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

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); Methods and Standards for Establishing Payment Rates—Other Types of Care (12 VAC 30-80); and Methods and Standards for Establishing Payment Rates—Long Term Care (12 VAC 30-90).  The Department shall implement a number of changes in these reimbursement methodologies effective July 1, 2011, pursuant to Item 297 of the 2011 Appropriations Act.

Reimbursement Changes Affecting Hospitals (12 VAC 30-70)

12VAC30-70-50 is being amended to restore the efficiency incentive and eliminate the inflation adjustment for long-stay hospitals. This change is mandated by Item 297.AAA of the Appropriation Act and represents an increase in total expenditures of $1,044,204.

12VAC30-70-331 and 12VAC30-70-341 are being amended to restore the reduction to the hospital adjustment factor from 78 to 74 percent for acute and rehab services and from 84 to 80 percent for psychiatric services. Corresponding changes will be applied for Type One hospitals.  This change is mandated by Item 297.AAAA of the Appropriation Act and represents an increase in total expenditures of $48,328,528.  

12VAC30-70-351 is being amended to:

1) Eliminate the inflation adjustment for inpatient hospital operating rates.  This change is mandated by Item 297.BBB.1a of the Appropriation Act and represents a cost savings of $93,109,278 in total expenditures.

2) Eliminate the inflation adjustment for inpatient hospital disproportionate share hospital (DSH) payments for all hospitals.  This change is mandated by Item 297.BBB.1b of the Appropriation Act and represents a cost savings of $20,952,448 in total expenditures.

3) Eliminate inflation adjustment for graduate medical education (GME) payments for all hospitals.  This change is mandated by Item 297.BBB.1c of the Appropriation Act and reflects a cost savings of $5,501,618 in total expenditures.

4) Eliminate inflation adjustment for freestanding psychiatric hospital operating rates.  This change is mandated by Item 297.CCC of the Appropriation Act and represents a cost savings of $840,334 in total expenditures.

12VAC30-70-271 is being amended to reduce inpatient capital reimbursement from 75 to 71 percent of cost with corresponding changes for Type One hospitals and Virginia hospitals with Medicaid utilization greater than 50 percent. This change is mandated by Item 297.HHHH.2 of the Appropriation Act and represents a cost savings of $5,299,070 in total expenditures.

12VAC30-70-291 is being amended to eliminate Neonatal Intensive Care Unit (NICU) indirect medical education (IME) payments for freestanding children’s hospitals and restore NICU IME for hospitals with greater than 50 percent Medicaid NICU utilization or Medicaid NICU days in excess of 4,500. This change is mandated by Item 297.MMM of the Appropriation Act and represents a cost savings of $1,200,000 in total expenditures.

12VAC30-70-420 is being amended to reduce operating rates for out-of-state non cost-reporting hospitals to the lesser of the home state’s reimbursement or the statewide average. This change is mandated by Item 297.ZZZ of the Appropriation Act and represents in a cost savings of $5,930,580 in total expenditures.

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

12VAC30-80-20 is being amended to reduce outpatient hospital reimbursement from 80 to 76 percent of cost. Corresponding changes will be applied for Type One hospitals. This change is mandated by Item 297.BBBB.2 of the Appropriation Act and represents a cost savings of $21,604,678 in total expenditures.

12VAC30-80-190 is being amended to restore the reduction to physician rates by four percent. This change is mandated by Item 297.CCCC.2 of the Appropriation Act and represents an increase in expenditures of $29,428,550 in total expenditures.

12VAC30-80-30 is being amended to restore dental fees by four percent. This change is mandated by Item 297.DDDD.2 of the Appropriation Act and represents an increase in total expenditures of $4,669,680.

12VAC30-80-180 is being amended to eliminate inflation adjustment for home health agencies. This change is mandated by Item 297.FFF of the Appropriation Act and represents a cost savings of $804,262 in total expenditures.

12VAC30-80-200 is being amended to eliminate inflation adjustment for outpatient rehabilitation agencies. This change is mandated by Item 297.GGG of the Appropriation Act and represents a cost savings of $330,992 in total expenditures.

12VAC30-80-30 is being amended to establish supplemental payments for physician practices affiliated with Virginia freestanding children’s hospitals. This change is mandated by Item 297.LLLL of the Appropriation Act and represents an increase in total expenditures of $3,900,000.

12VAC30-80-40 is being amended to reduce the maximum reimbursement for pharmaceutical products to Average Wholesale Price minus 13.1 percent.  This change is mandated by Item 297.SSS.2 of the Appropriation Act and represents a cost savings of $2,713,170 in total expenditures.

12VAC30-80-40 is being amended to eliminate the five dollar per month/per member unit dose dispensing fee for members residing in a nursing facility.  The change is mandated by Item 297.NNNN of the Appropriation Act and represents a cost savings of $647,416 in total expenditures.

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

12VAC30-90-41 is being amended to eliminate inflation adjustment and freeze ceilings for nursing facilities and specialized care facilities. This change is mandated by Item 297.DDD.1a of the Appropriation Act and represents a cost savings of $36,655,904 in total expenditures.

12VAC30-90-41 is being amended to restore the reduction to nursing facility operating rates by three percent. This change is mandated by Item 297.DDD.1d of the Appropriation Act and represents an increase in total expenditures of $27,639,324. 

12VAC30-90-36 is being amended to reduce nursing facility capital rental rate floor from 9.0 to 8.0 percent. This change is mandated by Item 297.DDD.1c of the Appropriation Act and represents a cost savings of $9,876,818 in total expenditures.

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, and this notice is available for public review on the Regulatory Town Hall (www.townhall.com).  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 at the same address.