Virginia Administrative Code › Title 12 - HEALTH › Agency 30 - DEPARTMENT OF MEDICAL ASSISTANCE SERVICES › Chapter 80 - METHODS AND STANDARDS FOR ESTABLISHING PAYMENT RATE; OTHER TYPES OF CARE › Section 12VAC30-80-36 - Fee-for-service providers: outpatient hospitals

Current through Register Vol. 40, No. 24, July 15, 2024
A. Definitions. The following words and terms
				when used in this section shall have the following meanings unless the context
				clearly indicates otherwise:
"Base year" means the state fiscal year for which data is
				  used to establish the EAPG base rate. The base year will change when the EAPG
				  payment system is rebased and recalibrated. In subsequent rebasings, the
				  Department of Medical Assistance Services (DMAS) shall notify affected
				  providers of the base year to be used in this calculation.
"Cost" means the reported cost as described in
				  12VAC30-80-20
				  A and B.
"Cost-to-charge ratio" equals the hospital's total costs
				  divided by the hospital's total charges. The cost-to-charge ratio shall be
				  calculated using data from cost reports from hospital fiscal years ending in
				  the state fiscal year used as the base year.
"Enhanced ambulatory patient group" or "EAPG" means a defined
				  group of outpatient procedures, encounters, or ancillary services that
				  incorporates International Classification of Diseases (ICD) diagnosis codes,
				  Current Procedural Terminology (CPT) codes, and Healthcare Common Procedure
				  Coding System (HCPCS) codes.
"EAPG relative weight" means the expected average costs for
				  each EAPG divided by the relative expected average costs for visits assigned to
				  all EAPGs.
"Medicare wage index" means the Medicare wage index published
				  annually in the Federal Register by the Centers for Medicare and Medicaid
				  Services. The indices used in this section shall be those in effect in the base
				  year.
B. Effective January
				1, 2014, the prospective enhanced ambulatory patient group (EAPG) based payment
				system described in this subsection shall apply to reimbursement for outpatient
				hospital services (with the exception of laboratory services referred to the
				hospital but not associated with an outpatient hospital visit, which will be
				reimbursed according to the laboratory fee schedule).
1. The payments for outpatient hospital
				visits shall be determined on the basis of a hospital-specific base rate per
				visit multiplied by the relative weight of the EAPG (and the payment action)
				assigned for each of the services performed during a hospital visit.
2. The EAPG relative weights shall be the
				weights determined and published periodically by DMAS and shall be consistent
				with applicable Medicaid reimbursement limits and policies. The weights shall
				be updated at least every three years.
3. The statewide base rate shall be equal to
				the total costs described in this subdivision divided by the wage-adjusted sum
				of the EAPG weights for each facility. The wage-adjusted sum of the EAPG
				weights shall equal the sum of the EAPG weights multiplied by the labor
				percentage times the hospital's Medicare wage index plus the sum of the EAPG
				weights multiplied by the nonlabor percentage. The base rate shall be
				determined for outpatient hospital services at least every three years so that
				total expenditures will equal the following:
a. When using base years prior to January 1,
				2014, for all services, excluding all laboratory services and emergency
				services described in subdivision 3 c of this subsection, a percentage of costs
				as reported in the available cost reports for the base period for each type of
				hospital as defined in
				12VAC30-70-221.
(1) Type One hospitals. Effective January 1,
				2014, hospital outpatient operating reimbursement shall be calculated at 90.2%
				of cost, and capital reimbursement shall be at 86% of cost inflated to the rate
				year.
(2) Type Two hospitals.
				Effective January 1, 2014, hospital outpatient operating and capital
				reimbursement shall be calculated at 76% of cost inflated to the rate
				year.
(3) When using base years
				after January 1, 2014, the percentages described in subdivision 3 a of this
				subsection shall be adjusted according to subdivision 3 c of this
				subsection.
(4) For critical access
				hospitals, effective July 1, 2019, the operating rate shall be based on an
				adjustment factor equal to 100% of cost reimbursement.
b. Laboratory services, excluding laboratory
				services referred to the hospital but not associated with a hospital visit, are
				calculated at the fee schedule in effect for the rate year.
c. Services rendered in emergency departments
				determined to be nonemergencies as prescribed in
				12VAC30-80-20
				D 1 b shall be calculated at the nonemergency reduced rate reported in the base
				year for base years prior to January 1, 2014. For base years after January 1,
				2014, the cost percentages in subdivision 3 a of this subsection shall be
				adjusted to reflect services paid at the nonemergency reduced rate in the last
				year prior to January 1, 2014.
d.
