Virginia Administrative Code › Title 12 - HEALTH › Agency 30 - DEPARTMENT OF MEDICAL ASSISTANCE SERVICES › Chapter 70 - METHODS AND STANDARDS FOR ESTABLISHING PAYMENT RATES - INPATIENT HOSPITAL SERVICES › Part I - Per Diem Methodology › Section 12VAC30-70-130 - Payment adjustment fund

Current through Register Vol. 40, No. 24, July 15, 2024
A. A
				  Payment Adjustment Fund shall be created in each of the Commonwealth's fiscal
				  years during the period July 1, 1992, to June 30, 1996. The Payment Adjustment
				  Fund shall consist of the Commonwealth's cumulative addition of five million
				  dollars in General funds and its corresponding federal financial participation
				  for reimbursement to non-state owned hospitals in each of the Commonwealth's
				  fiscal years during this period. Each July 1, or as soon thereafter as is
				  reasonably possible, the Commonwealth shall, through a single payment to each
				  non-state owned hospital, equitably and fully disburse the Payment Adjustment
				  Fund for that year.
B. In the
				  absence of any amendment to this section, for the Commonwealth's fiscal year
				  after 1996, the Payment Adjustment Fund shall be continued at the level
				  established in 1996 and shall be disbursed in accordance with the methodology
				  described below.
C. The Payment
				  Adjustment Fund shall be disbursed in accordance with the following
				  methodology:
1. Identify each non-state owned
				  hospital provider (acute, neonatal and rehabilitation) receiving payment based
				  upon its peer group operating ceiling in May of each year.
2. For each such hospital identified in
				  Paragraph 1, identify its Medicaid paid days for the 12 months ending each May
				  31.
3. Multiply each such
				  hospital's days under Paragraph 2 by such hospital's May individual peer group
				  ceiling (i.e., disregarding such hospital's actual fiscal year end ceiling) as
				  adjusted by its then current disproportionate share factor.
4. Sum all hospital amounts determined in
				  Paragraph 3.
5. For each such
				  hospital, divide its amount determined in Paragraph 3 by the total of such
				  amounts determined in Paragraph 4. This then becomes the hospital adjustment
				  factor ("HAF") for each such hospital.
6. Multiply each such hospital's HAF times
				  the amount of the Payment Adjustment Fund ("PAF") to determine its potential
				  PAF share.
7. Determine the
				  unreimbursed Medicaid allowable operating cost per day for each such hospital
				  in Paragraph 1 for the most recent fiscal year on file at DMAS as of May 31,
				  inflate such costs by DRI-V+2 from the mid-point of such cost report to May 31
				  and multiply such inflated costs per day by the days identified for that
				  hospital in Paragraph 2 above, creating the "unreimbursed amount."
8. Compare each such hospital's potential PAF
				  share to its unreimbursed amount.
9. Allocate to all hospitals, where the
				  potential PAF share exceeds the unreimbursed amount, such hospital's
				  unreimbursed amount as its actual PAF share.
10. If the PAF is not exhausted, for those
				  hospitals with an unreimbursed amount balance, recalculate a new HAF for each
				  such hospital by dividing the hospital's HAF by the total of the HAFs for all
				  hospitals with an unreimbursed amount balance.
11. Recompute each hospital's new potential
				  share of the undisbursed PAF by multiplying such finds by each hospital's new
				  HAF.
12. Compare each hospital's
				  new potential PAF share to its unreimbursed amount. If the unreimbursed amounts
				  exceed the PAF shares at all hospitals, each hospital's new PAF share becomes
				  its actual PAF share. If some hospitals' unreimbursed amounts are less than the
				  new potential PAF shares, allocate to such hospitals their unreimbursed amount
				  as their actual PAF share. Then, for those hospitals with an unreimbursed
				  amount balance, repeat steps 10, 11, and 12 until each hospital's actual PAF
				  share is determined and the PAF is exhausted.
13. The annual payment to be made to each
				  non-state owned hospital from the PAF shall be equal to their actual PAF share
				  as determined and allocated above. Each hospital's actual PAF share payment
				  shall be made on July 1, or as soon thereafter as is reasonable
				  feasible.