Nebraska Administrative Code › Topic - HEALTH AND HUMAN SERVICES SYSTEM › Title 471 - NEBRASKA MEDICAL ASSISTANCE PROGRAM SERVICES › Chapter 10 - HOSPITAL SERVICES › Section 471-10-007 - BILLING AND PAYMENT FOR HOSPITAL SERVICES

Current through June 17, 2024
007.01
PAYMENT.
007.01(A)
GENERAL PAYMENT REQUIREMENTS.
The Department will
  reimburse the Provider for services rendered in accordance with the applicable
  payment regulations codified in 471 NAC 10. In the event that individual
  payment regulations in 471 NAC 3 conflict with payment regulations outlined in
  this 471 NAC 10, the individual payment regulations in 471 NAC 10 must
  govern.
007.01(B)
SPECIFIC PAYMENT REQUIREMENTS.
007.01(B)(i)
OUTPATIENT
  SERVICES.
The Department provides reimbursement for hospital
  outpatient services provided to Nebraska Medicaid eligible clients on a
  prospective basis in accordance with the rate methodology for Outpatient
  Hospital and Emergency Room Services. Reimbursement for the following services
  is included in the prospective rate payment for hospital inpatient services:
(a) Technical Component of Hospital
  Outpatient Radiology Services;
(b)
  Non-Patient Radiology Services;
(c)
  Anesthesiology:
(i) Technical Component of
  Medical Direction of Four or Fewer Concurrent Procedures for hospital
  outpatient;
(ii) Technical
  component of outpatient anesthesiology services provided by anesthetists who
  are not employees of a physician; and
(d) Medical Transplants, hospital charges for
  ambulatory stays.
007.01(B)(i)(1)
  This list is not intended to be an exclusive list of services that are
  reimbursed as a part of the hospital prospective payment for outpatient
  services. Other services that are considered to be included within the scope of
  services that are reimbursed as a part of the prospective payment for
  outpatient services include, but are not limited to, the following:
(a) Services which are customarily reimbursed
  as a part of the prospective payment for outpatient services.
007.01(B)(ii)
INPATIENT SERVICES.
The Department provides
  reimbursement for hospital inpatient services provided to Nebraska Medicaid
  eligible clients on a prospective basis. Each facility, with the exception of
  critical access hospitals, must receive a prospective rate in accordance with
  the Department's outlined rate methodology for hospital inpatient services.
  Reimbursement for the following services is included in the prospective rate
  payment for hospital inpatient services:
(a)
  Hospital observation services when the client is thereafter admitted as an
  inpatient of the same hospital;
(b)
  Hospital outpatient or emergency room services when the client is thereafter
  admitted as an inpatient of the same hospital before midnight of the same
  day;
(c) Non-physician inpatient
  services and Items:
(i) Outpatient and
  emergency room services provided by the hospital before admission;
  and
(ii) Outpatient or inpatient
  services provided by another hospital or freestanding medical facility to an
  inpatient of the original admitting facility.
(iii) Payment for durable medical equipment,
  orthotics, and prosthetics, etc., for hospital inpatients is included in the
  hospital's payment for inpatient services.
(d) Labor and delivery: The Department
  utilizes the current Medicare methodology in accounting for labor and delivery
  charges on the Medicare cost report;
(e) Technical component of inpatient clinical
  laboratory services: The hospital may include these costs on its cost report to
  be considered in calculating the hospital's payment rate;
(f) Technical component of inpatient
  anatomical pathology services: The hospital may include these costs on its cost
  report to be considered in calculating the hospital's payment rate;
(g) Technical component of hospital inpatient
  radiology services: These costs may be included on the hospital's cost report
  to be considered in calculating the hospital's payment rate;
(h) Anesthesiology:
(i) Technical component of medical direction
  of four or fewer concurrent procedures for hospital;
(ii) Technical component of inpatient
  anesthesiology services provided by anesthetists who are not employees of a
  physician;
(i) Inpatient
  dialysis: The hospital may include the costs of inpatient dialysis services on
  it cost report to be considered in calculation the hospital payment
  rate.
(j) Pre-Admission
  Testing;
(k) Medical transplants:
(i) Hospital inpatient services, including
  procurement costs;
(ii) Technical
  component of inpatient laboratory and diagnostic and therapeutic
  radiology;
(l) Infant
  apnea monitoring services provided to an inpatient.
