Kentucky Administrative Regulations › Title 907 - CABINET FOR HEALTH AND FAMILY SERVICES - DEPARTMENT FOR MEDICAID SERVICES › Chapter 10 - Hospital Service Coverage and Reimbursement › Section 907 KAR 10:830 - Acute care inpatient hospital reimbursement

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				13B.140,
				142.303,
				205.510(16),
				205.565,
				205.637,
				205.638,
				205.639,
				205.640,
				216.380,
				42 C.F.R. Parts 412, 413,
				440.10,
				440.140,
				447.250-447.280, 42 U.S.C. 1395f(l), 1395ww(d)(5)(F), 1395x(mm), 1396a, 1396b,
				1396d, 1396r-4
NECESSITY, FUNCTION, AND CONFORMITY: The Cabinet for Health and
				Family Services, Department for Medicaid Services has responsibility to
				administer the Medicaid Program.
				KRS
				205.520(3) authorizes the
				cabinet, by administrative regulation, to comply with a requirement that may be
				imposed, or opportunity presented, by federal law for the provision of medical
				assistance to Kentucky's indigent citizenry. This administrative regulation
				establishes the Department for Medicaid Services' reimbursement provisions and
				requirements for acute care inpatient hospital services provided to a Medicaid
				recipient who is not enrolled with a managed care organization.
Section 1. Definitions.
(1) "Acute care hospital" is defined by
			 KRS
			 205.639(1).
(2) "Appalachian Regional Hospital System"
			 means a private, not-for-profit hospital chain operating in a Kentucky county
			 that receives coal severance tax proceeds.
(3) "Capital cost" means capital related
			 expenses including insurance, taxes, interest, and depreciation related to
			 plant and equipment.
(4) "CMS"
			 means the Centers for Medicare and Medicaid Services.
(5) "CMS IPPS Pricer Program" means the
			 software program published on the CMS Web site of
http://www.cms.hhs.gov
, which shows
			 the Medicare rate components and payment rates under the Medicare inpatient
			 prospective payment system for a discharge within a given federal fiscal
			 year.
(6) "Cost outlier" means a
			 claim for which estimated cost exceeds the outlier threshold.
(7) "Critical access hospital" or "CAH" means
			 a hospital:
(a) Meeting the licensure
			 requirements established in
			 906 KAR
			 1:110; and
(b) Designated as a critical access hospital
			 by the department.
(8)
			 "Department" means the Department for Medicaid Services or its designated
			 agent.
(9) "Diagnosis code" means a
			 code:
(a) Maintained by the Centers for
			 Medicare and Medicaid Services (CMS) to group and identify a disease, disorder,
			 symptom, or medical sign; and
(b)
			 Used to measure morbidity and mortality.
(10) "Diagnosis related group" or "DRG" means
			 a clinically similar grouping of services that can be expected to consume
			 similar amounts of hospital resources.
(11) "Distinct part unit" means a separate
			 unit within an acute care hospital that meets the qualifications established in
			 42 C.F.R.
			 412.25 and is designated as a distinct part
			 unit by the department.
(12) "DRG
			 base payment" means the sum of the operating base payment and capital base
			 payment, calculated as described in Section 2(4)(b) and (c) of this
			 administrative regulation.
(13)
			 "DRG geometric mean length-of-stay" means an average hospital length-of-stay,
			 expressed in days, for each DRG, with the geometric mean calculated by taking
			 the nth (number of values in the set) root of the product of all length-of-stay
			 values within a given DRG.
(14)
			 "Enrollee" means a recipient who is enrolled with a managed care
			 organization.
(15) "Enrollee day"
			 means a day of an inpatient hospital stay of a Medicaid recipient who is
			 enrolled with a managed care organization.
(16) "Federal financial participation" is
			 defined by
			 42 C.F.R.
			 400.203.
(17) "Fixed loss cost threshold" means an
			 amount, established annually by CMS, which is combined with the full DRG
			 payment or transfer payment for each DRG to determine the outlier
			 threshold.
(18) "Government entity"
			 means an entity that qualifies as a unit of government for the purposes of
			 42 U.S.C.
			 1396b(w)(6)(A).
(19) "Graduate medical education program"
			 means a Medicare-approved education and training program for interns and
			 residents in medicine, osteopathy, dentistry, or podiatry.
(20) "Hospital-acquired condition" means a
			 condition:
(a)
1. Associated with a diagnosis code selected
			 by the Secretary of the U.S. Department of Health and Human Services pursuant
			 to
			 42 U.S.C.
			 1395ww(d)(4)(D);
			 and
2. Not present upon the
			 recipient's admission to the hospital; and
(b) That is recognized by the Centers for
			 Medicare and Medicaid Services as a hospital acquired condition.
(21) "Indirect medical education
			 costs" means additional costs of serving Medicaid recipients, incurred by
			 teaching hospitals, to provide training and education to interns and residents
			 in graduate medical education programs, which are not reimbursed through direct
			 graduate medical education payments.
(22) "Long-term acute care hospital" means a
			 long term care hospital that meets the requirements established in
			 42 C.F.R.
			 412.23(e).
