No. 28258: R414-2A. Inpatient Hospital Services

DAR File No.: 28258
Filed: 12/23/2005, 11:58
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rulemaking is necessary to clarify Medicaid policy regarding patient readmissions, reimbursement methodology, reimbursement for physician services, and hyperbaric oxygen therapy, and to implement Medicaid policy into rule pursuant to recent legislation (H.B. 126 (2003)) found in Subsection 26-18-3(2)(a). It is also necessary to change the definition of "Other Practitioner of the Healing Arts" as public comment correctly pointed out that osteopathic surgeons and physicians are defined as "physicians" under Utah law. (DAR NOTE: H.B. 126 (2003) is found at UT L 2003 Ch 324, and was effective 05/05/2003.)

 

Summary of the rule or change:

Subsection R414-2A-9(5) is amended to state that "cost effectiveness" may play a role in determining whether to combine Diagnosis Related Group (DRG) payments for patient readmissions, but is not a primary factor. Also, in Subsection R414-2A-2(8), the phrase "doctor of osteopathy" is removed from the definition of "Other Practitioner of the Healing Arts" because osteopathic surgeons and physicians are defined as "physicians" under Utah law. In addition, Subsection R414-2A-7(7) clarifies service coverage for hyperbaric oxygen therapy and Subsection R414-2A-9(1) clarifies reimbursement methodology under the DRG system. Finally, Subsection R414-2A-7(10) is amended to clarify that physician services are not reimbursed as payment under the DRG. (DAR NOTE: This change in proposed rule has been filed to make additional changes to a proposed repeal and reenactment that was published in the October 15, 2005, issue of the Utah State Bulletin, on page 11. Underlining in the rule below indicates text that has been added since the publication of the proposed rule mentioned above; strike-out indicates text that has been deleted. You must view the change in proposed rule and the proposed amendment together to understand all of the changes that will be enforceable should the agency make this rule effective.)

 

State statutory or constitutional authorization for this rule:

Sections 26-1-5 and 26-18-3, and 42 CFR 440.10

 

Anticipated cost or savings to:

the state budget:

There is no impact to the state budget associated with this rulemaking because it only changes a definition and clarifies Medicaid policy regarding patient readmissions, reimbursement methodology, hyperbaric oxygen therapy, and reimbursement for physician services.

 

local governments:

There is no impact to local governments as a result of this rulemaking because it only changes a definition and clarifies Medicaid policy regarding patient readmissions, reimbursement methodology, hyperbaric oxygen therapy, and reimbursement for physician services.

 

other persons:

There is no impact to other persons as a result of this rulemaking because it only changes a definition and clarifies Medicaid policy regarding patient readmissions, reimbursement methodology, hyperbaric oxygen therapy, and reimbursement for physician services.

 

Compliance costs for affected persons:

There are no compliance costs because this rulemaking only changes a definition and clarifies Medicaid policy regarding patient readmissions, reimbursement methodology, hyperbaric oxygen therapy, and reimbursement for physician services.

 

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

This proposed rule change reflects the ongoing commitment of the Utah Medicaid program to place into rule all standards and policies that impact the public. Impacted providers have had input into these changes. No adverse fiscal impact is anticipated. 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
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 [e-mail]

 

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:

02/14/2006

 

This rule may become effective on:

02/15/2006

 

Authorized by:

David N. Sundwall, Executive Director

 

 

RULE TEXT

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

R414-2A. Inpatient Hospital Services.

R414-2A-1. Introduction and Authority.

This rule defines the scope of inpatient hospital services that are 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 440.10.

 

R414-2A-2. Definitions.

(1) "Admission" means the acceptance of a Medicaid client for inpatient hospital services.

(2) "Diagnosis Related Group (DRG)" is the CMS-coding that determines reimbursement for the resources that a hospital uses to treat a client with a specific diagnosis or medical need and is further described in R414-2A-9 of this rule.

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

(4) "Inpatient" is an individual whose severity of illness requires 24 hours or more of continuous care in a hospital.

(5) "Inpatient Hospital Services" are services that a hospital provides for the care and treatment of inpatients with disorders other than mental illness, under the direction of a physician or other practitioner of the healing arts.

(6) "Leave of Absence" from an inpatient facility is a patient's absence for therapeutic or rehabilitative purposes where the patient does not return by midnight of the same day.

(7) "Observation" means monitoring a patient to evaluate the patient's condition, symptoms, diagnosis, or appropriateness of inpatient admission.

(8) "Other Practitioner of the Healing Arts" means [a doctor of osteopathy,]a doctor of dental surgery[,] or a podiatrist.

(9) "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.

 

R414-2A-3. Client Eligibility Requirements.

Inpatient 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.

 

R414-2A-4. Hospital Admission Requirements.

(1) Each hospital providing inpatient services must have a utilization review plan as described in 42 CFR 482.30.

(2) The attending physician or other practitioner of the healing arts must sign a physician acknowledgement statement that meets the requirements of 42 CFR 412.46.

(3) For psychiatric patients, the attending physician must certify and recertify the need for inpatient psychiatric services as described in 42 CFR 441.152.

 

R414-2A-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 inpatient psychiatric services from the prepaid mental health contractor for the client's county of residence.