007.01(B)(ii)(1) This list is not intended to
  be an exclusive list of services that are reimbursed as a part of the hospital
  prospective payment for inpatient services. Other services that are considered
  to be included within the scope of services that are reimbursed as a part of
  the prospective payment for inpatient services include, but are not limited to,
  the following:
(a) Services which are
  included by a hospital in the Medicare cost report; or
(b) Services which are customarily reimbursed
  as a part of the prospective payment for inpatient services.
007.01(B)(iii)
RECONCILIATION TO FACILITY UPPER PAYMENT LIMIT.
Facilities will be subject to a preliminary and a final reconciliation of
  Nebraska Medicaid payments to allowable Nebraska Medicaid costs. Facilities
  will have 90 days to make refunds to the Department, when notified that an
  overpayment has occurred.
007.01(B)(iv)
TRANSFERS.
When a patient is transferred to or from
  another hospital, the Department will make a transfer payment to the
  transferring hospital if the initial admission is determined to be medically
  necessary.
007.01(B)(v)
INPATIENT ADMISSION AFTER OUTPATIENT SERVICES.
A
  patient may be admitted to the hospital as an inpatient after receiving
  hospital outpatient services. Inpatient services, for billing and payment
  purposes, includes the following:
(a)
  Non-physician outpatient services rendered on the day of admission or during
  the inpatient stay;
(b) Diagnostic
  services rendered up to three days before the day of admission; and
(c) Admission related non-diagnostic services
  rendered up to 3 days before the day of admission. The day of the admission as
  an inpatient is the first day of the inpatient hospitalization.
007.01(B)(v)(1)
READMISSIONS.
The Department adopts Medicare peer
  review organization (PRO) regulations to control increased admissions or
  reduced services. All Nebraska Medicaid patients readmitted as an inpatient
  within 31 days will be reviewed by the Department or its designee. Payment may
  be denied if either admissions or discharges are performed without medical
  justification as determined by medical review.
007.01(B)(vi)
INTERIM PAYMENT FOR
  LONG-STAY PATIENTS.
A hospital may request an interim payment if
  the patient has been hospitalized 60 days and is expected to remain
  hospitalized an additional 60 days. To request an interim payment, the hospital
  must send the appropriate claim form or electronic format to the Department
  indicating the hospital days for which the interim payment is being requested
  with an attestation by the attending physician that the patient has been
  hospitalized a minimum of 60 days and is expected to remain hospitalized a
  minimum of an additional 60 days.
007.01(B)(vi)(1)
FINAL PAYMENT
  FOR LONG-STAY PATIENT.
When an interim payment is made for
  long-stay patients, the hospital must submit a final billing for payment upon
  discharge of the patient. Upon discharge, payment for the entire
  hospitalization will be calculated at the same rate as all prospective
  discharge payments. The final payment will be reduced by the amount of the
  interim payment.
007.01(B)(vii)
PAYMENT FOR
  NON-PHYSICIAN ANESTHETIST (CRNA) FEES.
Hospitals which meet the
  Medicare exception for payment of certified registered nurse anesthetist (CRNA)
  fees as a pass-through by Medicare will be paid for certified registered nurse
  anesthetist (CRNA) fees in addition to their prospective per discharge
  payment.
007.01(B)(viii)
NON-PAYMENT FOR HOSPITAL ACQUIRED CONDITIONS.
The
  Department will not make payment for those claims which are identified as
  nonpayable by Medicare as a result of avoidable hospital complications and
  medical errors that are identifiable, preventable, and serious in their
  consequences to patients. This provision applies only to those claims in which
  the Department is a secondary payor to Medicare.
007.01(B)(ix)
OUT-OF-PLAN
  SERVICES.
When Managed Care enrollees are provided hospital
  inpatient services by Nebraska Medicaid enrolled facilities not under contract
  with the Department's managed care organizations (MCO), the managed care
  organizations (MCO) are authorized, but are not required, to pay for the care
  provided at rates the Department would otherwise reimburse providers.
007.01(B)(x)
LOWER LEVELS OF
  CARE.
When the Department determines that a client no longer
  requires inpatient services but requires skilled nursing care and there are no
  skilled nursing beds available when the determination is made, the Department
  will pay only for authorized medically necessary skilled nursing care provided
  in an acute care hospital at a rate equal to the average rate per patient day
  paid by the Department to skilled nursing facilities during the previous
  calendar year. Medically necessary skilled nursing care must be authorized
  within 15 days of admission.
