RULE NO: RULE TITLE
59G-6.020: Payment Methodology for Inpatient Hospital Services
PURPOSE AND EFFECT: The purpose and effect of the proposed rule development is to incorporate changes to the Florida Title XIX Inpatient Hospital Reimbursement Plan effective July 1, 2010, in accordance with House Bill 5001, 2010-11 General Appropriations Act, Specific Appropriation 189 and 190, and to address a series of cost report issues.
1. The Agency shall implement a recurring methodology in the Title XIX Inpatient Hospital Reimbursement Plan to achieve a $232,221,607 reduction. In establishing rates through the normal process, prior to including this reduction, if the unit cost is equal to or less than the unit cost used in establishing the budget, then no additional reduction in rates is necessary. In establishing rates through the normal process, prior to including this reduction, if the unit cost is greater than the unit cost used in establishing the budget, then rates shall be reduced by an amount required to achieve this reduction, but shall not be reduced below the unit cost used in establishing the budget. Hospitals that are licensed as a children’s specialty hospital and whose Medicaid days plus charity care days divided by total adjusted patient days equals or exceeds 30 percent and rural hospitals as defined in Section 395.602, Florida Statutes, are excluded from this reduction.
2. Eliminate the inpatient reimbursement ceilings for hospitals whose charity care and Medicaid days, as a percentage of total adjusted hospital days, equal or exceed 11 percent. For any public hospital or any leased public hospital found to have sovereign immunity or hospital with graduate medical education positions that does not qualify for the elimination of the inpatient ceilings under this section of proviso or any other proviso listed, such hospitals shall be exempt from the inpatient reimbursement ceilings contingent on the hospital or local governmental entity providing the required state match. The agency shall use the average of the 2003, 2004 and 2005 audited DSH data available as of March 1, 2009. In the event the agency does not have the prescribed three years of audited DSH data for a hospital, the agency shall use the average of the audited DSH data for 2003, 2004 and 2005 that are available. Any hospital that was exempt from the inpatient reimbursement ceiling in the prior state fiscal year, due to their charity care and Medicaid days as a percentage to total adjusted hospital days equaling or exceeding 11 percent, but no longer meets the 11 percent threshold, because of updated audited DSH data, shall remain exempt from the inpatient reimbursement ceilings for a period of two years.
3. Eliminate the inpatient reimbursement ceilings for hospitals that have a minimum of ten licensed Level II Neonatal Intensive Care Beds and are located in Trauma Services Area 2.
4. Eliminate the inpatient hospital reimbursement ceilings for hospitals whose Medicaid days as a percentage of total hospital days exceed 7.3 percent, and are designated or provisional trauma centers. This provision shall apply to all hospitals that are designated or provisional trauma centers on July 1, 2010, and any hospitals that becomes a designated or provisional trauma center during Fiscal Year 2010-2011. Included in these funds are the annualized amounts to offset the reductions taken against certified trauma centers as identified in Section 12, Chapter 2007-326, Laws of Florida. The agency shall use the average of the 2003, 2004 and 2005 audited Disproportionate Share Hospital (DSH) data available as of March 1, 2009. In the event the agency does not have the prescribed three years of audited Disproportionate Share Hospital (DSH) data for a hospital, the agency shall use the average of the audited DSH data for 2003, 2004 and 2005 that are available.
5. $9,932,000 is provided for global fees for providing liver transplant services to Medicaid beneficiaries.
6. Eliminate the inpatient reimbursement ceilings for teaching, specialty, Community Hospital Education Program hospitals, and Level III Neonatal Intensive Care Units that have a minimum of three of the following designated tertiary services as regulated under the Certificate of Need Program: pediatric bone marrow transplantation, pediatric open heart surgery, pediatric cardiac catheterization, and pediatric heart transplantation. Included in these funds are the annualized amounts to offset the reductions taken against hospitals defined in Section 408.07(45), Florida Statutes, that are not certified trauma centers, as identified in Section 12, Chapter 2007-326, Laws of Florida.
7. Buy back of the Medicaid trend adjustment that is being applied against the Medicaid inpatient rates for the following three categories of hospitals. Of these funds
• $31,984,943 is provided to the first category of hospitals, which are those hospitals that are part of a system that operates a provider service network in the following manner: $18,773,903 is for Jackson Memorial Hospital; $2,133,277 is for hospitals in Broward Health; $4,906,684 is for hospitals in the Memorial Healthcare System; and $760,226 is for Shands Jacksonville and $5,410,853 is for Shands Gainesville. In the event that the above amounts exceed the amount of the Medicaid trend adjustment applied to each hospital, then the excess funds will be used to buy back other Medicaid reductions in the inpatient rate.
• $12,139,819 shall be used for the second category to buy back the Medicaid trend adjustment that is being applied against the Medicaid inpatient rates for those hospitals that are licensed as a children’s specialty hospital and whose Medicaid days plus charity care days divided by total adjusted patient days equals or exceeds 30 percent. In the event that the funds under this category exceed the amount of the Medicaid trend adjustment, then any excess funds will be used to buy back other Medicaid reductions in the inpatient rate for those individual hospitals.
