LEGAL NOTICE

COMMONWEALTH OF VIRGINIA

DEPARTMENT OF MEDICAL ASSISTANCE SERVICES

NOTICE OF INTENT TO AMEND

(Pursuant to §1902(a)(13) of the Act (U.S.C. 1396a(a)(13))

THE VIRGINIA STATE PLAN FOR MEDICAL ASSISTANCE

This Notice was posted on May 31, 2017

The Virginia Department of Medical Assistance Services (DMAS) hereby affords the public notice of its intention to amend the Virginia State Plan for Medical Assistance to provide for changes to the Methods and Standards for Establishing Payment Rates—Inpatient Hospital Services (12 VAC 30-70).

This notice is intended to satisfy the requirements of 42 C.F.R. § 447.205 and of § 1902(a)(13) of the Social Security Act, 42 U.S.C. § 1396a(a)(13).  A copy of this notice is available for public review from William Lessard, Provider Reimbursement Division, DMAS, 600 Broad Street, Suite 1300, Richmond, VA  23219, or via e-mail at:  William.Lessard@dmas.virginia.gov.

DMAS is specifically soliciting input from stakeholders, providers, and beneficiaries on the potential impacts of the items listed below, particularly the potential impact on access for the following 1) no inflation for hospitals, graduate medical education payments, indirect medical education payments, disproportionate share hospital payments, and outpatient hospital rates; and 2) the limit on inflation for home health and outpatient rehabilitation agencies for fiscal year 2018.  Comments or inquiries may be submitted, in writing, within 30 days of this notice publication to Mr. Lessard and such comments are available for review upon request.  Comments may also be submitted, in writing, on the Town Hall public comment forum attached to this notice.

This notice is available for public review on the Regulatory Town Hall (www.townhall.com), on the General Notices page, found at:  https://townhall.virginia.gov/L/generalnotice.cfm

Reimbursement Changes Affecting Hospitals (12 VAC 30-70)

1.  With one exception, here will be no inflation adjustment for inpatient operating rates for hospitals (including freestanding, psychiatric, and long stay hospitals), graduate medical education (GME) payments, indirect medical education (IME) payments, Disproportionate Share Hospital (DSH) payments in Fiscal Year 2018 (July 1, 2017 through June 30, 2018).  Children's Hospital of the King's Daughters will receive an inflation adjustment.

 The expected decrease in annual aggregate expenditures is $25,812,741.

2.  Effective July 1, 2017, the Department of Medical Assistance Services shall amend the State Plan for Medical Assistance to increase the formula for indirect medical education (IME) for freestanding children's hospitals with greater than 50 percent Medicaid utilization in 2009. The formula for these hospitals for indirect medical education for inpatient hospital services provided to Medicaid patients but reimbursed by capitated managed care providers shall be identical to the formula for Type One hospitals. The IME payments shall continue to be limited such that total payments do not exceed the federal uncompensated care cost limit to which disproportionate share hospital payments are subject, excluding third party reimbursement for Medicaid eligible patients.

The expected increase in annual aggregate expenditures is $8,000,000.

3.  Effective July 1, 2017, supplemental payments shall be made for 15 new medical residency slots beginning in fiscal year 2018. The department shall make supplemental payments to the following hospitals for the specified number of primary care residencies: Sentara Norfolk General (2 residencies), Carilion Medical Center (6 residencies), Centra Lynchburg General Hospital (1 residency), Riverside Regional Medical Center (2 residencies), Bon Secours St. Francis Medical Center (2 residencies).  The department shall make supplemental payments to Carilion Medical Center for two psychiatric residencies.

The supplemental payment for each new qualifying residency slot shall be $100,000 annually minus any Medicare residency payment for which the hospital is eligible. Supplemental payments shall be made for up to four years for each new qualifying resident. The hospital will be eligible for the supplemental payments as long as the hospital maintains the number of residency slots in total and by category as a result of the increase in fiscal year 2018.  Payments shall be made quarterly following the same schedule for other medical education payments.

Subsequent to the award of a supplemental payment, the hospital must provide documentation annually by June 1 that they continue to meet the criteria for the supplemental payments and report any changes during the year to the number of residents.

The expected increase in annual aggregate expenditures is $1,500,000.

4.  Effective July 1, 2017, supplemental payments shall be made to the primary teaching hospitals affiliated with an LCME accredited medical school located in Planning District 23 that is a political subdivision of the Commonwealth and an LCME accredited medical school located in Planning District 5 that has a partnership with a public university.

The supplemental payment for each qualifying hospital shall be the difference between the hospital’s Medicaid payments and the hospitals disproportionate share limit (OBRA 93 DSH limit) for the most recent year for which its disproportionate share limit has been calculated.

The expected increase in annual aggregate expenditures is approximately $82,000,000.

Reimbursement Changes Affecting Nursing Facilities (12 VAC 30-90)

1.  Effective July 1, 2017, the price for each nursing facility peer group shall be based on the following adjustment factors:

a) Direct costs – increase from 105 percent to 106.8 percent of the peer group day-weighted median neutralized and inflated cost per day for freestanding nursing facilities.

b) Indirect costs – increase from 100.7 percent to 101.3 percent of the peer group day-weighted median inflated cost per day for freestanding nursing facilities.

The expected increase in annual aggregate expenditures is $6,521,366.

2.  Effective July 1, 2017 through June 30, 2020, nursing facilities located in the former Danville Metropolitan Statistical Area (MSA) shall be paid the operating rates calculated for the Other MSA peer group. For purposes of calculating rates under the rebasing effective July 1, 2017, DMAS shall use the peer groups based on the existing regulations. For future rebasings, DMAS shall permanently move these facilities to the Other MSA peer group.

The expected increase in annual aggregate expenditures is $3,207,820.

3.  Effective July 1, 2017, DMAS shall increase the direct and indirect operating rates under the nursing facility price based reimbursement methodology by 15 percent for nursing facilities where at least 80 percent of the resident population has one or more of the following diagnoses: quadriplegia, traumatic brain injury, multiple sclerosis, paraplegia, or cerebral palsy. In addition, a qualifying facility must have at least 90 percent Medicaid utilization and a case mix index of 1.15 or higher in fiscal year 2014.

The expected increase in annual aggregate expenditures is $1,239,022.

Reimbursement Changes Affecting Other Services (12 VAC 30-80)

1.  With one exception, here will be no inflation adjustment for outpatient hospital rates for hospitals in Fiscal Year 2018 (July 1, 2017 through June 30, 2018).  Children's Hospital of the King's Daughters will receive an inflation adjustment.

The expected decrease in annual aggregate expenditures is $6,453,185.

2.  Add rates for new peer support services for children and adults with mental health conditions and/or substance use disorders.

The expected increase in annual expenditures is $5,797,290.

3.  DMAS shall limit inflation to 50 percent of the inflation factor for home health and outpatient rehabilitation agencies for FY2018.

The expected decrease in annual aggregate expenditures is $221,624.