007.01(B)(x)(1)
  When a Nebraska Medicaid patient no longer requires inpatient hospital services
  and has requested nursing home admission and is waiting for completion of the
  pre-admission screening process (PASP), the Department may pay for the
  pre-admission screening process (PASP) days the client remains in the hospital
  before the pre-admission screening process is completed at a rate equal to the
  average rate per patient day paid by the Department to skilled nursing
  facilities during the previous calendar year.
007.01(B)(x)(2) The hospital must request
  prior authorization from the Department before the pre-admission screening
  process (PASP) days are provided. The Department will send the authorization to
  the hospital. Pre-admission screening process (PASP) days will not be
  considered in computing the hospital's prospective rate.
007.01(C)
PAYMENTS FOR PSYCHIATRIC SERVICES.
Tiered rates will
  be used for all psychiatric services, regardless of the type of hospital
  providing the service. This includes services provided at a facility enrolled
  as a provider for psychiatric services which is not a licensed psychiatric
  hospital or a Medicare-certified distinct part unit. Payment for each discharge
  equals the applicable per diem rate times the number of approved patient days
  for each tier. Payment is made for the day of admission, but not the day of
  discharge. Mental health and substance abuse services provided to clients
  enrolled in managed care for the mental health and substance abuse benefits
  package will be reimbursed by the managed care organization (MCO).
007.01(C)(i)
PAYMENT FOR HOSPITAL
  SPONSORED PSYCHIATRIC RESIDENTIAL TREATMENT FACILITIES (PRTF).
The
  Department reimbursement is capped at the psychiatric residential treatment
  facilities (PRTF) usual and customary daily charges billed for eligible
  clients. Public psychiatric residential treatment facilities (PRTF) will be
  cost-settled annually. Payment rates do not include costs of providing
  educational, pharmacy and physician services.
007.01(C)(ii)
PAYMENT FOR
  PSYCHIATRIC ADULT INPATIENT SUBACUTE HOSPITAL SERVICES.
Payments
  for psychiatric adult inpatient subacute hospital services are made on a per
  diem basis. The subacute inpatient hospital per diem rate is not a tiered rate.
  Payment will be an all-inclusive per diem, with the exception of physician
  services.
007.01(C)(iii)
RATES FOR STATE-OPERATED INSTITUTIONS FOR MENTAL DISEASE
  (IMD).
Institutions for mental disease (IMD) operated by the State
  of Nebraska will be reimbursed for all reasonable and necessary costs of
  operation. State-operated institutions will receive an interim per diem payment
  rate, with an adjustment to actual costs following the cost reporting
  period.
007.01(C)(iv)
FREE-STANDING PSYCHIATRIC HOSPITALS.
When a
  free-standing psychiatric hospital (in Nebraska or out of state) does not have
  ancillary services onsite, such as pharmacy or laboratory, the provider of the
  ancillary service must bill the Department for the ancillary services provided
  to inpatients.
007.01(D)
PAYMENT FOR SERVICES FURNISHED BY A CRITICAL ACCESS HOSPITAL
  (CAH).
The Department reimburses the reasonable cost of providing
  the services, as determined under applicable Medicare principles of
  reimbursement, except that the following principles do not apply: the lesser of
  costs or charges (LCC) rule, ceilings on hospital operating costs, and the
  reasonable compensation equivalent (RCE) limits for physician services to
  providers. Subject to the 96-hour average on inpatient stays in critical access
  hospitals (CAH), items and services that a critical access hospitals (CAH),
  provides to its inpatients are covered if they are items and services of a type
  that would be covered if furnished by a hospital to hospital
  inpatients.
007.01(E)
DISPROPORTIONATE SHARE HOSPITALS.
A hospital qualifies
  as a disproportionate share hospital if the hospital meets the definition of a
  disproportionate share hospital and submits the required information completed,
  dated and signed as follows with their Medicare cost report:
(i) The names of at least two obstetricians
  who have staff privileges at the hospital and who have agreed to provide
  obstetric services to individuals who are eligible for Nebraska Medicaid. This
  requirement does not apply to a hospital:
(1)
  The inpatients of which are predominantly individuals under 18 years of age;
  or
(2) Which does not offer
  non-emergency obstetric services to the general population as of December 21,
  1987.