• $5,475,985 shall be used for the third category to buy back the Medicaid trend adjustment that is being applied against the Medicaid inpatient rates to rural hospitals. In the event that the funds under this category exceed the amount of the Medicaid trend adjustment, then any excess funds will be used to buy back other Medicaid reductions in the inpatient rate for those individual hospitals.
The agency shall use the 2003, 2004 and 2005 audited DSH data available as of March 1, 2009. In the event the agency does not have the prescribed three years of audited DSH data for a hospital, the agency shall use the average of the audited DSH data for 2003, 2004 and 2005 that are available.
8. Public hospitals, including any leased public hospital found to have sovereign immunity, teaching hospitals as defined in Section 408.07(45) or 395.805, Florida Statutes, which have seventy or more full-time equivalent resident physicians, hospitals with graduate medical education positions that do not otherwise qualify, and for designated trauma hospitals to buy back the Medicaid inpatient trend adjustment applied to their individual hospital rates and other Medicaid reductions to their inpatient rates up to actual Medicaid inpatient cost.
9. Hospitals not previously provided this authority, may buy back the Medicaid inpatient trend adjustment applied to their individual hospital rates and other Medicaid reductions to their inpatient rates up to actual Medicaid inpatient cost. The agency shall not include the funds described in this paragraph for the buy back of reductions to inpatient hospital rates in the calculation of capitation rates for Health Maintenance Organizations unless the nonfederal share is provided through grants and donations from state, county or other governmental funds. This section does not include the buy back of the Medicaid inpatient trend adjustment applied to the individual state mental health hospitals.
10. $40,000,000 is provided for hospital exemptions from inpatient reimbursement limitations for any hospital, not elsewhere qualifying for an exemption, that has local funds available for intergovernmental transfers. The payments under this proviso are contingent on the state share being provided through grants and donations from state, county, or other governmental funds. The agency shall not include the funds described in this paragraph for the buy back of reductions to inpatient hospital rates in the calculation of capitation rates for Health Maintenance Organizations unless the nonfederal share is provided through grants and donations from state, county or other governmental funds. This section of proviso does not include the buy back of the Medicaid inpatient trend adjustment applied to the individual state mental health hospitals.
11. $6,000,000 is provided for Medicaid payments for multi-visceral transplant and intestine transplants in Florida. The agency shall establish a reasonable global fee for these transplant procedures and the payments shall be used to pay approved multi-visceral transplant and intestine transplant facilities a global fee for providing transplant services to Medicaid beneficiaries.
12. Adjust the Medicaid rate for any rural hospital that moved into a replacement facility during calendar year 2009 to reflect Medicaid costs for the period of time from moving into the replacement facility to when the rate would reflect the costs of the replacement facility through the routine rate setting process. To qualify for this adjustment, a hospital must have a combined Medicaid and charity care utilization rate of at least 25 percent based on the most recent information reported to the Agency for Health Care Administration prior to moving into the replacement facility.
13. Funds in Specific Appropriation 190 shall be used for a Disproportionate Share Hospital Program as provided in Sections 409.911, 409.9113, and 409.9119, Florida Statutes:
$155,223,205 – Payments to public hospitals;
$66,131,172 – Payments to Teaching hospitals;
$2,000,000 – Payments for Graduate Medical Education (GME);
$13,020,000 – Payments to family practice teaching hospitals;
$800,000 – Payments to hospitals licensed as specialty children’s hospitals; and
$9,216,200 – Payments to Provider Service Network hospitals.
15. Clarifying the definition of late cost report and acceptance procedures.
16. New policies regarding resubmissions of cost reports by providers.
17. Development of a sanction process (possibly a daily fine) for late cost reports including reimbursement at the lowest per diem by class.
18. Development of new policies and procedures regarding AHCA’s ability to recoup overpayments.
19. AHCA will reserve the right to submit any provider found to be out of compliance with any of the new policies and procedures regarding cost reports to the Bureau of Medicaid Program Integrity for investigations.
SUBJECT AREA TO BE ADDRESSED: July 1, 2010 Inpatient Hospital reimbursement rates and cost reporting issues.
SPECIFIC AUTHORITY: 409.919 FS.
LAW IMPLEMENTED: 409.911, 409.9112, 409.9113, 409.9115, 409.9116, 409.9117, 409.9118, 409.9119 FS.
IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
TIME AND DATE: July 13, 2010, 10:00 a.m. – 11:00 a.m.
PLACE: 2727 Mahan Drive, Conference Room C, Building 3, Tallahassee, Florida
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Edwin Stephens, Medicaid Program Analysis, Agency for Health Care Administration, 2727 Mahan Drive, Building 3, Room 2149-A, Tallahassee, Florida 32308, (850)412-4077 or edwin.stephens@ahca.myflorida.com

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS NOT AVAILABLE.