Health, Health Care Financing, Coverage and Reimbursement Policy

Rule R414-3A

Outpatient Hospital Services

Notice of Proposed Rule

(Amendment)

DAR File No.: 33515
Filed: 03/29/2010 04:21:24 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to reduce the reimbursement percentage that the Department pays to outpatient hospitals.

Summary of the rule or change:

This amendment reduces the reimbursement percentage that the Department pays to outpatient hospitals.

State statutory or constitutional authorization for this rule:

• Section 26-18-3

Anticipated cost or savings to:

the state budget:

The Department anticipates that this change will reduce annual total expenditures by $10,889,500. A portion of the reduction will impact the state teaching hospital.

local governments:

There may be some cost to local governments that may own an outpatient hospital. The exact amount is unknown at this time; however, it would be some portion of the estimated savings to the state budget.

small businesses:

There will be some cost to outpatient hospital owners. The exact amount is unknown at this time; however, it would be the overall estimated savings to the state budget between this group and local governments.

persons other than small businesses, businesses, or local governmental entities:

There will be some cost to outpatient hospital owners. The exact amount is unknown at this time; however, it would be the overall estimated savings to the state budget between this group and local governments.

Compliance costs for affected persons:

There may be some cost to a local government entity that may own an outpatient hospital. The exact amount is unknown at this time; however, it would be some portion of the estimated savings to the state budget. In addition, there will be some cost to a single outpatient hospital owner. The exact amount is unknown at this time; however, it would be the overall estimated savings to the state budget between all outpatient hospital owners and affected local governments.

Comments by the department head on the fiscal impact the rule may have on businesses:

Adoption of this rule change has been openly discussed during the appropriations process. Impacted businesses are aware of this proposal. Fiscal impact is justified to keep expenditures within revenue.

David N. Sundwall, MD Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Health
Health Care Financing, Coverage and Reimbursement Policy
288 N 1460 W
SALT LAKE CITY, UT 84116-3231

Direct questions regarding this rule to:

• Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at cdevashrayee@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/17/2010

This rule may become effective on:

05/24/2010

Authorized by:

David Sundwall, Executive Director

R414. Health, Health Care Financing, Coverage and Reimbursement Policy.

R414-3A. Outpatient Hospital Services.

R414-3A-1. Introduction and Authority.

This rule defines the scope of outpatient hospital services available to Medicaid clients for the treatment of disorders other than mental disease. This rule is authorized under Utah Code 26-18-3 and governs the services allowed under 42 CFR 440.20.

 

R414-3A-2. Definitions.

(1) "Allowed charges" mean actual charges submitted by the provider less any charges for non-covered services.

(2) "CHEC" means Child Health Evaluation and Care and is the Utah specific term for the federally mandated program of Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) for children under the age of 21.

(3) "Clinical Laboratory Improvements Act" (CLIA) is the Centers for Medicare and Medicaid Services (CMS) program that limits reimbursement for laboratory services based on the equipment and capability of the physician or laboratory to provide an appropriate, competent level of laboratory service.

(4) "Hyperbaric Oxygen Therapy" is therapy that places the patient in an enclosed pressure chamber for medical treatment.

(5) "Other Practitioner of the Healing Arts" means a doctor of dental surgery or a podiatrist.

(6) "Outpatient" means professional services provided for less than a 24-hour period regardless of the hour of admission, whether or not a bed is used, or whether or not the patient remains in the facility past midnight.

(7) "Prepaid Mental Health Plan" means the prepaid, capitated program through which the Department pays contracted community mental health centers to provide all needed inpatient and outpatient mental health services to residents of the community mental health center's catchment area who are enrolled in the plan.

 

R414-3A-3. Client Eligibility Requirements.

Outpatient hospital services are available to categorically and medically needy individuals who are under the care of a physician or other practitioner of the healing arts.

 

R414-3A-4. Program Access Requirements.

(1) The Department reimburses for outpatient hospital services and supplies only if they are:

(a) furnished in a hospital;

(b) provided by hospital personnel by or under the direction of a physician or dentist;

(c) provided as evaluation and management of illness or injury under hospital medical staff supervision and according to the written orders of a physician or dentist.

(2) All outpatient hospital services are subject to review by the Department.

 

R414-3A-5. Prepaid Mental Health Plan.

A Medicaid client residing in a county for which a prepaid mental health contractor provides mental health services must obtain authorization for outpatient psychiatric services from the prepaid mental health contractor for the client's county of residence.

