
					 care for Medi-Cal beneficiaries, pursuant to W & I Code Section
					 14081.
(59) Noncontract Service Costs means costs
					 related to services provided to Medi-Cal inpatients, which are excluded from
					 the provider's contract with the Department.
(60) Non-Pass-Through Costs means costs which
					 are subject to the hospital cost index, as found in Section
					 51549.
(61) OSHPD means the Office of Statewide
					 Health Planning and Development.
(62) One-Time Relief means changes in the
					 ARPDL which only affect the settlement period and are not carried forward into
					 the next settlement period ARPDL.
(63) OSHPD Accounting and Disclosure System
					 means a uniform accounting and disclosure system designed by OSHPD.
(64) Outliers means Cost Outliers and Day
					 Outliers.
(65) Partial Period
					 Contracting Hospital means a contract hospital with a contract which covers
					 only a partial fiscal period.
(66)
					 Partially Contracting Hospital means a contract hospital with a contract that
					 does not include all Medi-Cal covered services.
(67) Pass-Through Costs means cost categories
					 for purposes of the ARPDL that are not subject to the hospital cost index. The
					 categories are limited to: depreciation, rents, leases, interest, property tax,
					 license fees, utilities and malpractice insurance, as defined in Section
					 51549.
(68) Per Diem means a daily rate paid for
					 hospital services provided to Medi-Cal beneficiaries.
(69) Peer Group means a group of hospitals
					 with similar characteristics that are grouped together for purposes of
					 determining reimbursement limitations.
(70) Peer Grouping Inpatient Reimbursement
					 Limitation (PIRL) means the lowest of the following:
(A) Customary charges.
(B) Allowable costs determined by the
					 Department, in accordance with applicable Medicare standards and principles of
					 cost based reimbursement, as specified in applicable parts of 42 CFR, Part 413
					 and HCFA Publication 15-1.
(C)
					 ARPDL.
(D) PGRPDL.
If a provider is exempt from the peer group limits, the
						Medi- Cal reimbursement limitation will be the lowest of (A), (B) or (C),
						identified above. All references to PIRL include
						MIRL.
(71) Peer
					 Grouping Rate Per Discharge Limitation (PGRPDL) means a Medi-Cal inpatient
					 reimbursement limit. The PGRPDL excludes return on owner's equity,
					 disproportionate share payments and reductions for third-party liability. The
					 PGRPDL is the 60th percentile ARPD of each provider's peer group multiplied by
					 the provider's number of Medi-Cal discharges.
(72) Pharmacy Expense means those expenses
					 for services and supplies related to the pharmacy. The cost of drugs dispensed
					 to inpatients are also included in this category.
(73) Primary Health Service Hospital means a
					 provider that is either (1) located outside of a standard metropolitan
					 statistical area, and located at least 15 miles from another licensed acute
					 care hospital, and has 60 or fewer acute care beds; or (2) is located at least
					 20 miles from any other licensed acute care hospital, and has 60 or fewer acute
					 care beds; or (3) be the only licensed acute care hospital in the county, and
					 has fewer than 100 acute care beds as defined by Health and Safety Code Section
					 1339.9.
(74) Prior Fiscal Period means the most
					 recent fiscal period ending prior to the period in which a PIRL is being
					 determined.
(75) Productive Hours
					 means the total paid hours less hours not on the job. Hours not on the job
					 include: vacation time; sick time; holidays; and other paid time off.
(76) Productive Salaries means the total
					 direct payroll costs for productive hours related to a given
					 classification.
(77) Professional
					 Fees means fees for professional services consisting of medical (therapist and
					 others); consulting and management fees; legal; audits; registry nurses and
					 contracted services.
(78) Provider
					 means an institution in California that furnishes inpatient hospital services
					 to Medi-Cal beneficiaries.
(79)
					 Purchased Services means costs related to services purchased from outside
					 contractors.
(80) Rate Per
					 Discharge means ARPD.
(81)
					 Reasonable Costs means reimbursable costs as defined by 42 CFR, Part 413 and
					 HCFA Publication 15-1.