 

R414-2A-6. Service Coverage.

(1) Inpatient hospital services encompass all medically necessary and therapeutic medical services and supplies that the physician or other practitioner of the healing arts orders that are appropriate for the diagnosis and treatment of a patient's illness.

(2) The Department does not pay for physician services rendered by a non-Medicaid provider.

(3) Diagnostic services performed by the admitting hospital or by an entity wholly owned or operated by the hospital within three days prior to the date of admission to the hospital, are inpatient services.

(4) Medical supplies, appliances, drugs, and equipment required for the care and treatment of a client during an inpatient stay are reimbursed as part of payment under the DRG .

(5) Services associated with pregnancy, labor, and vaginal or C-section delivery are reimbursed as inpatient service as part of payment under the DRG, even if the stay is less than 24 hours

(6) Services provided to an inpatient that could be provided on an outpatient basis are reimbursed as part of payment under the DRG.

(7) Inpatient hospital psychiatric services are available only to clients not residing in a county covered by a prepaid mental health plan.

 

R414-2A-7. Limitations.

(1) Inpatient admissions for 24 hours or more solely for observation or diagnostic evaluation do not qualify for reimbursement under the DRG system.

(2) Inpatient hospital care for treatment of alcoholism or drug dependency is limited to medical treatment of symptoms associated with drug or alcohol detoxification.

(3) Abortion procedures must first be reviewed and preauthorized by the Department as meeting the requirements of Utah Code 26-18-4 and 42 CFR 441.203.

(4) Sterilization and hysterectomy procedures must first be reviewed and preauthorized by the Department as meeting the requirements of 42 CFR 441, Subpart F.

(5) Organ transplant services are governed by R414-10A, Transplant Services Standards.

(6) Take home supplies, dressings, non-rental durable medical equipment, and drugs are reimbursed as part of payment under the DRG.

(7) Hyperbaric oxygen therapy is limited to service in a hospital facility in which the hyperbaric unit has been accredited or approved by [the Joint Commission on Healthcare Organizations or ]the Undersea and Hyperbaric Medical Society.

(8) Inpatient services solely for pain management do not qualify for reimbursement under the DRG system. Pain management is adjunct to other Medicaid services.

(9) Medicaid does not cover inpatient admissions for the treatment of eating disorders.

(10) Physician services provided by a physician who is paid by a hospital are inpatient services reimbursed as part of payment [under the DRG]billed on a 1500 form. Payment for physician services provided by providers who are not paid by the hospital is governed by R414-10, Physician Services.

(11) Inpatient rehabilitation services must first be reviewed and preauthorized.

(12) Inpatient psychiatric services not covered by mental health contractual agreements must first be reviewed and preauthorized by the Department to assure that the admission meets the requirements of 42 CFR 412.27 and Part 441, Subpart D.

 

R414-2A-8. Coinsurance.

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

 

R414-2A-9. Reimbursement Methodology.

(1) Payments for inpatient hospital services are paid on a prospectively determined amount for each qualifying patient discharge under a Diagnosis Related Group (DRG) system. DRG weights are established to recognize the relative amount of resources consumed to treat a particular type of patient. The DRG classification scheme assigns each hospital patient to one of over 500 categories or DRGs based on the patient's diagnosis, age and sex, surgical procedures performed, complicating conditions, and discharge status. Each DRG is assigned a weighting factor which reflects the quantity and type of hospital services generally needed to treat a patient with that condition. A preset reimbursement is assigned to each DRG. The DRG system allows for outliers for those discharges that have significant variance from the norm.

(2) For purposes of reimbursement, the day of admission is counted as a full day and the day of discharge is not counted.

(3) When a patient receives SNF-level, ICF-level, or other sub-acute care in an acute-care hospital or in a hospital with swing-bed approval, payment is made at the swing-bed rate.

(4) Reimbursement for services in the emergency department is limited to codes and diagnoses that are medically necessary emergency services. The provider manual lists appropriate emergency codes. The provider must list the discharge diagnosis on the claim form as one of the first five diagnoses.

(5) If a patient is readmitted for the same or a similar diagnosis within 30 days of a discharge, the Department may review and evaluate both claims to determine if, based on severity of illness[,] and intensity of service, [and cost effectiveness, ]the claims should be combined into a single DRG payment or paid separately. Cost effectiveness may also be part of this determination but is not a primary factor.

(6) Exceptions to the 30-day readmission policy must still meet the severity of illness requirements for the allowance of a second DRG payment and are limited to:

(a) pregnancy;

(b) chemotherapy; and

(c) hyperbilirubinemia appearing in newborn infants within the first week of life.

(7) The Department pays for physician interpretation of laboratory services separately from the DRG payment. Laboratory technical services are included within the DRG for the inpatient admission.

(8) If an observation stay meets the intensity and severity for inpatient hospitalization and exceeds 24 hours, the patient becomes an inpatient and the observation services are reimbursed as part of payment under the DRG.

 

KEY: Medicaid

Date of Enactment or Last Substantive Amendment: 200[5]6

Notice of Continuation: November 26, 2002

Authorizing, and Implemented or Interpreted Law: 26-1-5; 26-18-3; 26-18-3.5