Health, Health Care Financing, Coverage and Reimbursement Policy

Section R414-9-5

Alternative Payment Method

Notice of Proposed Rule

(Amendment)

DAR File No.: 36106
Filed: 04/27/2012 02:29:15 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to clarify alternative payment methods for Federally Qualified Health Centers (FQHCs).

Summary of the rule or change:

This amendment clarifies that a FQHC must calculate only covered beneficiary charges when it calculates the Ratio of Beneficiary Charges to Total Charges Applied to Allowable Cost as part of its agreement with the federal government.

State statutory or constitutional authorization for this rule:

• Section 26-1-5
• Section 26-18-3

Anticipated cost or savings to:

the state budget:

The Department does not anticipate any impact to the state budget because this change only clarifies alternative payment methods for FQHCs.

local governments:

There is no impact to local governments because they do not fund Medicaid services for Medicaid recipients.

small businesses:

The Department does not anticipate any impact to small businesses because this change only clarifies alternative payment methods for FQHCs.

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

The Department does not anticipate any impact Medicaid providers, FQHCs, and to Medicaid recipients because this change only clarifies alternative payment methods for FQHCs.

Compliance costs for affected persons:

The Department does not anticipate any impact to a single Medicaid provider, a single FQHC, or to a Medicaid recipient because this change only clarifies alternative payment methods for FQHCs.

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

Changes in this rule will clarify how regulated entities calculate allowable costs and should reduce the regulatory burden.

David Patton, PhD, 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
CANNON HEALTH BLDG
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:

06/14/2012

This rule may become effective on:

07/01/2012

Authorized by:

David Patton, Executive Director

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

R414-9. Federally Qualified Health Centers.

R414-9-5. Alternate Payment Method.

(1) The Department adopts an Alternate Payment Method (APM). An FQHC is required to calculate the Ratio of Covered Beneficiary Charges to Total Charges Applied to Allowable Cost as part of its agreement with the federal government. As part of that calculation, it allocates allowable costs to Medicaid. The Department multiplies the Medicaid allowable costs by the Medicaid charge percentage to determine the amount to pay. The Department makes interim payments on the basis of billed charges from the FQHC, which reduce the annual settlement amount. Third party liability collections by the FQHC for Medicaid patients also reduce the final cost settlements.

(2) An FQHC participating in the APM must provide the Department annual cost reports and other cost information required by the Department necessary to calculate the annual settlement within ninety days from the close of its fiscal year, including its calculations of its anticipated settlement. The Department reviews submitted cost reports and provides a preliminary payment, if applicable, to FQHCs. Within six months after the end of the FQHC's fiscal year, the Department conducts a review or audit of submitted cost reports and makes a final settlement. This allow for inclusion of late filed claims and adjustments processed after the submitted cost report was prepared. If the Department overpaid an FQHC, the FQHC must repay the overpayment. If the Department underpaid an FQHC, the Department shall pay the FQHC the underpaid amount.

(3) The Department compares the APM reimbursements with the reimbursements calculated using the PPS methodology described in R414-9-4 and pays the greater amount to the FQHC.

 

KEY: Medicaid, facility, reimbursement

Date of Enactment or Last Substantive Amendment: [February 3, 2004]2012

Notice of Continuation: January 26, 2009

Authorizing, and Implemented or Interpreted Law: 26-1-5; 26-18-3