(3) For a hospital located in
  a rural area, the term "obstetrician" includes any physician with staff
  privileges at the hospital to perform non-emergency obstetric
  procedures.
(ii) Only
  Nebraska hospitals which have a current enrollment with Nebraska Medicaid will
  be considered for eligibility as a Disproportionate Share Hospital.
007.01(F)
DEPRECIATION.
The Department recognizes depreciation
  as an allowable cost as reported on each facility's Medicare cost report and as
  determined allowable by the Medicare intermediary through application of
  Medicare principles of reimbursement.
007.01(F)(i)
RECAPTURE OF
  DEPRECIATION.
A hospital which is sold for a profit and has
  received Nebraska Medicaid payments for depreciation must refund to the
  Department the lower of:
(1) The amount of
  depreciation allowed and paid by the Department; or
(2) The product of:
(a) The ratio of Nebraska Medicaid allowed
  inpatient days to total inpatient days; and
(b) The amount of gain on the sale as
  determined by the Medicare.
007.01(F)(ii) The year(s) for which
  depreciation is to be recaptured is determined by the Medicare Intermediary
  according to Medicare principles of reimbursement.
007.01(G)
ADJUSTMENT TO
  RATE.
Changes to Nebraska Medicaid total allowable costs as a
  result of error, audit, or investigation may become the basis for adjusting
  current or prior prospective rates. The adjustment will be made back to the
  initial date of payment for the period affected based on the rate as determined
  by the Department. Hospitals will receive written notice of any adjustment
  stating the amount of the adjustment and the basis for the adjustment. If the
  rate adjustment results in decreasing a hospital's rate, the hospital must
  refund the overpayment amount as determined by the Department to the
  Department. If the rate adjustment results in increasing a hospital's rate, the
  Department will reimburse the underpayment amount as determined by the
  Department to the hospital.
007.01(G)(i)
REQUEST FOR RATE ADJUSTMENTS.
Hospitals may submit a
  request to the Department for an adjustment to their rates for the following:
(1) An error in the calculation of the
  rate;
(2) Extraordinary
  circumstances. Extraordinary circumstances are limited to:
(a) Changes in routine and ancillary costs,
  which are limited to:
(i) Intern and resident
  related medical education costs; and
(ii) Establishment of a subspecialty care
  unit;
(b) Extraordinary
  capital-related costs. Adjustment for capital-related costs will be limited to
  no more than a five percent increase; or
(3) Catastrophic circumstances. Hospitals may
  submit a request for adjustment to their rate if they incur allowable costs as
  a consequence of a natural or other catastrophe. The following circumstances
  must be met to be considered a catastrophic circumstance:
(a) One-time occurrence;
(b) Less than twelve-month
  duration;
(c) Could not have been
  reasonably predicted;
(d) Not of an
  insurable nature;
(e) Not covered
  by federal or state disaster relief; and
(f) Not a result of malpractice or
  negligence.
007.01(G)(ii)
ADJUSTMENT
  CONDITIONS.
In all circumstances, requests for adjustments to
  rates must be calculable and auditable. Requests must specify the nature of the
  adjustment sought and the amount of the adjustment sought. The burden of proof
  is that of the requesting hospital. If an adjustment is granted, the peer group
  rates will not be changed. In making a request for adjustment for circumstances
  other than a correction of an error, the requesting hospital must demonstrate
  the following:
(1) Changes in costs are the
  result of factors generally not shared by other hospitals in Nebraska, such as
  improvements imposed by licensing or accrediting standards, or extraordinary
  circumstances beyond the hospital's control.
(2) Every reasonable action has been taken by
  the hospital to mitigate or contain resulting cost increases. The Department
  may request that the hospital provide additional quantitative and qualitative
  data to assist in evaluation of the request. The Department may require an
  on-site operational review of the hospital be conducted by the Department or
  its designee.
(3) The rate the
  hospital receives is insufficient to provide care and service that conforms to
  applicable state and federal laws, regulations, and quality and safety
  standards.
007.07(H)
ACCESS TO
  RECORDS.
Hospitals must make all records relating to the care of
  Nebraska Medicaid patients and any and all other cost information available to
  the Department, its designated representatives or agents, or representatives of
  the federal Department of Health and Human Services, upon reasonable notice
  during regular business hours.
007.01(H)(i)
ADDITIONAL CONDITIONS.
