HAR §17-1739.2-3. Reimbursement principles

(a) Except as noted herein, the Hawaii medical assistance program shall reimburse providers based on the number of days of care that the provider delivers to the resident, the acuity level that is medically necessary for each day of care, and the provider's PPS rate. The provider shall receive payment at the level A rate for residents who require care at acuity level A, at the level B rate for residents who require care at acuity level B, at the level C rate for residents who require care at acuity level C, and at level D rate for residents who require care at the acuity level D. Any payments made by residents or other third parties on behalf of residents shall be deducted from the reimbursement paid to providers. (b) Except as noted herein, the Medicaid program shall pay for institutional long-term care services through the use of a facility-specific prospective per diem rate. (c) The basic PPS rate shall be developed based on each provider's historical costs (as reflected in its base year cost report) and allocated to three components, which are subject to component cost ceilings. (d) A proprietary provider shall receive the GET and ROE adjustments to its basic PPS rate to account for gross excise taxes and return on equity. (e) Rates for acute facilities with federally designated swing beds shall be established according to 42 C.F.R. §447.280. (f) Changes in ownership, management, control, operation, and leasehold interests which result in increased costs for the successor owner, management, or leaseholder shall be recognized for reimbursement purposes only to the following extent: Pursuant to the provisions of Pub. L. No. 99-272, section 9509(a)(4)(C), the valuation of capital assets shall not be increased (as measured from the date of acquisition by the seller to the date of the change of ownership), solely as a result of a change of ownership, by more than the lesser of: (1) One-half of the percentage increase (as UNOFFICIAL 1739.2-4 measured over the same period of time, or, if necessary, as extrapolated retrospectively by the Secretary) in the Dodge Construction Systems Costs for Nursing Homes, applied in the aggregate with respect to those facilities which have undergone a change of ownership during the fiscal year; or (2) One-half of the percentage increase (as measured over the same period of time) in the Consumer Price Index for all urban consumers (United States city average). (g) The department shall pay the providers separately for ancillary services based on a fee schedule or through an ancillaries payment. (h) Nursing facilities that have G&A or capital costs below the median for their peer group are rewarded with an incentive payment. A formula to determine the G&A incentive adjustment is defined in section 17-1739.2-1. (i) The department may contract with providers to provide acuity level D care to selected residents. (j) The department shall reimburse level A and level C services of a Medicare and Medicaid certified CAH on a reasonable cost basis following Medicare principles of reimbursement. Reimbursement for level A and level C routine services provided in a long term care distinct part by a CAH will be actual costs up to two hundred per cent of each provider’s Medicaid routine cost limit. However, for CAH providers whose routine costs exceed the routine cost limit, reimbursement of costs will be limited to two hundred per cent of each provider's routine cost limit, and only when a routine cost limit exception request has been filed and only up to the amounts approved by the State. (k) Members of the public may obtain the data and methodology used in establishing payment rates for providers by following the procedures defined in the Uniform Information Practices Act, chapter 92F, HRS. [Eff 09/01/03 ] (Auth: HRS §346-59; 42 U.S.C. §1396a) (Imp: 42 C.F.R. §447.252) UNOFFICIAL 1739.2-5 §17-1739.2-4 Services included in the basic PPS rate. (a) The reasonable and necessary costs of providing the following items and services shall be included in the basic PPS rate and shall not be separately reimbursable, unless specifically excluded under subsection (b): (1) Room and board; (2) Administration of medication and treatment and all nursing services; (3) Development, management, and evaluation of the written patient care plan based on physician orders that necessitate the involvement of skilled technical or professional personnel to meet the recipient's care needs, promote recovery, and ensure the recipient's health and safety; (4) Observation and assessment of the recipient's unstable condition that requires the skills and knowledge of skilled technical or professional personnel to identify and evaluate the recipient's need for possible medical intervention, modification of treatment, or both, to stabilize the recipient's condition; (5) Health education services, such as gait training and training in the administration of medications, provided by skilled technical or professional personnel to teach the recipient self-care; (6) Provision of therapeutic diet and dietary supplements as ordered by the attending physician; (7) Laundry services, including items of recipient's washable personal clothing; (8) Basic nursing and treatment supplies, such as soap, skin lotion, alcohol, powder, bandages, applicators, tongue depressors, cotton balls, gauze, adhesive tape, incontinent pads, V-pads, thermometers, blood pressure apparatus, plastic or rubber sheets, enema UNOFFICIAL 1739.2-6 equipment, and douche equipment; (9) Non-customized durable medical equipment and supplies used by individual recipients, but which are reusable. Examples include items such as ice bags, hot water