CABINET FOR HEALTH AND
FAMILY SERVICES
Department for Medicaid
Services
Division of Policy and
Operations
(New Administrative
Regulation)
907 KAR 10:025.
Reimbursement provisions and requirements regarding outpatient psychiatric
hospital services.
RELATES TO: KRS 205.520, 42 U.S.C.
1396a(a)(10)(B), 42 U.S.C. 1396a(a)(23)
STATUTORY AUTHORITY: KRS 194A.030(2),
194A.050(1), 205.520(3)
NECESSITY, FUNCTION, AND CONFORMITY: The
Cabinet for Health and Family Services, Department for Medicaid Services, has a
responsibility to administer the Medicaid Program. KRS 205.520(3) authorizes
the cabinet, by administrative regulation, to comply with any requirement that
may be imposed or opportunity presented by federal law to qualify for federal
Medicaid funds. This administrative regulation establishes the reimbursement
provisions and requirements regarding Medicaid Program outpatient behavioral
health services provided by psychiatric hospitals to Medicaid recipients who
are not enrolled with a managed care organization.
Section 1. (1) "Billing provider" means the individual who, group of
individual providers that, or organization that:
(a) Is authorized to bill the department
or a managed care organization for a service; and
(b) Is eligible to be reimbursed by the department
or a managed care organization for a service.
(2) "Department" means
the Department for Medicaid Services or its designee.
(3) "Federal
financial participation" is defined by 42 C.F.R. 400.203.
(4) "Managed
care organization" means an entity for which the Department for Medicaid
Services has contracted to serve as a managed care organization as defined in
42 C.F.R. 438.2.
(5) "Provider"
is defined by KRS 205.8451(7).
Section 2. General Requirements. For the
department to reimburse for a service covered under this administrative
regulation, the service shall:
(1) Meet the requirements established in
907 KAR 10:020; and
(2) Be covered in accordance with 907 KAR
10:020.
Section 3. Reimbursement. (1)(a) Except as
established in Section 4 of this administrative regulation, the department
shall reimburse a psychiatric hospital on an interim basis for outpatient behavioral
health services at a facility specific outpatient cost-to-charge ratio based on
the facility’s most recently filed cost report that has been reviewed and
approved by the department.
(b) An outpatient behavioral health
service cost-to-charge ratio shall be expressed as a percent of the psychiatric
hospital’s outpatient behavioral health service charges.
(2) Except as established in subsection
(4) of this section, a facility specific outpatient behavioral health service cost-to-charge
ratio paid during the course of a psychiatric hospital’s fiscal year shall be
designed to result in reimbursement, at the psychiatric hospital’s fiscal year
end, equaling ninety-five (95) percent of the psychiatric hospital’s total
outpatient behavioral health services costs, excluding diagnostic laboratory
services costs, incurred during the psychiatric hospital’s fiscal year.
(3) Except as established in subsection
(4) of this section:
(a) Upon reviewing a psychiatric
hospital’s as submitted cost report for the hospital’s fiscal year, the
department shall preliminarily settle reimbursement to the psychiatric hospital
equal to ninety-five (95) percent of the psychiatric hospital’s total
outpatient behavioral health services costs, excluding diagnostic laboratory
services costs, incurred in the corresponding fiscal year; and
(b) Upon receiving and reviewing a
psychiatric hospital’s finalized outpatient behavioral health services cost
report for the hospital’s fiscal year, the department shall settle final reimbursement
to the facility equal to ninety-five (95) percent of the psychiatric hospital’s
total outpatient behavioral health services costs, excluding diagnostic
laboratory services costs, incurred in the corresponding fiscal year.
(4)(a) The department’s total
reimbursement for psychiatric hospital outpatient behavioral health services
shall not exceed the aggregate limit established in 42 C.F.R. 447.321.
(b) If projections indicate for a given
state fiscal year that reimbursing for a psychiatric hospital’s outpatient
behavioral health services at ninety-five (95) percent of costs would result in
the department’s total psychiatric hospital outpatient behavioral health service
reimbursement exceeding the aggregate limit established in 42 C.F.R. 447.321,
the department shall proportionately reduce the final psychiatric hospital outpatient
behavioral health service reimbursement for each psychiatric hospital to equal
a percent of costs which shall result in the total psychiatric hospital outpatient
behavioral health service reimbursement equaling the aggregate limit established
in 42 C.F.R. 447.321.