Hospitals must allow authorized
  representatives of the Department, the federal Department of Health and Human
  Services, and state and federal fraud and abuse units to review and audit the
  hospital's data processing procedures and supportive software documentation
  involved in the production of computer-encoded claims submitted to the
  Department. The hospital must allow the authorized representatives access for
  the purpose of audit and review at any reasonable time during normal working
  hours upon written notice by the Department at least one working day before the
  review and audit.
007.01(J)
COST REPORT
  AUDITS.
The Department periodically performs or receives cost
  report audits to monitor the accuracy of data used to set rates. Audits may be
  performed by the hospital's Medicare intermediary, the Department, or an
  independent public accounting firm, licensed to do business in Nebraska and
  retained by the Department. Audits will be performed as determined appropriate
  by the Department.
007.02(J)(i)
NON-PARTICIPATING HOSPITALS.
A hospital that does not
  participate in the Medicare program will complete the Medicare cost report in
  compliance with Medicare principles and supporting rules, regulations, and
  statutes. The hospital will file the completed form with the Department within
  five months after the end of the hospital's reporting period. A 30-day
  extension of the filing period may be granted if requested in writing before
  the end of the five-month period. Completed Medicare Cost Reports are subject
  to audit by the Department or its designees. Note: If a nursing facility (NF)
  is affiliated with the hospital, the nursing facility (NF) cost report must be
  filed according to 471 NAC 12. Note specifically that the time guidelines for
  filing nursing facility (NF) cost reports differ from those for
  hospitals.
007.01(K)
PROVIDER APPEALS.
A hospital may submit additional
  evidence and request prompt administrative review of its prospective rate
  within 90 days of the rate notification date according to the procedures in 471
  NAC 2. A hospital may also request an adjustment to its rate.
007.01(L)
PAYMENT TO
  HOSPITAL-AFFILIATED AMBULATORY SURGICAL CENTERS (HAASC).
The
  Department pays for services provided in a hospital-affiliated ambulatory
  surgical center (HAASC) according to 471 NAC 10 unless the hospital-affiliated
  ambulatory surgical center (HAASC) is a Medicare-participating ambulatory
  surgical center (ASC). If the hospital-affiliated ambulatory surgical center
  (HAASC) is a Medicare-participating ambulatory surgical center (ASC), payment
  is made according to 471 NAC 26.
007.01(M)
PAYMENT FOR OUTPATIENT
  MENTAL HEALTH AND SUBSTANCE ABUSE SERVICES IN A HOSPITAL.
The
  Department pays for covered outpatient mental health services, except for
  laboratory services, at the lower of:
(i) The
  provider's submitted charge; or
(ii) The allowable amount for that procedure
  code in the Nebraska Medicaid Practitioner Fee Schedule for that date of
  service.
007.01(N)
APPROVAL OF PAYMENT FOR EMERGENCY ROOM SERVICES.
At
  least one of the following conditions must be met before the Department
  approves payment for use of an emergency room:
(1) The patient is evaluated or treated for
  an emergency medical condition;
(2)
  The patient's evaluation or treatment in the emergency room results in an
  approved inpatient hospital admission. The emergency room charges must be
  displayed on the inpatient claim as ancillary charges and included in the
  inpatient per diem; or
(3) The
  patient is referred by his or her physician for treatment in an emergency room.
007.01(N)(i) When the facility or
  the Department determine services are non-emergent, the room fee for
  non-emergent services provided in an emergency room will be disallowed to 50
  percent of what would otherwise be allowed. All other Nebraska Medicaid
  allowable charges incurred in this type of visit will be paid according to 471
  NAC 10.
007.01(P)
PAYMENT TO A NEW HOSPITAL FOR OUTPATIENT SERVICES.
The
  Department must cost-settle claims for Nebraska Medicaid-covered services which
  are paid by the Department. The cost settlement will be the lower of costs or
  charges as reflected on the hospital's cost report. The Department's payment
  must not exceed the upper limit of the provider's charges for services. Upon
  the Department's receipt of the hospital's initial Medicare cost report, the
  Department must no longer consider the hospital to be a "new hospital" for
  payment of outpatient services.
007.01(Q)
PAYMENT TO AN
  OUT-OF-STATE HOSPITAL FOR OUTPATIENT SERVICES.