				Effective July 1, 2020, reimbursement for claims with procedure codes
				99281-99284 and a principal diagnosis code on the Preventable Emergency Room
				Diagnosis List shall be based on an all-inclusive EAPG payment weight for
				claims with CPT 99281 and a principal diagnosis code on the Preventable
				Emergency Room Listing. All other procedures on the outpatient hospital claim
				shall be packaged in the all inclusive payment for 99281-99284. DMAS shall
				calculate the all-inclusive payment weight for claims with 99281 using data
				from the most recent rebasing. The Preventable Emergency Room Diagnosis List
				shall be based on the list used for managed care organization clinical
				efficiency rate adjustments.
4. Inflation adjustment to base year costs.
				Each July, the Virginia moving average values as compiled and published by
				Global Insight (or its successor), under contract with DMAS, shall be used to
				update the base year costs to the midpoint of the rate year. The most current
				table available prior to the effective date of the new rates shall be used to
				inflate base year amounts to the upcoming rate year. Thus, corrections made by
				Global Insight (or its successor) in the moving averages that were used to
				update rates for previous state fiscal years shall be automatically
				incorporated into the moving averages that are being used to update rates for
				the upcoming state fiscal year. Inflation shall be applied to the costs
				identified in subdivision 3 a of this subsection. The inflation adjustment for
				state fiscal year 2017 shall be 50% of the full inflation adjustment calculated
				according to this section. There shall be no inflation adjustment for state
				fiscal year 2018. A full inflation adjustment shall be made in both fiscal year
				2017 and fiscal year 2018 to Virginia freestanding children's hospitals with
				greater than 50% Medicaid utilization in 2009.
5. Hospital-specific base rate. The
				hospital-specific base rate per case shall be adjusted for geographic
				variation. The hospital-specific base rate shall be equal to the labor portion
				of the statewide base rate multiplied by the hospital's Medicare wage index
				plus the nonlabor percentage of the statewide base rate. The labor percentage
				shall be determined at each rebasing based on the most recently reliable data.
				For rural hospitals, the hospital's Medicare wage index used to calculate the
				base rate shall be the Medicare wage index of the nearest metropolitan wage
				area or the effective Medicare wage index, whichever is higher. A base rate
				differential of 5.0% shall be established for freestanding Type Two children's
				hospitals. The base rate for non-cost-reporting hospitals shall be the average
				of the hospital-specific base rates of in-state Type Two hospitals.
6. The total payment shall represent the
				total allowable amount for a visit including ancillary services and
				capital.
7. The transition from
				cost-based reimbursement to EAPG reimbursement shall be transitioned over a
				four-year period. DMAS shall calculate a cost-based base rate at January 1,
				2014, and at each rebasing during the transition.
a. Effective for dates of service on or after
				January 1, 2014, DMAS shall calculate the hospital-specific base rate as the
				sum of 75% of the cost-based base rate and 25% of the EAPG base rate.
b. Effective for dates of service on or after
				July 1, 2014, DMAS shall calculate the hospital-specific base rate as the sum
				of 50% of the cost-based base rate and 50% of the EAPG base rate.
c. Effective for dates of service on or after
				July 1, 2015, DMAS shall calculate the hospital-specific base rate as the sum
				of 25% of the cost-based base rate and 75% of the EAPG base rate.
d. Effective for dates of service on or after
				July 1, 2016, DMAS shall calculate the hospital-specific base rate as the EAPG
				base rate.
8. To
				maintain budget neutrality during the first six years of the transition to EAPG
				reimbursement, DMAS shall compare the total reimbursement of hospital claims
				based on the parameters in subdivision 3 of this subsection to EAPG
				reimbursement every six months based on the six months of claims ending three
				months prior to the potential adjustment. If the percentage difference between
				the reimbursement target in subdivision 3 of this subsection and EAPG
				reimbursement is greater than 1.0%, plus or minus, DMAS shall adjust the
				statewide base rate by the percentage difference the following July 1 or
				January 1. The first possible adjustment would be January 1, 2015, using
				reimbursement between January 1, 2014, and October 31, 2014.