(5) The department shall not reimburse
for a service billed by or on behalf of an entity or individual that is not a
billing provider.
Section 4. Initial Interim Reimbursement and New
Hospital Reimbursement. (1)(a) Except as established in subsection (2) of this
section, until a psychiatric hospital has submitted to the department a cost
report containing twelve (12) months of outpatient behavioral health services cost
information that has been reviewed and approved by the department, the
department shall reimburse the psychiatric hospital on an interim basis for
outpatient behavioral health services using the most recently available statewide
average cost-to-charge ratio for in-state acute care hospitals.
(b) The department shall update the
statewide average
in-state acute care hospital cost-to-charge ratio effective July 1 of each
year.
(2)(a) After the department has
established a cost-to-charge ratio for at least two (2) psychiatric hospitals
pursuant to Section 3 of this administrative regulation, the department shall
reimburse on an interim basis a newly participating psychiatric hospital for
which a cost report containing twelve (12) months of outpatient behavioral
health services information has not been reviewed and approved by the
department, the statewide average cost-to-charge ratio of in-state psychiatric
hospitals.
(b) The department shall update the
statewide average
in-state psychiatric hospital cost-to-charge ratio effective July 1 of each
year.
Section 5. Cost Reporting Requirements. (1) A psychiatric
hospital participating in the Medicaid Program shall submit to the department a
copy of the Medicare cost report it submits to CMS, an electronic cost report
file (ECR), the Supplemental Medicaid Schedule KMAP-1, the Supplemental
Medicaid Schedule KMAP-4, and the Supplemental Medicaid Schedule KMAP-6.
(a) A cost report shall be submitted:
1. For the fiscal year used by the psychiatric
hospital; and
2. Within five (5) months after the close
of the psychiatric hospital’s fiscal year.
(b) Except as provided in subparagraphs 1,
2, or 3 of this paragraph, the department shall not grant a cost report
submittal extension.
1. The department shall grant an
extension if an extension has been granted by Medicare. If an extension has
been granted by Medicare, when the facility submits its cost report to Medicare,
it shall simultaneously submit a copy of the cost report to the department.
2. If a catastrophic circumstance exists,
as determined by the department (for example flood, fire, or other equivalent
occurrence), the department shall grant a thirty (30) day extension.
3. The department shall extend the
deadline for a psychiatric hospital to submit a cost report if:
a. The psychiatric hospital:
(i) Requests the extension in writing;
and
(ii) Describes the circumstances
necessitating the extension; and
b. The department approves the extension.
(c) A psychiatric hospital shall include
all Medicaid outpatient behavioral health services costs on the cost report
that it submits to:
1. Medicare; and
2. The department.
(2)(a) If a cost report submittal date
lapses and no extension has been granted, the department shall immediately
suspend all payment to the psychiatric hospital for outpatient behavioral
health services until a complete cost report is received.
(3) If a cost report indicates that payment
is due by a psychiatric hospital to the department, the psychiatric hospital
shall submit the amount due or submit a payment plan request with the cost report.
(4) If a cost report indicates a payment
is due by a psychiatric hospital to the department and the psychiatric hospital
fails to remit the amount due or request a payment plan, the department shall
suspend future payment to the psychiatric hospital for outpatient behavioral
health services until the psychiatric hospital remits the payment or submits a
request for a payment plan.
(5) An estimated payment shall not be
considered payment-in-full until a final determination of cost has been made by
the department.
(6) A cost report submitted by a psychiatric
hospital to the department shall be subject to departmental audit and review.
(7) Within seventy (70) days of receipt
from the Medicare intermediary, a hospital shall submit to the department a
printed copy of the final Medicare-audited cost report including adjustments.
(8)(a) If it is determined that an
additional payment is due by a psychiatric hospital after a final determination
of cost has been made by the department, the additional payment shall be due by
a hospital to the department within sixty (60) days after notification.
(b) If a psychiatric hospital does not
submit the additional payment within sixty (60) days, the department shall
withhold future payment to the psychiatric hospital until the department has
collected in full the amount owed by the psychiatric hospital to the department.