 

R414-3A-6. Services.

(1) Services appropriate in the outpatient hospital setting for adequate diagnosis and treatment of a client's illness are limited to less than 24 hours and encompass medically necessary diagnostic, therapeutic, rehabilitative, or palliative medical services and supplies ordered by a physician or other practitioner of the healing arts.

(2) Outpatient hospital services include:

(a) the service of nurses or other personnel necessary to complete the service and provide patient care during the provision of service;

(b) the use of hospital facilities, equipment, and supplies; and

(c) the technical portion of clinical laboratory and radiology services.

(3) Laboratory services are limited to tests identified by the Centers for Medicare and Medicaid Services (CMS) where the individual laboratory is CLIA certified to provide, bill and receive Medicaid payment.

(4) Cosmetic, reconstructive, or plastic surgery is limited to:

(a) correction of a congenital anomaly;

(b) restoration of body form following an injury; or

(c) revision of severe disfiguring and extensive scars resulting from neoplastic surgery.

(5) Abortion procedures are limited to procedures certified as medically necessary, cleared by review of the medical record, approved by division consultants, and determined to meet the requirements of Utah Code 26-18-4 and 42 CFR 441.203.

(6) Sterilization procedures are limited to those that meet the requirements of 42 CFR 441, Subpart F.

(7) Nonphysician psychosocial counseling services are limited to evaluations and may be provided only through a prepaid mental health plan by a licensed clinical psychologist for:

(a) mentally retarded persons;

(b) cases identified through a CHEC/EPSDT screening; or

(c) victims of sexual abuse.

(8) Outpatient individualized observation of a mental health patient to prevent the patient from harming himself or others is not covered.

(9) Sleep studies are available only in a sleep disorder center accredited by the American Academy of Sleep Medicine.

(10) Hyperbaric Oxygen Therapy is limited to service in a hospital facility in which the hyberbaric unit is accredited as a level one facility by the Undersea and Hyperbaric Medical Society.

(11) Lithotripsy is covered by an all-inclusive fixed fee. This payment covers all hospital and ambulatory surgery-related services for lithotripsy on the same kidney for 90 days, including repeat treatments. Lithotripsy for treatment of the other kidney is a separate service.

(12) Reimbursement for services in the emergency department is limited to codes and diagnoses that are medically necessary emergency services as described in the provider manual.[ The diagnosis reflecting the primary reason for emergency services must be used and must be one of the first five diagnoses listed on the claim form.]

(13) Take home supplies and durable medical equipment are not reimbursable.

(14) Prescriptions are not a covered Medicaid service for a client with the designation "Emergency Services Only Program" printed on the Medicaid Identification Card.

 

R414-3A-7. Prior Authorization.

Prior authorization must be obtained on certain medical and surgical procedures in accordance with R414-1-14.

 

R414-3A-8. Copayment Policy.

Each Medicaid client is responsible for a copayment as established in the Utah State Medicaid Plan and incorporated by reference in R414-1.

 

R414-3A-9. Reimbursement for Services.

(1) Except for emergency room, lithotripsy, laboratory and radiology services, the payment level for outpatient hospital claims is based on [77%]69% of allowed charges for urban hospitals and [93%]83% of allowed charges for rural hospitals.

(2) Payments for emergency room services vary depending on urban and rural designation and whether the service is designed as "emergency" or "non-emergency." The "emergency" designation is based on the principal diagnosis according to ICD-9 Code. Rural hospitals receive [98%]88% of charges for emergency services and [65%]58% for non-emergency use of the emergency room. Urban hospitals receive [98%]88% of charges for emergencies and [40%]36% of charges for non-emergency use of the emergency room.

(3) Payment for laboratory[ and], radiology, physical therapy, and occupational therapy services provided in a n outpatient hospital[ to outpatients] is based on HCPCS codes and an established fee schedule, unless a lesser amount is billed. The fee schedule used to pay physicians is used to establish payment rates.

(4) Billed charges shall not exceed the usual and customary charge to private pay patients.

(5) Payments for all outpatient services are limited to the aggregate annual amount Medicare would pay for the same services as required by 42 CFR 447.321.

(6) Percent of charges reimbursement will be based on provider charges in effect March 1, 2010.

 

KEY: Medicaid

Date of Enactment or Last Substantive Amendment: [June 26, 2007]2010

Notice of Continuation: November 8, 2007

Authorizing, and Implemented or Interpreted Law: 26-1-5; 26-18-2.3; 26-18-3(2); 26-18-4