Washington State Register, Issue 14-22
| Jurisdiction | Washington |
| Library | Washington Register |
| Year | 2014 |
Washington State Register, Issue 14-22 WSR 14-22-003
[ 1 ] Permanent
WSR 14-22-003
PERMANENT RULES
HEALTH CARE AUTHORITY
(Washington Apple Health)
[Filed October 22, 2014, 3:22 p.m., effective November 22, 2014]
Effective Date of Rule: Thirty-one days after filing.
Purpose: The health care authority (agency) is making
changes to hospital rules to allow for payment increases
under the sole community hospital program and to allow for
updates to inpatient conversion factors due to annual medical
education and wage index changes.
Citation of Existing Rules Affected by this Order:
Amending WAC 182-550-7500.
Statutory Authority for Adoption: RCW 41.05.021,
41.05.160.
Adopted under notice filed as WSR 14-19-118 on Sep-
tember 17, 2014.
Number of Sections Adopted in Order to Comply with
Federal Statute: New 0, Amended 0, Repealed 0; Federal
Rules or Standards: New 0, Amended 0, Repealed 0; or
Recently Enacted State Statutes: New 1, Amended 1,
Repealed 0.
Number of Sections Adopted at Request of a Nongov-
ernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Ini-
tiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify,
Streamline, or Reform Agency Procedures: New 0, Amended
0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule
Making: New 0, Amended 0, Repealed 0; Pilot Rule Making:
New 0, Amended 0, Repealed 0; or Other Alternative Rule
Making: New 1, Amended 1, Repealed 0.
Date Adopted: October 22, 2014.
Kevin M. Sullivan
Rules Coordinator
NEW SECTION
WAC 182-550-3830 Adjustments to inpatient rates.
(1) The medicaid agency updates all the following compo-
nents of a hospital's specific diagnosis-related group (DRG)
factor and per diem rates between rebasing periods:
(a) Effective July 1st of each year, the agency updates all
of the following:
(i) Wage index adjustment;
(ii) Direct graduate medical education (DGME);
(iii) Indirect medical education (IME).
(b) Effective January 1, 2015, the agency updates the
sole community hospital adjustment.
(2) The agency does not update the statewide average
DRG factor between rebasing periods, except:
(a) To satisfy the budget neutrality conditions in WAC
182-550-3850; and
(b) When directed by the legislature.
(3) The agency updates the wage index to reflect current
labor costs in the core-based statistical area (CBSA) where a
hospital is located. The agency:
(a) Determines the labor portion by multiplying the base
factor or rate by the labor factor established by medicare;
then
(b) Multiplies the amount in (a) of this subsection by the
most recent wage index information published by the centers
for medicare and medicaid services (CMS) when the rates are
set; then
(c) Adds the nonlabor portion of the base rate to the
amount in (b) of this subsection to produce a hospital-specific
wage adjusted factor.
(4) DGME. The agency obtains DGME information
from the hospital's most recently filed medicare cost report
that is available in the CMS health care cost report informa-
tion system (HCRIS) dataset.
(a) The hospital's medicare cost report must cover a
period of twelve consecutive months in its medicare cost
report year.
(b) If a hospital's medicare cost report is not available on
HCRIS, the agency may use the CMS Form 2552-10 to cal-
culate DGME.
(c) In the case where a hospital has not submitted a CMS
medicare cost report in more than eighteen months from the
end of the hospital's cost reporting period, the agency consid-
ers the current DGME costs to be zero.
(d) The agency calculates the hospital-specific DGME
by dividing the DGME cost reported on worksheet B, part 1
of the CMS cost report by the adjusted total costs from the
CMS cost report.
(5) IME. The agency sets the IME adjustment equal to
the "IME adjustment factor for Operating PPS" available in
the most recent CMS final rule impact file available on
CMS's web site as of May 1st of the rate-setting year.
(6)(a) Effective January 1, 2015, the agency multiplies
the hospital's specific conversion factor and per diem rates by
1.25 if the hospital meets the agency's sole community hospi-
tal criteria in this subsection.
(b) The agency considers an in-state hospital to be a sole
community hospital if all of the following conditions apply.
The hospital must:
(i) Be certified by CMS as a sole community hospital as
of January 1, 2013.
(ii) Have a level III adult trauma service designation
from the department of health as of January 1, 2014.
(iii) Have less than one hundred fifty acute care licensed
beds in fiscal year 2011.
(iv) Be owned and operated by the state or a political
subdivision.
(v) Not qualify for the certified public expenditures
(CPE) payment program defined in WAC 182-550-4650.
AMENDATORY SECTION (Amending WSR 14-14-049,
filed 6/25/14, effective 7/26/14)
WAC 182-550-7500 OPPS rate. (1) The medicaid
agency calculates hospital-specific outpatient prospective
payment system (OPPS) rates using all of the following:
(a) A base conversion factor established by the agency;
(b) ((The latest wage index information established and
published by the centers for medicare and medicaid services
(CMS) at the time the OPPS rates are set for the upcoming
WSR 14-22-007 Washington State Register, Issue 14-22
Permanent [ 2 ]
year. Wage index information reflects labor costs in the cost-
based statistical area (CBSA) where a hospital is located; and
(c))) An adjustment for direct graduate medical educa-
tion (((GME))) (DGME); and
(c) The latest wage index information established and
published by the centers for medicare and medicaid services
(CMS) when the OPPS rates are set for the upcoming year.