Section 6. Outpatient Psychiatric Hospital
Laboratory Services Reimbursement.
(1) The department shall reimburse for an
in-state or out-of-state outpatient psychiatric hospital diagnostic laboratory
service:
(a) At the Medicare-established technical
component rate for the service in accordance with 907 KAR 1:028 if a
Medicare-established component rate exists for the service; or
(b) By multiplying the facility’s current
outpatient cost-to-charge ratio by its billed laboratory charges if no Medicare
rate exists for the service.
(2) Laboratory service reimbursement, in
accordance with subsection (1) of this section, shall be:
(a) Final; and
(b) Not settled to cost.
Section 7. Out-of-State Outpatient
Psychiatric Hospital Services Reimbursement.
(1)(a) Except as established in paragraph
(b) of this subsection, excluding laboratory services, reimbursement for
psychiatric hospital outpatient behavioral health services provided by an
out-of-state hospital shall equal ninety-five (95) percent of the statewide average
in-state psychiatric hospital cost-to-charge ratio multiplied by the applicable
covered Medicaid charges for the service.
(b) The department shall update the
statewide average
in-state psychiatric hospital cost-to-charge ratio effective July 1 of each
year.
(2) Out-of-state hospital reimbursement, in
accordance with subsection (1) of this section, shall be:
(a) Final; and
(b) Not settled to cost.
Section 8. Not Applicable to Managed Care
Organizations. A managed care organization shall not be required to reimburse
in accordance with this administrative regulation for a service covered
pursuant to:
(1) 907 KAR 10:020; and
(2) This administrative regulation.
Section 9. Federal Approval and Federal
Financial Participation. The department’s reimbursement for services pursuant
to this administrative regulation shall be contingent upon:
(1) Receipt of federal financial
participation for the reimbursement; and
(2) Centers for Medicare and Medicaid
Services’ approval for the reimbursement.
Section 10. Appeals. A psychiatric hospital may
appeal a decision by the department regarding the application of this administrative
regulation in accordance with 907 KAR 1:671.
Section 11. Incorporation by Reference.
(1) The following material is incorporated by reference:
(a) "Supplemental Worksheet E-3,
Part III", May 2004;
(b) "Supplemental Medicaid Schedule
KMAP-1", January 2007;
(c) "Supplemental Medicaid Schedule
KMAP-4", January 2007;
(d) The "Supplemental
Medicaid Schedule KMAP-5", November 2011; and
(e) "Supplemental Medicaid Schedule
KMAP-6", January 2007.
(2) This material may be inspected,
copied, or obtained, subject to applicable copyright law:
(a) At the Department for Medicaid
Services, 275 East Main Street, Frankfort, Kentucky 40601, Monday through
Friday, 8 a.m. to 4:30 p.m.; or
(b) Online at the department’s Web site
at http://www.chfs.ky.gov/dms/incorporated.htm.
LISA LEE, Commissioner
AUDREY TAYSE HAYNES, Secretary
APPROVED BY AGENCY: April 10, 2015
FILED WITH LRC: April 13, 2015 at 3 p.m.
PUBLIC HEARING AND
PUBLIC COMMENT PERIOD: A public hearing on this
administrative regulation shall, if requested, be held on May 22, 2015 at 9:00
a.m. in the Health Services Auditorium, Suite B, Health Services
Building, First Floor, 275 East Main Street, Frankfort, Kentucky 40621. Individuals interested in attending this hearing
shall notify this agency in writing by May 15, 2015 five (5) workdays prior to
the hearing, of their intent to attend. If no notification of intent to attend
the hearing is received by that date, the hearing may be canceled. The hearing
is open to the public. Any person who attends will be given an opportunity to
comment on the proposed administrative regulation. A transcript of the public
hearing will not be made unless a written request for a transcript is made. If
you do not wish to attend the public hearing, you may submit written comments
on the proposed administrative regulation. You may submit written comments
regarding this proposed administrative regulation until close of business June
1, 2015. Send written notification of intent to attend the public hearing or
written comments on the proposed administrative regulation to:
CONTACT
PERSON: Tricia Orme, Office of Legal Services, 275 East Main Street 5 W-B,
Frankfort, Kentucky 40601, phone (502) 564-7905, fax (502) 564-7573, tricia.orme@ky.gov.