(23) "Managed care organization" means an
			 entity for which the Department for Medicaid Services has contracted to serve
			 as a managed care organization as defined by
			 42
			 C.F.R. 438.2.
(24) "Medicaid fee-for-service" means a
			 service associated with a Medicaid recipient who is not enrolled with a managed
			 care organization.
(25) "Medicaid
			 fee-for-service covered day" means an inpatient hospital day associated with a
			 Medicaid recipient who is not enrolled with a managed care
			 organization.
(26) "Medicaid
			 shortfall" means the difference between a provider's allowable cost of
			 providing services to Medicaid recipients and the amount received in accordance
			 with the payment provisions established in Section 2 of this administrative
			 regulation.
(27) "Medically
			 necessary" or "medical necessity" means that a covered benefit shall be
			 provided in accordance with
			 907
			 KAR 3:130.
(28) "Medicare-dependent hospital" means a
			 hospital designated as a Medicare dependent hospital by the Centers for
			 Medicare and Medicaid Services.
(29) "Medicare IPPS Final Rule Data Files and
			 Tables" means information related to Medicare hospital reimbursement that is:
(a) Published annually by the Centers for
			 Medicare and Medicaid Services; and
(b) Located online at the Centers for
			 Medicare and Medicaid Services acute inpatient PPS Web site located at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html
.
(30) "Medicare operating and
			 capital cost-to-charge ratios" means two (2) hospital-specific calculations:
(a) Completed by Medicare using CMS 2552 cost
			 report information;
(b) In which:
1. Medicare operating costs are divided by
			 total applicable charges to determine a Medicare operating cost-to-charge
			 ratio; and
2. Medicare capital
			 costs are divided by total applicable charges to determine a Medicare capital
			 cost-to-charge ratio; and
(c) That are published annually by CMS in an
			 impact file released with the Medicare IPPS Final Rule Data Files and Tables
			 for a given federal fiscal year.
(31) "Never event" means:
(a) A procedure, service, or hospitalization
			 not reimbursable by Medicare pursuant to CMS Manual System Pub 100-03 Medicare
			 National Coverage Determinations Transmittal 101; or
(b) A hospital-acquired condition.
(32) "Outlier threshold" means the
			 sum of the DRG base payment or transfer payment and the fixed loss cost
			 threshold.
(33) "Pediatric teaching
			 hospital" is defined by
			 KRS
			 205.565(1).
(34) "Per diem rate" means the per diem rate
			 paid by the department for:
(a) Inpatient care
			 in an in-state psychiatric or rehabilitation hospital;
(b) Inpatient care in a long-term acute care
			 hospital;
(c) Inpatient care in a
			 critical access hospital;
(d)
			 Psychiatric, substance use disorder, or rehabilitation services in an in-state
			 acute care hospital which has a distinct part unit; or
(e) A psychiatric or rehabilitation service
			 in an in-state acute care hospital.
(35) "Psychiatric hospital" means a hospital
			 that meets the licensure requirements as established in
			 902 KAR
			 20:180.
(36) "Quality improvement organization" or
			 "QIO" means an organization that complies with
			 42 C.F.R.
			 475.101.
(37) "Rehabilitation hospital" means a
			 hospital meeting the licensure requirements as established in
			 902
			 KAR 20:240.
(38) "Relative weight" means the factor
			 assigned to each Medicare DRG classification that represents the average
			 resources required for a Medicare DRG classification paid under the DRG
			 methodology relative to the average resources required for all DRG discharges
			 paid under the DRG methodology for the same period.
(39) "Resident" means an individual living in
			 Kentucky who is not receiving public assistance in another state.
(40) "Rural hospital" means a hospital
			 located in a rural area pursuant to
			 42
			 C.F.R.
			 412.64(b)(1)(ii)(C).
(41) "Sole community hospital" means a
			 hospital that is currently designated as a sole community hospital by the
			 Centers for Medicare and Medicaid Services.
(42) "State university" means the University
			 of Kentucky or the University of Louisville.
(43) "State university teaching hospital"
			 means a hospital that is owned or operated by a state university, or a state
			 university-related party organization, as allowed by
			 42 C.F.R.
			 413.17, with a state university affiliated
			 graduate medical education program.
(44) "Transfer payment" means a payment made
			 for a recipient who is transferred to or from another hospital for a service
			 reimbursed on a prospective discharge basis.
(45) "Universal rate year" means the twelve
			 (12) month period under the prospective payment system, beginning October 1 of
			 each year, for which a payment rate is established for a hospital regardless of
			 the hospital's fiscal year end.
(46) "Urban hospital" means a hospital
			 located in an urban area pursuant to
			 42
			 C.F.R.
			 412.64(b)(1)(ii).
(47) "Urban trauma center hospital" means an
			 acute care hospital that:
(a) Is designated as
			 a Level I Trauma Center by the American College of Surgeons;
(b) Has a Medicaid utilization rate greater
			 than twenty-five (25) percent; and
(c) Has at least fifty (50) percent of its
			 Medicaid population as residents of the county in which the hospital is
			 located.