Hospital Services: Provider Reimbursement

The upper payment limits observed by the Department in reimbursing each individual hospital must not exceed the payment that would be determined as a reasonable cost under the policies, definitions and procedures observed under Medicare principles of cost reimbursement. (7-1-26) 01. Payment Procedures. The following procedures are applicable to in-patient hospitals: (7-1-26) a. The participant's admission and length of stay may be subject concurrent review, continued stay review, and retrospective review by a Quality Improvement Organization (QIO) designated by the Department. QIO review will be governed by provisions of the QIO Idaho Medicaid Provider Manual as amended. Failure to obtain a timely QIO review as required by these rules, and as outlined in the QIO Idaho Medicaid Provider Manual as amended, will result in the QIO conducting a late review. (7-1-26) IDAHO ADMINISTRATIVE CODE IDAPA 16.03.26 Department of Health & Welfare Medicaid Plan Benefits Section 074 Page 44 b. In reimbursing hospitals, the Department will pay the lesser of customary hospital charges or Medicaid reimbursement for in-patient hospital care as set forth in this rule, unless an exception applies. The upper limits for payment must not exceed the payment that would be determined as reasonable cost using Medicare standards and principles. (7-1-26) 02. Administratively Necessary Days (AND) Reimbursement Rate. Reimbursement for an AND will be made at the weighted average Medicaid payment rate for all Idaho NFs for routine services, as defined per 42 CFR 447.280(a)(1), furnished during the previous calendar year. (7-1-26) a. The AND reimbursement rate will be calculated by the Department of each calendar year and made effective retroactively for dates of service on or after January 1 of the respective calendar year. (7-1-26) b. Hospitals with an attached NF will be reimbursed the lesser of their Medicaid per diem routine rate or the established average rate for an AND; and (7-1-26) c. The Department will pay the lesser of the established AND rate or a facility's customary hospital charge to private pay patients for an AND. (7-1-26) 03. Hospital Swing-Bed Reimbursement. The Department will pay for NF care in certain rural hospitals for participants in licensed hospital swing-beds who require NF level of care. (7-1-26) a. Routine services include all medical care, supplies, and services that are included in the calculation of NF property and non-property costs as described in these rules. Reimbursement of ancillary services will be determined in the same manner as hospital outpatient reasonable costs in accordance with Medicare reasonable cost principles, except prescription drugs will be reimbursed under these rules. (7-1-26) b. The Department will reimburse hospitals for participants under the following conditions: (7-1-26) i. The participant is determined to be entitled to such services in accordance with IDAPA 16.03.05; and (7-1-26) ii. The participant is authorized for payment of long-term care. (7-1-26) c. The Department will reimburse swing-bed hospitals on a per diem basis utilizing a rate established as follows: (7-1-26) i. Payment rates for routine NF services will be at the weighted average Medicaid rate per patient day paid to hospital-based NF for routine services furnished during the previous calendar year. (7-1-26) ii. The rate will be calculated by the Department of each calendar year. The rate will be based on the previous calendar year and effective retroactively for dates of service on or after January 1 of the respective year. (7-1-26) iii. The weighted average rate for NF swing-bed days will be calculated by dividing total payments for routine services, including patient contribution amounts but excluding miscellaneous financial transactions relating to prior years, by total patient days for each respective level of care occurring in the previous calendar year. (7-1-26) iv. Routine services include all medical care, supplies, and services that are included in the calculation of NF property and nonproperty costs. (7-1-26) v. Reimbursement of ancillary services not included in the NF rates furnished for extended care services will be billed and determined in the same manner as hospital outpatient reasonable costs in accordance with Medicare reasonable cost principles, except that reimbursement for prescription drugs under these rules. (7-1-26) 04. Adjustment for Disproportionate Share Hospitals (DSH). All Idaho hospitals serving a disproportionate share of low-income patients must qualify either as a Mandatory DSH or as Deemed DSH to receive IDAHO ADMINISTRATIVE CODE IDAPA 16.03.26 Department of Health & Welfare Medicaid Plan Benefits Section 074 Page 45 a DSH payment. The Department will send each hospital a DSH survey on or before January 31 of each calendar year. A hospital will not receive a