(82)
					 Recalculated Final PIRL Settlement means a final PIRL settlement which has been
					 recalculated.
(83) Reimbursable
					 Costs means those costs that are reimbursed as determined by the
					 PIRL.
(84) Replacement Service
					 means a newly implemented service which replaces another service in whole or in
					 part.
(85) Rural Hospitals means
					 consistent with Section
					 1188.855
					 of the Health and Safety Code, an acute care hospital which meets the criteria
					 within peer group six (rural hospitals) as defined in the report entitled,
					 "Hospital Peer Grouping for Efficiency Comparison" dated December 20,
					 1982.
(86) Salaries and Wages means
					 the direct operating costs related to salaries and wages, consisting of:
					 management and supervision; technicians and specialists; registered nurses;
					 licensed vocational nurses; aides and orderlies; clerical and other
					 administrative; environmental and food services; non-physician medical
					 practitioners; and other salaries and wages. Those salaries and wages related
					 to students from the medical education centers as well as physicians are not
					 included here.
(87) Salary and Wage
					 Index means the factor which is defined as part of the calculations in Section
					 51549(b)(2)(A)1.
(88) Second Level Appeal means Formal
					 Appeal.
(89) Service Intensity
					 means changes in the character of the services provided to each patient
					 including but not limited to: changes in applicable technology; qualitative and
					 quantitative changes in: personnel; supplies; drugs; and other materials.
					 Service intensity does not include changes in the types of patients and
					 illnesses treated.
(90) Settlement
					 Fiscal Period means the provider's accounting period for which a PIRL
					 settlement is being or has been conducted.
(91) Sixtieth Percentile means the point at
					 which sixty percent (60%) will be below in any given group arrayed in
					 order.
(92) Sixtieth Percentile
					 ARPD means the maximum reimbursement per discharge under the PGRPDL system. It
					 is the sixtieth percentile rate per discharge for each peer group.
(93) Sole Community Hospital is defined in
					 42 USC, Section
					 1395ww(d)(5)(C)(iii).
(94) Student and Physician Professional Fees
					 means fees charged for the professional services provided to patients by
					 hospital-based physicians and students. These do not include those fees related
					 to the education, research and administrative duties performed by the
					 hospital-based physicians.
(95)
					 Student and Physician Salaries and Wages means the compensation (exclusive of
					 in-service education), of students in teaching programs and physicians
					 including such items as research, education program activities, general
					 hospital administration, patient care and supervision.
(96) Tentative PIRL Settlement means the
					 Department's determination of liabilities owed, resulting from a PIRL or MIRL
					 calculation using unaudited cost report data provided by a provider.
(97) Third-Party Liability (TPL) means amount
					 owed for hospital inpatient services on behalf of a Medi-Cal eligible
					 beneficiary by any payor other than Medi-Cal.
(98) Total Hospital Gross Revenue means the
					 amount of total charges for services rendered to all patients.
(99) Total Medi-Cal Gross Revenue means the
					 amount of charges to Medi-Cal for services rendered to Medi-Cal eligible
					 patients.
(100) Total Paid Hours
					 means the sum of the productive hours and the vacation time, sick time,
					 holidays, and other paid time off for all employee classes related to daily
					 hospital services, ancillary services, general services; fiscal services; and
					 administrative services.
(101)
					 Utilities means the direct expenses, excluding telephone and telegraph
					 expenses, incurred in the operation of the hospital plant and equipment, such
					 as, but not limited to: electricity, gas and water.
(102) Variable Costs means operating costs
					 that vary or fluctuate with changes in patient volume.
(103) Volume Adjustment means the adjustment
					 for changes in patient volume that applies to the provider specific
					 all-inclusive rate per discharge for a given fiscal period.
(104) Well Newborn means those newborns who
					 have no major medical problems who are not counted as Medi-Cal discharges. This
					 includes newborns classified in Medicare PPS DRGs 372 and 373.
(105) Working Capital means the difference
					 between total current assets and total current liabilities.