Wage index information reflects labor costs in the cost-based
statistical area (CBSA) where a hospital is located.
(2) Base conversion factors. The agency calculates the
((average, or)) base((,)) enhanced ambulatory patient group
(EAPG) conversion factor during a hospital payment system
rebasing. The base is calculated as the maximum amount that
can be used, along with all other payment factors and adjust-
ments described in this chapter, to maintain aggregate pay-
ments across the system. The agency will publish base con-
version factors on its web site.
(3) Wage index adjustments reflect labor costs in the
CBSA where a hospital is located.
(a) The agency determines the labor portion of the base
rate by multiplying the base ((factor or)) rate by the labor fac-
tor established by medicare; then
(b) Multiplying the amount in (a) of this subsection is
multiplied by the most recent wage index information pub-
lished by CMS ((at the time)) when the rates are set; then
(c) The agency adds the nonlabor portion of the base rate
to the amount in (b) of this subsection to produce a hospital-
specific wage adjusted factor.
(4) ((GME)) DGME. The agency obtains the ((GME))
DGME information from the hospital's most recently filed
medicare cost report as available in the CMS health care cost
report information system (HCRIS) dataset.
(a) The hospital's medicare cost report must cover a
period of twelve consecutive months in its medicare cost
report year.
(b) If a hospital's medicare cost report is not available on
HCRIS, the agency may use the CMS Form 2552-10 to cal-
culate ((GME)) DGME.
(c) In the case where a hospital has not submitted a CMS
medicare cost report in ((greater)) more than eighteen months
from the end of the hospital's cost reporting period, the
agency may remove the hospital's ((GME)) DGME adjust-
ment.
(d) The agency calculates the hospital-specific ((GME))
DGME by dividing the ((durable medical equipment))
DGME cost reported on worksheet B, part 1 of the CMS cost
report by the adjusted total costs from the CMS cost report.
(5) The formula for calculating the hospital's final spe-
cific conversion factor is:
EAPG base rate x (.6(wage index) + .4)/(1-((GME)) DGME)
(6) Effective January 1, 2015, the agency multiplies the
hospital's specific conversion factor by 1.25 if the hospital
meets the agency's sole community hospital criteria listed in
(a) of this subsection.
(a) The agency considers an in-state hospital a sole com-
munity hospital if all the following conditions apply. The
hospital must:
(i) Be certified by CMS as a sole community hospital as
of January 1, 2013.
(ii) Have a level III adult trauma service designation
from the department of health as of January 1, 2014.
(iii) Have less than one hundred fifty acute care licensed
beds in fiscal year 2011.
(iv) Be owned and operated by the state or a political
subdivision.
(b) The formula for calculating a sole community hospi-
tal's final conversion factor is:
[EAPG base rate x (.6(wage index) + .4)/(1-DGME)] x 1.25
Reviser's note: The brackets and enclosed material in the text of the
above section occurred in the copy filed by the agency and appear in the Reg-
ister pursuant to the requirements of RCW 34.08.040.
WSR 14-22-007
PERMANENT RULES
OFFICE OF
INSURANCE COMMISSIONER
[Filed October 23, 2014, 9:29 a.m., effective November 23, 2014]
Effective Date of Rule: Thirty-one days after filing.
Purpose: The proposed rule corrects typographical errors
without changing the effect of the rule. WAC 284-43-221 and
284-43-222 reference an incorrect WAC 284-43-130 defini-
tional section.
Citation of Existing Rules Affected by this Order:
Amending WAC 284-43-221 and 284-43-222.
Statutory Authority for Adoption: RCW 48.02.060,
48.44.050, 48.46.200.
Other Authority: RCW 48.20.450, 48.43.515, 48.44.020,
48.44.080, 48.46.030, 45 C.F.R. 156.230, 156.235, 156.245.
Adopted under notice filed as WSR 14-17-050 on
August 14, 2014.
Number of Sections Adopted in Order to Comply with
Federal Statute: New 0, Amended 2, Repealed 0; Federal
Rules or Standards: New 0, Amended 0, Repealed 0; or
Recently Enacted State Statutes: New 0, Amended 0,
Repealed 0.
Number of Sections Adopted at Request of a Nongov-
ernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Ini-
tiative: New 0, Amended 2, Repealed 0.
Number of Sections Adopted in Order to Clarify,
Streamline, or Reform Agency Procedures: New 0, Amended
2, Repealed 0.
Number of Sections Adopted Using Negotiated Rule
Making: New 0, Amended 0, Repealed 0; Pilot Rule Making:
New 0, Amended 0, Repealed 0; or Other Alternative Rule
Making: New 0, Amended 2, Repealed 0.
Date Adopted: October 23, 2014.
