1. (a) DefinitionsFor the purposes of this regulation, the following definitions apply:

   1. (1) "Allowed Cost" means the Medicaid costs reported by each Connecticut instate hospital in their most recent inpatient cost report as filed as of July 31st of each year by the hospitals for the hospital fiscal year.
   2. (2) "Border Hospital" means an out-of-state general hospital which has a common medical delivery area with the State of Connecticut and is deemed a border hospital by the Department on a hospital by hospital basis.
   3. (3) "Connecticut In-state Hospital" means a general hospital located within the boundaries of the State of Connecticut and licensed by the Connecticut State Department of Health Services.
   4. (4) "Department" means the State of Connecticut Department of Income Maintenance.
   5. (5) "Department's Manual" means the Department's Connecticut Medical Assistance Provider Manual which contains the Medical Services Policy as amended from time to time.
   6. (6) "Emergency" means a medical condition (including labor and delivery) manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in placing the patient's health in serious jeopardy, serious impairment to bodily functions, or serious dysfunction of any bodily organ or part.
   7. (7) "General Hospital" means a short-term hospital having facilities, medical staff and all necessary personnel to provide diagnosis, care and treatment of a wide range of acute conditions, including injuries, and shall include a children's general hospital which means a short-term hospital having facilities, medical staff and all necessary personnel to provide diagnosis, care and treatment of a wide range of acute conditions among children, including injuries.
   8. (8) "Inpatient" means a patient who has been admitted to a general hospital for the purpose of receiving medically necessary, appropriate, and quality medical, dental, or other health related services and is present at midnight for the census count.

   9. (9) "Medical Necessity" means medical care provided to:

      1. (A) Correct or diminish the adverse effects of a medical condition;
      2. (B) Assist an individual in attaining or maintaining an optimal level of well-being;
      3. (C) Diagnose a condition; or(D) Prevent a medical condition from occurring.
   10. (10) "Out-of-State Hospital" means a general hospital located outside of the State of Connecticut and is not deemed by the Department to be a border hospital.
   11. (11) "Outpatient" means a person receiving medical, dental, or other health related services in the outpatient department of an approved general hospital which is not providing room and board and professional services on a continuous 24-hour-a-day basis.
   12. (12) "Prior Authorization" means approval for a service from the Department or the Department's agent which may be required by the Department before the provider actually provides the service. Prior authorization is necessary in order to receive reimbursement from the Department. The Department in its sole discretion determines what information is necessary in order to approve a prior authorization request.
   13. (13) "Provider Agreement" means the signed written contractual agreement between the Department and the provider of medical services or goods. It is signed by the provider upon application for enrollment and is effective on the approved date of enrollment. The provider is mandated to adhere to the terms and conditions set forth in the provider agreement in order to participate in the program.
   14. (14) "Rate Year" means the twelve (12) month period beginning on October 1st of each year.
   15. (15) "Total Customary Charges" means the revenue generated by the aggregate of the total customary charges reported by each Connecticut in-state hospital in their most recent inpatient cost report as filed as of July 31st of each year by the hospitals for the hospital fiscal year.

2. (b) Rate Setting

   1. (1) For inpatient and outpatient services rendered on and after the effective date of this regulation, the Department shall pay out-of-state and border hospitals, at a fixed percentage of each out-of-state and border hospital's usual and customary charge. The standard methodology to be employed shall be the fixed percentage calculated in accordance with subsections (b) (1) (A) and (B) of this regulation. However, for inpatient services, the hospital may elect to have its fixed percentage determined in accordance with subsection (b) (1) (C) of this regulation.

      1. (A) For inpatient services the standard fixed percentage shall be calculated by the Department based on the ratio between the allowed cost and total customary charges for Title XIX recipients for all Connecticut in-state general hospitals.
      2. (B) For outpatient services the standard fixed percentage shall be calculated by the Department based on the ratio between the aggregates of the amount paid by the Department and the amount billed to the Department for all Connecticut instate hospital outpatient services. The amount billed represents the hospital's usual and customary charges for outpatient services and the Department's payment represents the amount paid up to the amount allowed in accordance with the Department's current outpatient fee schedule for each Connecticut in-state hospital and as may be amended from time to time. The amount paid by the Department to Connecticut in-state hospitals shall include amounts paid in accordance with limits of payments as may be required by federal law. The fixed percentage shall be determined by the Department utilizing data taken from its most recent and deemed the most complete twelve (12) month period as reported in its Medicaid Management Information System.
      3. (C) However, for inpatient services as defined in this regulation, each out-of-state and border hospital may have its fixed percentage optionally determined based on its total allowable cost under Medicare principles of reimbursement pursuant to Title 42 of the Code of Federal Regulations, Part 413, and as may be hereafter amended. The hospital must submit its most recently available Medicare cost report within the time period specified in subsection (b) (2) (A) below. The Department shall determine from the filed Medicare cost report the ratio of total allowable inpatient cost to gross inpatient revenue. The resulting ratio shall be the hospital's fixed percentage not to exceed 100%. If an out-of-state or border hospital chooses to file for a fixed percentage under this subsection it must maintain all the supporting documentation to justify the amounts claimed. The Department, in its discretion, may audit said hospital and make any adjustment required in favor of the provider or the state resulting from the audit.
      4. (D) The Department shall pay out-of-state and border hospitals utilizing the methodology as set forth in subsection (b) (1) (A), or (B), or (C) of this regulation unless a different methodology is required by federal law, in which case, the required federal methodology shall be employed.