REGULATORY IMPACT
ANALYSIS And Tiering Statement
Contact person: Stuart Owen (502) 564-4321
(1) Provide a brief summary of:
(a) What this administrative regulation
does: This new administrative regulation establishes the reimbursement
provisions and requirements regarding Medicaid Program outpatient behavioral
health services provided by psychiatric hospitals. This administrative
regulation is being promulgated in conjunction with 907 KAR 10:020 (Coverage
provisions and requirements regarding psychiatric hospital outpatient
behavioral health services). Psychiatric hospitals are authorized to provide,
to Medicaid recipients, outpatient behavioral health services related to a
mental health disorder, substance use disorder, or co-occurring disorders. The
array of services includes a screening; an assessment; psychological testing;
crisis intervention; mobile crisis services; day treatment; peer support; parent
or family peer support; intensive outpatient program services; individual outpatient
therapy; group outpatient therapy; family outpatient therapy; collateral
outpatient therapy; service planning; a screening, brief intervention, and
referral to treatment for a substance use disorder; assertive community treatment;
comprehensive community support services; and therapeutic rehabilitation
program services. The Department for Medicaid Services (DMS) will ultimately
reimburse a psychiatric hospital ninety-five (95) percent of the hospital’s
costs for outpatient behavioral health services. To achieve this each psychiatric
hospital will annually submit a cost report identifying all of the hospital’s
outpatient behavioral health services’ costs incurred for the given fiscal
year. DMS will review and audit the report and compare the reimbursement paid
to the hospital on an interim basis (during the course of the given fiscal
year) to the psychiatric hospital’s incurred costs. If DMS’s interim
reimbursement exceeded the psychiatric hospital’s incurred costs for the fiscal
year, the psychiatric hospital will remit the amount due back to DMS. If DMS’s interim
reimbursement was less than the psychiatric hospital’s costs, DMS will send the
amount owed to the psychiatric hospital to equate to the incurred costs. DMS
will use the most recent cost report to establish an interim reimbursement
(cost-to-charge ratio) to pay the psychiatric hospital during the course of the
fiscal year. For the initial year, as no cost report yet exists, DMS will pay
on an interim basis a reimbursement equal to the statewide average
cost-to-charge ratio for acute care hospitals.
(b) The necessity of this administrative
regulation: This administrative regulation is necessary to comply with federal
mandates. Section 1302(b)(1)(E) of the Affordable Care Act mandates that
"essential health benefits" for Medicaid programs include
"mental health and substance use disorder services, including behavioral
health treatment" for all recipients. 42 U.S.C. 1396a(a)(23), is known as
the freedom of choice of provider mandate. This federal law requires the
Medicaid Program to "provide that (A) any individual eligible for medical
assistance (including drugs) may obtain such assistance from any institution,
agency, community pharmacy or person, qualified to perform the service or
services required (including an organization which provides such services, or
arranges for their availability, on a prepayment basis), who undertakes to
provide him such services." 42 U.S.C. 1396a(a)(10)(B) requires the
Medicaid Program to ensure that services are available to Medicaid recipients
in the same amount, duration, and scope. Expanding the provider base (to
include psychiatric hospitals) will help ensure Medicaid recipient access to
services statewide and reduce or prevent the lack of availability of services
due to demand exceeding supply in any given area.
(c) How this administrative regulation
conforms to the content of the authorizing statutes: This administrative
regulation conforms to the content of the authorizing statutes by complying
with federal mandates and enhancing and ensuring Medicaid recipients’ access to
behavioral health services.
(d) How this administrative regulation
currently assists or will assist in the effective administration of the
statutes: This administrative regulation will assist in the effective
administration of the authorizing statutes by complying with federal mandates
and enhancing and ensuring Medicaid recipients’ access to behavioral health services.
(2) If this is an amendment to an
existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this
existing administrative regulation: This is a new administrative regulation.
(b) The necessity of the amendment to
this administrative regulation: This is a new administrative regulation.
(c) How the amendment conforms to the
content of the authorizing statutes: This is a new administrative regulation.