bottles, urinals, bedpans, commodes, canes, crutches, walkers, wheelchairs, and side-rail and traction equipment; (10) Activities of the patient's choice (including religious activities) that are designed to provide normal pursuits for physical and psychosocial well being; (11) Social services provided by qualified personnel; (12) Maintenance therapy; provided, however, that only the costs that would have been incurred if nursing staff had provided the maintenance therapy will be included in calculating the basic PPS rates; (13) A review of the drug regimen of each resident at least once a month, by a licensed pharmacist, as required for a nursing facility to participate in Medicaid. (14) Provision of and payment for, through contractual agreements with appropriate skilled technical or professional personnel, other medical and remedial services ordered by the attending physician which are not regularly provided by the provider. The contractual agreement shall stipulate the responsibilities, functions, objectives, services fee, and other terms agreed to by the provider and the person or entity that contracts to provide the service; and (15) Recurring, reasonable and incremental costs incurred to comply with OBRA 87. (b) The costs of providing the following items and services shall be specifically excluded from reimbursement under this chapter, and shall be billed separately to the department by the providers: (1) Physician services, except those of the medical director and quality assurance or UNOFFICIAL 1739.2-7 drug use review board, or all three; (2) Drugs that are provided to residents in accordance with Title XIX policy; (3) Laboratory, x-ray, and EKG; (4) Ambulance and any other transportation for medical reasons that is not provided by the provider and not included in the costs used to calculate the basic PPS rates; (5) Optical; (6) Audiology; (7) Podiatry; (8) Physical therapy, excluding maintenance therapy; (9) Occupational therapy, excluding maintenance therapy; (10) Speech, hearing, and respiratory therapies; (11) Customized durable medical equipment and such other equipment or items that are designed to meet special needs of a resident and are authorized by the department; and (12) Charges for ancillary services are not included in calculating the basic PPS rates and shall be paid as follows: (A) Providers that have the capability shall bill the department separately for ancillary services; (B) The department shall make an ancillaries payment to providers that it designates as incapable of billing for ancillary services on an itemized basis; (C) In order to receive an ancillaries payment, the provider must make assurances satisfactory to the department that it is committed to acquiring the ability to bill on an itemized basis for ancillaries, and is pursuing that goal with all deliberate speed; (D) As part of the FY 98 rebasing, the department shall identify ancillary UNOFFICIAL 1739.2-8 services for which a provider lacks the ability to bill separately and calculate a per diem amounts as an ancillaries payment; (E) No provider that receives an ancillaries payment shall otherwise bill the department separately on behalf of a Title XIX resident for any type of ancillary service that is included in calculating its ancillaries payment. A provider that receives an ancillaries payment must also implement procedures and assure the department that no other person or entity will bill separately for any type of ancillary service that is included in calculating the ancillaries payment; (F) The provider shall provide to the department upon request the progress that it is making in its efforts to acquire the ability to bill separately for ancillary services. If and when the provider acquires that ability, then it shall promptly notify the department in writing; (G) Once the department determines that a provider is capable of billing for some or all ancillary services on an itemized basis, then it shall provide advance written notice to that provider of a date upon which it will either cease making or reduce the ancillaries payment. If the provider acquires the capability of billing for some (but not all) ancillary services that were included in calculating its ancillaries payment, then the department shall reduce the ancillaries payment accordingly; and (H) The department shall make available all necessary data to ensure the appropriate accounting for ancillary UNOFFICIAL 1739.2-9 services. (c) The personal funds of medical assistance recipients may not be charged any costs for routine personal hygiene items and services provided by the provider. [Eff 09/01/03; am 05/05/05] (Auth: HRS §346-59; 42 U.S.C. §1396a) (Imp: 42 C.F.R. §447.252) §17-1739.2-5 Classification of long-term care providers into peer groups. For the purpose of establishing the basic PPS rates, providers and costs shall be grouped into the following five mutually exclusive classifications or peer groups: (1) The costs of delivering care to acuity level A patients in free-standing nursing facilities; (2) The costs of delivering care to acuity level C patients in free-standing nursing facilities; (3) The costs of delivering care to acuity level A patients in hospital-based nursing facilities; (4) The costs of delivering care to acuity level C patients in hospital-based nursing facilities; and (5) The costs of delivering care to acuity level B patients in an ICF/MR. [Eff 09/01/03 ] (Auth: HRS §346-59; 42 U.S.C. §1396a(30)) (Imp: 42 C.F.R. §447.252) §17-1739.2-6 Basic PPS rate calculation methodology. Unless otherwise noted, the basic PPS rates shall be calculated using the methodology set forth in this chapter. [Eff 09/01/03 ] (Auth: HRS §346-59; 42 U.S.C. §1396a) (Imp: 42 C.F.R. §447.252)