Determination of Publicly Assisted Outpatient Rate

(1) The Outpatient Rate for services provided to publicly-aided patients will be an approved Cost-to- Charge Ratio which will be determined for each hospital as follows: (a) The Division will determine the actual FY 1993 operating and capital costs of providing Outpatient services as reported in the RSC-403. The Division may adjust this amount upon audit. (b) The Division will determine the actual FY 1993 charges for providing Outpatient services as reported in the RSC-403. The Division may adjust this amount upon audit. (c) The FY 1996 approved Cost-to-Charge Ratio will be hospital's actual FY 1993 outpatient cost divided by the hospital's actual FY 1993 outpatient charges. (d) For Hospitals that have a FY 1996 approved Cost-to-Charge Ratio, the FY 1997 approved Cost-to-Charge Ratio will be the FY 1996 approved Cost-to-Charge Ratio unless adjusted as described below or until it is superseded by new regulation or contract with the Division ofMedical Assistance. 1. Determination of the Medicaid Cost-to-Charge shall be made in accordance with the information filed on the Hospital DHCFP-450 Form. 2. The Cost-to-Charge Ratio shall be adjusted downward prospectively, pro-rated for months remaining in the rate year, if the charge per visit as reported in the Hospital DHCFP­ 450 Form increases beyond the FY 1996 to FY 1997 inflation factor as calculated pursuant to the methodology in 114.1 CMR 39.05(2)(c)2. a. The adjustment factor shall equal the inflation factor divided by the sum of one plus the percent increase in charges. b. The pro-rated adjustment shall be determined as follows: i. Step One: a) the adjustment factor multiplied by the total number of months in the year that the increased charges are in effect less b) the number of months that the increased charges are in effect before the adjusted CCR will take effect. ii. The pro-rated adjustment shall equal Step One of the adjustment as calculated pursuant to 114.1 CMR 39.06(1)(d)2.b.i. divided by the number of months remaining in the year after the adjusted CCR will take effect. c. The Adjusted Cost-to-Charge Ratio shall be the FY 1996 approved Cost-to-Charge Ratio multiplied by the pro-rated adjustment factor as calculated pursuant to 39.06(1)(d)2.b.ii. d. The Adjusted Cost-to-Charge Ratio shall take effect the first day of the month following the Division’s approval. (e) For Hospitals that do not have a FY 1996 approved Cost-to-Charge Ratio, the FY 1997 approved cost-to-Charge Ratio will be the ratio of allowed outpatient costs, as determined by the Division, to projected outpatient revenue. (2) For new hospitals, and hospitals which have closed a majority of beds and now provide some services in a new location under new management, who have not yet established a base year of outpatient costs and charges, but have anoutpatient rate established by the Commission, the Division will calculate the Outpatient Rate using the following methodology (a) For those hospitals that have an outpatient rate established by the Division (formerly the Commission) the FY 1997 outpatient rate shall be the FY 1996 outpatient rate, unless adjusted pursuant to 114.1 CMR 39.06(1)(d)1. and 2., or superseded by new regulation or contract with the Division of Medical Assistance. (b) For those hospitals that do not have anoutpatient rate previously established by the Division, the FY 1997 outpatient rate shall be the ratio of allowed outpatient costs, as determined by the Division, to projected outpatient revenue. (3) The Outpatient Rate shall not exceed 100%. (4) Reimbursement for Outpatient services will be determined by multiplying the hospital's Outpatient Rate by the published charge for each service.