   2. (2) Upon the effective date of this regulation and annually thereafter, meaning at the beginning of the rate year, as defined in this regulation, the Department shall notify each out-of-state and border hospital enrolled in the Connecticut Medicaid Program as to the standard fixed percentages for that rate year.

      1. (A) Each year each out-of-state and border hospital shall have ten (10) days from the date of receipt of said notification to submit a request in writing to the Department, if it wishes to have its inpatient fixed percentage calculated using the optional methodology set forth in accordance with subsection (b) (1) (C).
      2. (B) Failure of the hospital to notify the Department of said election within ten (10) days or failure of the hospital to provide the necessary information described in subsection (b) (1) (C) within said time shall result in the Department making payment to the hospital for inpatient services for the applicable rate year using the standard methodology in accordance with subsection (b) (1) (A) of this regulation.
      3. (C) Upon the effective date of this regulation, the fixed percentages set in accordance with subsections (b) (1) (A) or (B) or (C) of this regulation shall expire at the end of the rate year in which this regulation is made effective.
      4. (D) A hospital which enrolls in the Connecticut Medicaid Program during any rate year may elect to have its inpatient fixed percentage determined in accordance with subsection (b) (1) (C) of this regulation. Such initial fixed percentage shall expire at the end of the rate year in which said fixed percentage is approved by the Department. Thereafter, if the hospital wishes to elect the optional methodology it must comply with the provisions of subsection (b) (1) (C).
      5. (E) If a hospital elects to have its inpatient fixed percentage set in accordance with subsection (b) (1) (C), it may not request a change in said methodology during the rate year in which the fixed percentages are approved by the Department.

3. (c) Provider ParticipationIn order to receive payment from the Connecticut Medicaid Program:

   1. (1) Out-of-state and/or border hospitals must submit a copy of a current and effective license or certification as a hospital issued by the appropriate official state governing body within the boundaries of the state in which the hospital is located.
   2. (2) The out-of-state and/or border hospital must enter into a provider agreement with the Department.
   3. (3) The Department shall determine when an out-of-state hospital qualifies for enrollment as a border hospital.

4. (d) Prior Authorization

   1. (1) Border Hospitals Prior authorization, as defined in this regulation, for inpatient and outpatient services, shall be required for such services in accordance with the Department's Manual, Sections 150.1 and 150.2 pertaining to Connecticut in-state hospitals.

   2. (2) Out-of-state Hospitals (A) Prior authorization for inpatient and outpatient services shall be required for all non-emergency cases as described in subsection (e) of this regulation.

      1. (B) The following services shall not require prior authorization:

5. (i) Care in an emergency situation as defined in this regulation;

   1. (ii) Newborns and/or deliveries; or(iii) Outpatient services for a child for whom the State of Connecticut makes adoption assistance or foster care maintenance payments under Title IV-E of the Social Security Act.

6. (e) Need for Service

   1. (1) Out-of-state hospitals who treat Connecticut Title XIX recipients and are enrolled in the Connecticut Medicaid Program as a border hospital are bound by the same rules and regulations as Connecticut in-state hospitals participating in Title XIX program as set forth in the Department's Manual.

   2. (2) The Connecticut Title XIX program reimburses for medically necessary and appropriate services provided in out-of-state hospitals, other than border hospitals as defined in this regulation, under the following conditions:

      1. (A) For emergency cases as defined in this regulation and necessitating the use of the most accessible general hospital available that is equipped to furnish the services;
      2. (B) For non-emergency cases, when prior authorization is granted by the Department, for the following reasons:
7. (i) Medical services are needed because the recipient's health would be endangered if they were required to travel to Connecticut; or(ii) On the basis of the attending physician's medical advice that the needed medical services or necessary supplementary resources are more readily available in the other State.

(Effective May 23, 1990)