Virginia Regulatory Town Hall
Department of Medical Assistance Services
Board of Medical Assistance Services
Methods and Standards for Establishing Payment Rates; in-Patient Hospital Care [12 VAC 30 ‑ 70]
Action is Exempt from Article 2 of the Administrative Process Act
2016 and 2017 Provider Reimbursement Changes
Action 4877
General Information
Action Summary 1. The proposed amendments at 12 VAC 30-70-281 and 12 VAC 30-70-291 update current state regulation to indicate: a. Effective July 1, 2017, the Department of Medical Assistance Services (DMAS) will increase the formula for IME for freestanding children’s hospitals with greater than 50 percent Medicaid utilization in 2009 as a substitute for DSH payments to be identical to the formula used for Type One hospitals. b. Effective July 1, 2017, supplemental payments shall be made for up to 25 new medical residency slots for primary care, high need specialties, and underserved areas. The department shall make supplemental payments to the following hospitals for the specified number of primary residencies: Sentara Norfolk General, Carilion Medical Center, Centra Lynchburg Hospital, Riverside Regional Medical Center, and Bon Secours St. Francis Medical Center. 2. The proposed amendments at 12 VAC 30-80-180, 12 VAC 30 80-200 will limit inflation to 50 percent of the inflation factor for home health and outpatient rehabilitation agencies in fiscal year 2018. 3. The proposed amendments at 12 VAC 30-90-44 will update the price for each nursing facility peer group and other changes to peer groups. 4. The proposed amendments at 12 VAC 30-70-351 reduce state FY2017 inflation by 50% for inpatient and outpatient hospital operating (including freestanding psychiatric and long stay hospitals), graduate medical expenses (GME), indirect medical education (IME), and disproportionate share hospital (DSH) payments and outpatient hospital rates. 5. The proposed amendments at 12 VAC 30-90-264 convert the specialized care rate methodology to a fully prospective state fiscal year rate, effective July 1, 2016. This would be accomplished consistent with the existing cost-based methodology by adding inflation to the per diem costs subject to existing ceilings for direct, indirect and ancillary costs from the most recent settled cost report prior to the state fiscal year for which the rates are being established. DMAS shall use the state fiscal year inflation rate recently adopted for regular nursing facilities. Partial year inflation shall be applied to per diem costs if the provider fiscal year end is different than the state fiscal year. Ceilings shall also be maintained by state fiscal year. 6. The proposed amendments at 12 VAC 30-70-221 and 12 VAC 30-70-381 change the methodology for costing claims used to rebase weights from a fee-for-service global cost-to-charge methodology to a methodology that uses per-diems and cost-to-charge ratios by cost center for the fee-for-service and managed care claims, effective July 1, 2016. In a similar fashion, each hospital’s total costs by claim using this methodology will be divided by the total charges for the hospital cost-to-charge ratio. 7. This set of changes will: a. Eliminate existing regulations at 12 VAC 30-80-30(A)(1) related to limitations for emergency physician services; b. Amend existing regulations at 12 VAC 30-80-30(A)(17)(b) to include information regarding how supplemental payments are calculated for Children’s Hospital of the King’s Daughters effective July 1, 2015; c. Add a new section with language at 12 VAC 30-50-30(A)(18.1)regarding supplemental payments for services provided by physicians at freestanding children’s hospitals serving children in Planning District 8 (Children’s National Health System); d. Add a new section with language at 12 VAC 30-80-30(A)(21) implementing supplemental payments to state- owned or operated clinics. 8. Additional language added at 12 VAC 30-80-36(B)(4)(a) regarding the inflation adjustment to base year outpatient hospital costs for state fiscal year 2017 and 2018. 9. DMAS is making minor technical changes to incorporate into regulations language that CMS has approved in State Plan amendments.
Chapters Affected
  VAC Chapter Name Action Type
Primary 12 VAC 30-70 Methods and Standards for Establishing Payment Rates; in-Patient Hospital Care Amend Existing Regulation
Other chapters
  12 VAC 30 - 80 Methods and Standards for Establishing Payment Rate; Other Types of Care Amend Existing Regulation
  12 VAC 30 - 90 Methods and Standards for Establishing Payment Rates for Long-Term Care Amend Existing Regulation
Executive Branch Review This Action is exempt from Article 2 of the Administrative Process Act. The normal executive branch review process is not required. As such, it can be submitted directly for publication and is effective upon publication.
Exempt Citation: These changes are required by the 2017 General Assembly in the Acts of Assembly, Chapter 836: Item 306.CCC, 306.RRR.5, 306.YYY, 306.ZZZ, 306.FFFF, 306.GGGG, 306.IIII, 306.NNNN, and 306.ZZZZ.
RIS Project Yes  [005178]
Associated Mandates
New Periodic Review This action will not be used to conduct a new periodic review.
Stages associated with this regulatory action.
Stage ID Stage Type Status
8012 Final Stage complete. This regulation became effective on 02/21/2018.
Contact Information
Name / Title: Emily McClellan  / Regulatory Supervisor
Address: Policy Division, DMAS
600 E. Broad Street, Suite 1300
Richmond, VA 23219
Email Address:
Phone: (804)371-4300    FAX: (804)786-1680    TDD: ()-

This person is the primary contact for this chapter.