DSH payment if the survey is not returned by the deadline, unless good cause is determined by the Department. (7-1-26) a. Mandatory Eligibility for DSH status will be provided for hospitals that: (7-1-26) i. Meet or exceed the disproportionate share threshold under these rules. (7-1-26) ii. Have at least two (2) obstetricians with staff privileges at the hospital who have agreed to provide obstetric services. (7-1-26) (1) This subsection does not apply to a hospital in which the inpatients are predominantly individuals under eighteen (18) years of age; or (7-1-26) (2) Does not offer nonemergency inpatient obstetric services. (7-1-26) iii. The MUR will not be less than one percent (1%). (7-1-26) iv. If an Idaho hospital exceeds both disproportionate share thresholds and other mandatory eligibility is met, the payment adjustment will be the greater amount calculated using the methods of this rule except when less than one and one-half (1 1/2) standard deviations above the mean of all Idaho hospitals. (7-1-26) v. Hospitals qualifying for Mandatory DSH eligibility with Medicaid Inpatient Utilization Rates equal to or exceeding one (1) standard deviation and less than one and one-half (1 1/2) standard deviations above the mean of all Idaho hospitals will receive a DSH payment equal to two percent (2%) of the payments related to the Medicaid inpatient days included in the MUR computation. (7-1-26) vi. Hospitals qualifying for Mandatory DSH eligibility with Medicaid Inpatient Utilization Rates: (7-1-26) (1) Equal to or exceeding one and one-half (1 1/2) standard deviations and less than two (2) standard deviations of the mean of all Idaho hospitals will receive a DSH payment equal to four percent (4%) of the payments related to the Medicaid inpatient days included in the MUR computation. (7-1-26) (2) Exceeding two (2) standard deviations of the mean of all Idaho hospitals will receive a DSH payment equal to six percent (6%) of the payments related to the Medicaid inpatient days included in the MUR computation. (7-1-26) vii. Hospitals qualifying for Mandatory DSH eligibility with Low Income Utilization Rates equal to or exceeding: (7-1-26) (1) Twenty-five percent (25%) will receive a DSH payment equal to four percent (4%) of the payments related to the Medicaid inpatient days included in the MUR computation. (7-1-26) (2) Thirty percent (30%) will receive a DSH payment equal to six percent (6%) of the payments related to the Medicaid inpatient days included in the MUR computation. (7-1-26) b. All hospitals in Idaho that have inpatient utilization rates of at least one percent (1%) only in Idaho inpatient days and meet the requirements unrelated to patient day utilization specified in this subsection will be designated a DSH Hospital. The disproportionate share payment to a Deemed DSH hospital will be the greater of: (7-1-26) i. Five dollars ($5) per Idaho Medicaid inpatient day included in the hospital's MUR computation; or (7-1-26) ii. An amount per Medicaid inpatient day used in the hospital's MUR computation that equals the DSH allotment amount, less the Mandatory DSH payment amount, divided by the number of Medicaid inpatient days IDAHO ADMINISTRATIVE CODE IDAPA 16.03.26 Department of Health & Welfare Medicaid Plan Benefits Section 074 Page 46 used in the MUR computation for all Idaho DSH hospitals. (7-1-26) c. When the DSH allotment amount is insufficient to make the aggregate amount of DSH payments to each DSH hospital, payments to each hospital will be reduced by the percentage by which the DSH allotment amount was exceeded. (7-1-26) d. A DSH payment will not exceed the costs incurred during the year of furnishing services to individuals who are either eligible for medical assistance under the State Plan or were uninsured for health care services provided during the year. (7-1-26) i. Payments made to a hospital for services provided to indigent patients by a state or a unit of local government within a state will not be considered a source of third-party payment. (7-1-26) ii. Claims of uninsured costs that increase the maximum amount that a hospital may receive as a DSH payment must be documented. (7-1-26) e. DSH Will be Calculated on an Annual Basis. A change in a provider's allowable costs as a result of a reopening or appeal will not result in the recomputation of the provider's annual DSH payment. (7-1-26) f. To the extent that audit findings demonstrate that DSH payments exceed the documented hospital specific cost limits, the Department will collect overpayments and redistribute DSH payments. (7-1-26) i. If at any time during an audit the Department discovers evidence suggesting fraud or abuse by a provider, that evidence, in addition to the Department’s final audit report regarding that provider, will be referred to the Medicaid Fraud Unit of the Idaho Attorney General’s Office. (7-1-26) ii. The Department will submit an