Payment to an
  out-of-state hospital for outpatient services will be made based on the
  statewide average ratio of cost to charges for all Nebraska
  hospitals.
007.01(R)
ADMINISTRATIVE FINALITY.
See 471 NAC 3.
007.01(S)
LIMITATIONS ON PAYMENT
  FOR HOSPITAL SERVICES.
007.01(S)(i)
PLACE OF
  SERVICE.
The department may review, reduce, or deny payment for
  covered outpatient or emergency room drugs, supplies, or services which could
  have been provided in a less expensive setting.
007.01(S)(ii)
ITEMS NOT UTILIZED
  IN THE FACILITY.
Drugs, medical supplies, and services prescribed
  at discharge from the hospital must be obtained from and billed by the
  appropriate provider. The Department does not provide payment to a hospital for
  drugs, supplies, and services prescribed at discharge from the hospital for
  nursing home residents. Payment for these items is included in the nursing home
  per diem.
007.01(S)(iii)
OUTPATIENT/EMERGENCY SERVICES ON THE SAME DAY AS INPATIENT
  SERVICES.
When a client receives outpatient or emergency room
  hospital services and is thereafter admitted as an inpatient of the same
  hospital before midnight of the same day, the outpatient/emergency room
  hospital services are treated as inpatient services for billing
  purposes.
007.01(S)(iv)
BILLED CHARGES.
Inpatient hospital services are paid
  on a prospective rate basis, regardless of billed charges.
007.01(T)
THE DEPARTMENT'S
  SURVEILLANCE AND UTILIZATION REVIEW OF HOSPITAL SERVICES.
The
  Department, or its designee, reviews hospital inpatient services for:
(1) Medical necessity, appropriateness of
  service, and level of care;
(2)
  Validation of hospital diagnosis and procedure coding information;
(3) Completeness, adequacy and quality of
  care;
(4) Appropriateness of
  admission, continued hospitalization, discharge, and transfer; or
(5) Appropriateness of prospective payment
  outlier cases.
007.01(T)(i)
REVIEW ACTIVITIES FOR HOSPITAL INPATIENT SERVICES REIMBURSED ON A
  PROSPECTIVE PER DISCHARGE BASIS.
All hospital inpatient services
  reimbursed on a prospective per discharge basis are subject to random
  retrospective review by the Department or its designee. Admissions within three
  calendar days of a hospital outpatient service may be included in the sample.
  In addition to the random sample, focused reviews of inpatient stays for
  transplant(s) or neonatal intensive care unit (NICU) stays provided in a
  subspecialty care facility or cost outliers may be done by the Department or
  its designee.
007.01(T)(i)(1)
REVIEW FOR ALL SELECTED CASES.
Validation will
  include:
(a) Validation of diagnostic and
  procedural information and ICD-9-CM coding;
(b) Medical necessity for inpatient admission
  and procedure(s);
(c) Stability at
  discharge; and
(d) Quality of
  care.
007.01(T)(i)(2)
PAYMENT REDUCTION.
If the Department, or its designee,
  determines that either admissions or discharges are performed without medical
  justification, payment for inpatient services may be denied. Payment can be
  reduced if coding inaccuracies are identified by the Department or its
  designee. Any cost outlier which is not determined to be medically necessary
  for hospital inpatient care by the Department or its designee may qualify for
  payment as a lower level of care payment.
007.01(T)(ii)
REVIEW ACTIVITIES
  FOR HOSPITAL INPATIENT SERVICES REIMBURSED ON A PROSPECTIVE PER DIEM
  BASIS.
Hospital inpatient care must be reasonable, medically
  necessary, and appropriate for the class of care being billed. All hospital
  inpatient admissions must be certified by the Department or its designee prior
  to payment. Review will include medical necessity, appropriateness of service,
  and level of care. Payment for services will be denied if the Department or its
  designee determines the service was not medically necessary. The Department or
  its designee will conduct these activities through pre-admission, concurrent,
  and retrospective reviews. If the class of care is not appropriate, the claim
  may be reduced to the appropriate level of care according to 471 NAC 10 or
  denied.
007.01(T)(iii)
SURVEILLANCE AND UTILIZATION REVIEW OF HOSPITAL OUTPATIENT
  SERVICES.
Claims for payment for hospital outpatient services are
  subject to review by the Department or its designee. Hospital outpatient care
  must be reasonable and medically necessary, and must be provided in the most
  appropriate place of service.