(d) How the amendment will assist in the
effective administration of the statutes: This is a new administrative
regulation.
(3) List the type and number of
individuals, businesses, organizations, or state and local government affected
by this administrative regulation: Psychiatric hospitals, behavioral health
professionals authorized to provide outpatient behavioral health services in psychiatric
hospitals, and Medicaid recipients in need of outpatient behavioral health
services will be affected by the administrative regulation. Currently, there
are twelve (12) psychiatric hospitals enrolled in the Medicaid Program. The
following behavioral health professionals are authorized to provide outpatient
behavioral health services in a psychiatric hospital: licensed psychologists,
advanced practice registered nurses, licensed professional clinical counselors,
licensed clinical social workers, licensed marriage and family therapists, licensed
psychological practitioners, licensed psychological associates, certified
social workers, licensed professional counselor associates, marriage and family
therapy associates, licensed behavior analysts, licensed assistant behavior
analysts, licensed professional art therapists, licensed professional art
therapist associates, certified alcohol and drug counselors, peer support
specialists, and community support associates.
(4) Provide an analysis of how the
entities identified in question (3) will be impacted by either the
implementation of this administrative regulation, if new, or by the change, if
it is an amendment, including:
(a) List the actions that each of the
regulated entities identified in question (3) will have to take to comply with
this administrative regulation or amendment. Psychiatric hospitals who wish to
provide outpatient behavioral health services will need to comply with the
service requirements.
(b) In complying with this administrative
regulation or amendment, how much will it cost each of the entities identified
in question (3). No cost is projected.
(c) As a result of compliance, what
benefits will accrue to the entities identified in question (3). Psychiatric
hospitals will benefit by receiving Medicaid Program reimbursement for
outpatient behavioral health services. Behavioral health professionals
authorized to provide outpatient behavioral health services will benefit by
having more employment opportunities in Kentucky. Medicaid recipients in need
of outpatient behavioral health services will benefit from an expanded base of
providers from which to receive these services.
(5) Provide an estimate of how much it will
cost to implement this administrative regulation:
(a) Initially: DMS is unable to
accurately estimate the costs of expanding the outpatient behavioral health services
provider base due to the variables involved as DMS cannot estimate the
utilization of these services in psychiatric hospitals compared to utilization
in other authorized provider settings (independent behavioral health providers,
community mental health centers, federally-qualified health centers, rural
health clinics, and primary care centers.) However, an actuary with whom DMS
contracted has estimated an average per recipient per month increase (to DMS)
of $27.00 associated with DMS’s expansion of behavioral health services
(including substance use disorder services) as well as behavioral health
providers this year.
(b) On a continuing basis: The response
in paragraph (a) also applies here.
(6) What is the source of the funding to
be used for the implementation and enforcement of this administrative
regulation: The sources of revenue to be used for implementation and enforcement
of this administrative regulation are federal funds authorized under the Social
Security Act, Title XIX and matching funds of general fund appropriations.
(7) Provide an assessment of whether an
increase in fees or funding will be necessary to implement this administrative
regulation, if new, or by the change if it is an amendment. Neither an increase
in fees nor funding is necessary to implement this administrative regulation.
(8) State whether or not this administrative
regulation establishes any fees or directly or indirectly increases any fees:
This administrative regulation neither establishes nor increases any fees.
(9) Tiering: Is tiering applied? Tiering
is not applied as the policies apply equally to the regulated entities.
FEDERAL MANDATE ANALYSIS
COMPARISON
1. Federal statute or regulation
constituting the federal mandate. Section 1302(b)(1)(E) of the Affordable Care
Act, 42 U.S.C. 1396a(a)(10)(B), 42 U.S.C. 1396a(a)(23), and 42 U.S.C.
1396a(a)(30)(A).
2. State compliance standards. KRS
205.520(3) states: "Further, it is the policy of the Commonwealth to take
advantage of all federal funds that may be available for medical assistance. To
qualify for federal funds the secretary for health and family services may by
regulation comply with any requirement that may be imposed or opportunity that
may be presented by federal law. Nothing in KRS 205.510 to 205.630 is intended
to limit the secretary's power in this respect."