independent certified audit to CMS for each completed Medicaid State plan rate year, consistent with 42 CFR Part 455, Subpart D, “Independent Certified Audit of State Disproportionate Share Hospital Payment Adjustments.” (7-1-26) iii. If based on the audit of the DSH allotment distribution, the Department determines that there was an overpayment to a provider, the Department will immediately: (7-1-26) (1) Recover the overpayment from the provider; and (7-1-26) (2) Redistribute the amount in overpayment to providers that had not exceeded the hospital-specific upper payment limit during the period in which the DSH payments were determined. The payments will be subject to hospital-specific upper payment limits. (7-1-26) iv. Disproportionate share payments must not exceed the DSH state allotment, except as otherwise required by the SSA. In no event is the Department obligated to use State Medicaid funds to pay more than the State Medicaid percentage of DSH payments due a provider. (7-1-26) 05. Out-of-State Hospitals. Hospitals will have a cost settlement computed with the state of Idaho if the following conditions are met: (7-1-26) a. Total inpatient and outpatient covered charges are more than fifty thousand dollars ($50,000) in the fiscal year; or (7-1-26) b. When less than fifty thousand dollars ($50,000) of covered charges are billed to the state by the provider, and a probable significant underpayment or overpayment is identifiable, and the amount makes it administratively economical and efficient for cost settlement to be requested by either the provider or the state, a cost settlement will be made between the hospital and the Department. (7-1-26) 06. Audit Function. Under a common audit agreement, the Medicare Intermediary may perform any audit required for both Medicare and Medicaid purposes. The Department may elect to perform an audit even though the Medicare Intermediary does not choose to audit the facility. (7-1-26) IDAHO ADMINISTRATIVE CODE IDAPA 16.03.26 Department of Health & Welfare Medicaid Plan Benefits Section 075 Page 47 07. Adequacy of Cost Information. Cost information as developed by the provider must be current, accurate, and in sufficient detail and in such form as needed to support payments made for services rendered to participants. This includes all ledgers, books, reports, records and original evidences of cost (purchase requisitions, purchase orders, vouchers, requisitions for materials, inventories, labor timecards, payrolls, bases for apportioning costs, etc.), which pertain to the determination of reasonable costs, leaving an audit trail capable of being audited. Financial and statistical records will be maintained in a consistent manner from one (1) settlement period to another. (7-1-26) 08. Interim Cost Settlements. The Department may initiate, or a hospital may request an interim cost settlement based on the Medicare cost report as submitted, for hospitals subject to cost settlement. (7-1-26) a. Interim settlement cost report data will be adjusted to reflect Medicaid payments and statistical summary reports sent to providers before the filing deadline. (7-1-26) b. The Department may limit a recovery or payment of an interim settlement amount up to twenty- five percent (25%) of the total settlement amount when the cost report information is in dispute. (7-1-26) 09. Non-Appealable Items. The formula for the determination of the hospital inflation index, the principles of reimbursement that define allowable cost, non-Medicaid program issues, interim rates that follow state and federal rules, and the preliminary adjustments prior to final cost settlement determinations as supported by properly completed cost reports and audits are not acceptable as appealable items. (7-1-26) 10. Interim Reimbursement Rates for Providers Subject to Cost Settlement. The interim reimbursement rates must be reasonable and adequate to meet the necessary costs that are incurred by economically and efficiently operated providers that provide services in conformity with applicable state and federal laws, rules, and quality and safety standards. (7-1-26) a. Interim rates will be adjusted at least annually based on the best information available to the Department. (7-1-26) b. Interim rates will not be adjusted retrospectively upon request for rate review by the provider. (7-1-26) c. The Department may make an adjustment based on the Medicare cost report as submitted and accepted by the Intermediary after the provider's reporting year to bring interim payments made during the period into agreement with the tentative reimbursable amount due the provider at final settlement. If the settlement amount is equal to or greater than ten percent (10%) of the payments received or paid and equal to or greater than one hundred thousand dollars ($100,000), the interim rate will be adjusted to account for half (½) of the difference. (7-1-26)