Mike Kreidler
Insurance Commissioner
AMENDATORY SECTION (Amending WSR 14-10-017,
filed 4/25/14, effective 5/26/14)
WAC 284-43-221 Essential community providers for
exchange plans—Definition. "Essential community pro-
Washington State Register, Issue 14-22 WSR 14-22-007
[ 3 ] Permanent
vider" means providers listed on the Centers for Medicare
and Medicaid Services Non-Exhaustive List of Essential
Community Providers. This list includes providers and facil-
ities that have demonstrated service to medicaid, low-
income, and medically underserved populations in addition
to those that meet the federal minimum standard, which
includes:
(1) Hospitals and providers who participate in the federal
340B Drug Pricing Program;
(2) Disproportionate share hospitals, as designated annu-
ally;
(3) Those eligible for Section 1927 Nominal Drug Pric-
ing;
(4) Those whose patient mix is at least thirty percent
medicaid or medicaid expansion patients who have approved
applications for the Electronic Medical Record Incentive Pro-
gram;
(5) State licensed community clinics or health centers or
community clinics exempt from licensure;
(6) Indian health care providers as defined in WAC 284-
43-130(((17))) (16);
(7) Long-term care facilities in which the average resi-
dency rate is fifty percent or more eligible for medicaid
during the preceding calendar year;
(8) School-based health centers as referenced for fund-
ing in Sec. 4101 of Title IV of ACA;
(9) Providers identified as essential community provid-
ers by the U.S. Department of Health and Human Services
through subregulatory guidance or bulletins;
(10) Facilities or providers who waive charges or charge
for services on a sliding scale based on income and that do
not restrict access or services because of a client's financial
limitations;
(11) Title X Family Planning Clinics and Title X look-
alike Family Planning Clinics;
(12) Rural based or free health centers as identified on
the Rural Health Clinic and the Washington Free Clinic
Association web sites; and
(13) Federal qualified health centers (FQHC) or FQHC
look-alikes.
AMENDATORY SECTION (Amending WSR 14-10-017,
filed 4/25/14, effective 5/26/14)
WAC 284-43-222 Essential community providers for
exchange plans—Network access. (1) An issuer must
include essential community providers in its provider net-
work for qualified health plans and qualified stand-alone den-
tal plans in compliance with this section and as defined in
WAC 284-43-221.
(2) An issuer must include a sufficient number and type
of essential community providers in its provider network to
provide reasonable access to the medically underserved or
low-income in the service area, unless the issuer can provide
substantial evidence of good faith efforts on its part to con-
tract with the providers or facilities in the service area. Such
evidence of good faith efforts to contract will include docu-
mentation about the efforts to contract but not the substantive
contract terms offered by either the issuer or the provider.
(3) The following minimum standards apply to establish
adequate qualified health plan inclusion of essential commu-
nity providers:
(a) Each issuer must demonstrate that at least thirty per-
cent of available primary care providers, pediatricians, and
hospitals that meet the definition of an essential community
provider in each plan's service area participate in the provider
network;
(b) The issuer's provider network must include access to
one hundred percent of Indian health care providers in a ser-
vice area, as defined in WAC 284-43-130(((17))) (16), such
that qualified enrollees obtain all covered services at no
greater cost than if the service was obtained from network
providers or facilities;
(c) Within a service area, fifty percent of rural health
clinics located outside an area defined as urban by the 2010
Census must be included in the issuer's provider network;
(d) For essential community provider categories of
which only one or two exist in the state, an issuer must
demonstrate a good faith effort to contract with that provider
or providers for inclusion in its network, which will include
documentation about the efforts to contract but not the sub-
stantive contract terms offered by either the issuer or the pro-
vider;
(e) For qualified health plans that include pediatric oral
services or qualified dental plans, thirty percent of essential
community providers in the service area for pediatric oral ser-
vices must be included in each issuer's provider network;
(f) Ninety percent of all federally qualified health centers
and FQHC look-alike facilities in the service area must be
included in each issuer's provider network;
(g) At least one essential community provider hospital
per county in the service area must be included in each
issuer's provider network;
(h) At least fifteen percent of all providers participating
in the 340B program in the service area, balanced between
hospital and nonhospital entities, must be included in the
issuer's provider network;
(i) By 2016, at least seventy-five percent of all school-
based health centers in the service area must be included in
the issuer's network.
(4) An issuer must, at the request of a school-based
health center or group of school-based health centers, offer to
contract with such a center or centers to reimburse covered
health care services delivered to enrollees under an issuer's
health plan.
(a) If a contract is not entered into, the issuer must pro-
vide substantial evidence of good faith efforts on its part to
contract with a school-based health center or group of school-
based health centers. Such evidence of good faith efforts to
contract will include documentation about the efforts to con-
tract but not the substantive contract terms offered by either
the issuer or the provider.
(b) "School-based health center" means a school-based
location for the delivery of health services, often operated as
a partnership of schools and community health organizations,
which can include issuers, which provide on-site medical and
mental health services through a team of medical and mental
health professionals to school-aged children and adolescents.
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