3. Minimum or uniform standards contained
in the federal mandate. Substance use disorder services are federally mandated
for Medicaid programs. Section 1302(b)(1)(E) of the Affordable Care Act
mandates that "essential health benefits" for Medicaid programs
include "mental health and substance use disorder services, including
behavioral health treatment." 42 U.S.C. 1396a(a)(23), is known as the
freedom of choice of provider mandate. This federal law requires the Medicaid
Program to "provide that (A) any individual eligible
for medical assistance (including drugs) may obtain such assistance from any
institution, agency, community pharmacy or person, qualified to perform the
service or services required (including an organization which provides such
services, or arranges for their availability, on a prepayment basis), who
undertakes to provide him such services." Medicaid recipients enrolled
with a managed care organization may be restricted to providers within the
managed care organization’s provider network. The Centers for Medicare and Medicaid
Services (CMS) – the federal agency which oversees and provides the federal
funding for Kentucky’s Medicaid Program – has expressed to the Department for
Medicaid Services (DMS) the need for DMS to expand its substance use disorder
provider base to comport with the freedom of choice of provider requirement. 42
U.S.C. 1396a(a)(10)(B) requires the Medicaid Program to ensure that services
are available to Medicaid recipients in the same amount, duration, and scope as
available to other individuals (non-Medicaid.) Expanding the provider base will
help ensure Medicaid recipient access to services statewide and reduce or
prevent the lack of availability of services due to demand exceeding supply in
any given area. Similarly, 42 U.S.C. 1396a(a)(30)(A) requires Medicaid state
plans to: "...provide such methods and procedures
relating to the utilization of, and the payment for, care and services
available under the plan (including but not limited to utilization review plans
as provided for in section 1903(i)(4)) as may be necessary to safeguard against
unnecessary utilization of such care and services and to assure that payments
are consistent with efficiency, economy, and quality of care and are sufficient
to enlist enough providers so that care and services are available under the
plan at least to the extent that such care and services are available to the
general population in the geographic area."
4. Will this administrative regulation
impose stricter requirements, or additional or different responsibilities or
requirements, than those required by the federal mandate? The administrative
regulation does not impose stricter than federal requirements.
5. Justification for the imposition of
the stricter standard, or additional or different responsibilities or requirements.
The administrative regulation does not impose stricter than federal
requirements.
FISCAL NOTE ON STATE OR
LOCAL GOVERNMENT
1. What units, parts or divisions of
state or local government (including cities, counties, fire departments, or
school districts) will be impacted by this administrative regulation? The Department
for Medicaid Services will be affected by the amendment to this administrative
regulation.
2. Identify each state or federal statute
or federal regulation that requires or authorizes the action taken by the
administrative regulation. KRS 194A.030(2), 194A.050(1), 205.520(3).
3. Estimate the effect of this
administrative regulation on the expenditures and revenues of a state or local
government agency (including cities, counties, fire departments, or school districts)
for the first full year the administrative regulation is to be in effect.
(a) How much revenue will this
administrative regulation generate for the state or local government (including
cities, counties, fire departments, or school districts) for the first year?
The amendment is not expected to generate revenue for state or local
government.
(b) How much revenue will this
administrative regulation generate for the state or local government (including
cities, counties, fire departments, or school districts) for subsequent years?
The amendment is not expected to generate revenue for state or local
government.
(c) How much will it cost to administer
this program for the first year? DMS is unable to accurately estimate the costs
of expanding the outpatient behavioral health services provider base due to the
variables involved as DMS cannot estimate the utilization of these services in psychiatric
hospitals compared to utilization in other authorized provider settings (independent
behavioral health providers, community mental health centers,
federally-qualified health centers, rural health clinics, and primary care
centers.) However, an actuary with whom DMS contracted has estimated an average
per recipient per month increase (to DMS) of $27 associated with DMS’s expansion
of behavioral health services (including substance use disorder services) as
well as behavioral health providers this year.
(d) How much will it cost to administer
this program for subsequent years? The response to question (c) also applies
here.
Note: If specific
dollar estimates cannot be determined, provide a brief narrative to explain the
fiscal impact of the administrative regulation.
Revenues (+/-):
Expenditures (+/-):
Other Explanation:
