PURPOSE: This rule establishes the formula for determining the Federal Reimbursement Allowance each hospital, except public hospitals which are operated primarily for the care and treatment of mental disorders and any hospital operated by the Department of Health, is required to pay for the privilege of engaging in the business of providing inpatient health care in Missouri.

PUBLISHER’S NOTE: The secretary of state has determined that the publication of the entire text of the material which is incorporated by reference as a portion of this rule would be unduly cumbersome or expensive. Therefore, the material which is so incorporated is on file with the agency who filed this rule, and with the Office of the Secretary of State. Any interested person may view this material at either agency’s headquarters or the same will be made available at the Office of the Secretary of State at a cost not to exceed actual cost of copy reproduction. The entire text of the rule is printed here. This note refers only to the incorporated by reference material.

1. (1) Federal Reimbursement Allowance (FRA). FRA shall be assessed as described in this section.

   1. (A) Definitions.

      1. 1. Bad debts—Amounts considered to be

uncollectible from accounts and notes receivable that were created or acquired in providing services. Allowable bad debts include the costs of caring for patients who have insurance but their insurance does not cover the particular service procedures or treatment rendered.

1. 2. Base cost report—Desk-reviewed

Medi care/Medicaid cost report for the latest hospital fiscal year ending during the calendar year. (For example, a provider has a cost report for the nine (9) months ending 9/30/95 and a cost report for the three (3) months ending 12/31/95.) If a hospital’s base cost report is less than or greater than a twelve (12)-month period, the data shall be adjusted, based on the number of months reflected in the base cost report to a twelve (12)-month period.

1. 3. Charity care—Those charges written

off by a hospital based on the hospital’s policy to provide health care services free of charge or at a reduced charge because of the indigence or medical indigence of the patient.

1. 4. Contractual allowances—Difference

between established rates for covered services and the amount paid by third-party payers under contractual agreements.

1. 5. Department—Department of Social

Services.

1. 6. Director—Director of the Department

of Social Services.

1. 7. Division—Division of Medical

Services, Department of Social Services.

1. 8. Engaging in the business of providing

inpatient health care—Accepting payment for inpatient services rendered.

1. 9. Fiscal period—Twelve (12)-month

reporting period determined by each hospital.

1. 10. Gross hospital service charges—

Total charges made by the hospital for inpatient and outpatient hospital services that are covered under 13 CSR 70-15.010.

1. 11. Hospital—A place devoted primarily

to the maintenance and operation of facilities for the diagnosis, treatment or care for not fewer than twenty-four (24) hours in any week of three (3) or more nonrelated individuals suffering from illness, disease, injury, deformity or other abnormal physical conditions; or a place devoted primarily to provide for not fewer than twenty-four (24) hours in any week, medical or nursing care for three (3) or more nonrelated individuals. The term hospital does not include convalescent, nursing, shelter or boarding homes as defined in Chapter 198, RSMo.

1. 12. Net operating revenue—Gross

charges less bad debts, less charity care, and less contractual allowances times the trend indices listed in 13 CSR 70-15.010(3)(B).

1. 13. Other operating revenues—The

other operating revenue is total other revenue less government appropriations, less donations and less income from investments times the trend indices listed in 13 CSR 70- 15.010(3)(B).

1. (B) Each hospital, except public hospitals which are operated primarily for the care and treatment of mental disorders and any hospital operated by the Department of Health, engaging in the business of providing inpatient health care in Missouri shall pay an FRA. The FRA shall be calculated by the Department of Social Services.

   1. 1. The FRA shall be sixty-three dollars

and sixty-three cents ($63.63) per inpatient 13 CSR 70-15

hospital day from the 1991 base cost report for Federal Fiscal Year 1994. The FRA shall be as described in sections (2), (3) and (4) for succeeding periods.

1. 2. If a hospital does not have a base cost

report, total net revenues less Medicaid net revenues shall be estimated as follows:

1. A. Hospitals required to pay the FRA

shall be divided in quartiles based on total beds;

1. B. Average net revenues less Medicaid

net revenues shall be individually summed and divided by the total beds in the quartile to yield an average net revenue less Medicaid net revenue per bed; and

1. C. Finally, the number of beds for the

hospital without the base cost report shall be multiplied by the average net revenue less Medicaid net revenue per bed.

1. 3. The FRA assessment for hospitals

that merge operation under one (1) Medicare and Medicaid provider number shall be determined as follows:

1. A. The previously determined FRA

assessment for each hospital shall be combined under the active Medicaid provider number for the remainder of the state fiscal year after the division receives official notification of the merger; and

1. B. The FRA assessment for subse-

quent fiscal years shall be based on the combined data for both facilities.

1. (C) Each hospital shall submit to the Department of Social Services a statement that accurately reflects if the hospital—

   1. 1. Is publicly or privately owned;
   2. 2. Is operated primarily for the care and

treatment of mental disorders;

1. 3. Is operated by the Department of

Health; and

1. 4. Accepts payment for services ren-

dered.

1. (D) The Department of Social Services shall prepare a confirmation schedule of the information from each hospital’s third prior year cost report and provide each hospital with this schedule.

   1. 1. The schedule shall include:

      1. A. Provider name;
      2. B. Provider number;
      3. C. Fiscal period;
      4. D. Total number of licensed beds;
      5. E. Total inpatient days;
      6. F. Total cost of contractual allowance

for Medicare;

1. G. Total cost of contractual allowance

for Medicaid;

1. H. Gross charges;
2. I. Charity care; and
3. J. Bad debts.
4. 2. Each hospital required to pay the

FRA shall review this information and provide the Department of Social Services with correct information, if the information supplied by the Department of Social Services is incorrect, or affirm the information is correct within fifteen (15) days of receiving the confirmation schedule. If the hospital fails to submit the corrected data within the fifteen (15)-day time period, the hospital shall be barred from submitting corrected data later to have its FRA assessment or the add-on payments from 13 CSR 70-15.010 adjusted.

1. 3. Each hospital may request that its

FRA be offset against any Missouri Medicaid payment due. Assessments shall be allocated and deducted over the applicable period.

1. 4. The FRA owed or, if an offset has

been requested, the balance due, if any, after that offset shall be remitted by the hospital to the Department of Social Services on a twice monthly basis, on the first and fifteenth of each month beginning October 15, 1992. The remittance shall be made payable to the director of the Department of Revenue. The amount remitted shall be deposited in the state treasury to the credit of the Federal Reimbursement Allowance Fund.

1. (E) In accordance with sections 62.055 and 208.156, RSMo, hospitals may seek a hearing before the Administrative Hearing Commission from a final decision of the director of the department or division.

1. (2) Federal Reimbursement Allowance (FRA) subsequent to Federal Fiscal Year 1994.

   1. (A) The FRA shall continue at the Federal Fiscal Year 1994 prorated assessment level for the nine (9) Medicaid payrolls from October 1, 1994 through February 19, 1995.
   2. (B) The FRA shall be seventy-two dollars and seventy-five cents ($72.75) per inpatient hospital day from the 1992 base cost report multiplied by nine twenty-fourths (9/24) for the period February 20, 1995 through June 30, 1995.

2. (3) FRA for State Fiscal Year (SFY) 1996.

   1. (A) The FRA for SFY 96 shall be seventyfive dollars and eighty-seven cents ($75.87) per inpatient hospital day from the 1993 base cost report.

3. (4) FRA for State Fiscal Year 1997.

   1. (A) The FRA assessment for State Fiscal Year 1997 shall be determined at the rate of five and sixty-three hundredths percent (5.63%) of the hospital net operating revenues as determined from information reported on the hospital’s 1994 base cost report.

4. (5) Federal Reimbursement Allowance (FRA) for State Fiscal Year 1998.

   1. (A) The FRA assessment for State Fiscal Year 1998 shall be determined at the rate of five and forty-six hundredths percent (5.46%) of the hospital’s net operating revenue as determined from information reported in the hospital’s 1995 base year cost report.
5. (6) Federal Reimbursement Allowance (FRA) for State Fiscal Year 1999. The FRA assessment for State Fiscal Year 1999 shall be determined at the rate of five and thirty hundredths percent (5.30%) of the hospital’s net operating revenues and other operating revenues defined in paragraphs (1)(A)12. and 13., as determined from information reported in the hospital’s 1995 base year cost report. The State Fiscal Year 1999 assessment rate of five and thirty hundredths percent (5.30%) shall continue as an estimate of the FRA assessment percentage until such time as the State Fiscal Year 2000 assessment rate is established.
6. (7) Federal Reimbursement Allowance (FRA) for State Fiscal Year 2000. The FRA assessment for State Fiscal Year 2000 shall be determined at the rate of five and two hundredths percent (5.02%) of the hospital’s net operating revenues and other operating revenues defined in paragraphs (1)(A)12., and 13., as determined from information reported in the hospital’s 1996 base year cost report.
7. (8) Federal Reimbursement Allowance (FRA) for State Fiscal Year 2001. The FRA assessment for State Fiscal Year 2001 shall be determined at the rate of five and fifty hundredths percent (5.50%) of the hospital’s net operating revenues and other operating revenues defined in paragraphs (1)(A)12., and 13., as determined from information reported in the hospital’s 1997 base year cost report. The State Fiscal Year (SFY) 2001 FRA Assessment shall be used as an estimate of the SFY 2002 FRA Assessment until such time as the regulation establishing the SFY 2002 FRA Assessment is effective.
8. (9) Federal Reimbursement Allowance (FRA) for State Fiscal Year 2002. The FRA assessment for State Fiscal Year (SFY) 2002 shall be determined at the rate of five and zero hundredths percent (5.00%) of the hospital’s total operating revenue less tax revenue/other government appropriations plus non-operating gains and losses as published by the Missouri Department of Health, State Center for Health Statistics in the Missouri Hospital Revenues 1995–2000 manual, which is incorporated by reference in this rule. The base financial data for 1998 will be annualized, if necessary, and will be adjusted by the trend factor listed in 13 CSR 70-15.010(3)(B) to determine revenues for the current state fiscal year. The financial data that is submitted by the hospitals to the Missouri Department of Health and Senior Services is required as part of 19 CSR 10-33.030 Reporting Financial Data by Hospitals. If the pertinent information is not available through the Department of Health and Senior Services, hospital database, the Division of Medical Services will use the Medicaid data similarly defined from the Medicaid cost report that is required to be submitted pursuant to 13 CSR 70- 15.010(5)(A).
9. (10) Federal Reimbursement Allowance
10. (FRA) for State Fiscal Year 2003. The FRA assessment for State Fiscal Year (SFY) 2003 shall be determined at the rate of five and seventy hundredths percent (5.70%) of the hospital’s total operating revenue less tax revenue/other government appropriations plus non-operating gains and losses as published by the Missouri Department of Health and Senior Services, Section of Health Statistics. The base financial data for 1999 will be annualized, if necessary, and will be adjusted by the trend factor listed in 13 CSR 70- 15.010(3)(B) to determine revenues for the current state fiscal year. The financial data that is submitted by the hospitals to the Missouri Department of Health and Senior Services is required as part of 19 CSR 10- 33.030 Reporting Financial Data by Hospitals. If the pertinent information is not available through the Department of Health and Senior Services’ hospital database, the Division of Medical Services will use the Medicaid data similarly defined from the Medicaid cost report that is required to be submitted pursuant to 13 CSR 70- 15.010(5)(A).
11. (11) Federal Reimbursement Allowance
12. (FRA) for State Fiscal Year 2004. The FRA assessment for State Fiscal Year (SFY) 2004 shall be determined at the rate of five and thirty-two hundredths percent (5.32%) of the hospital’s total operating revenue less tax revenue/other government appropriations plus non-operating gains and losses as published by the Missouri Department of Health and Senior Services, Section of Health Statistics. The base financial data for 2000 will be annualized, if necessary, and will be adjusted by the trend factor listed in 13 CSR 70- 15.010(3)(B) to determine revenues for the current state fiscal year. The financial data that is submitted by the hospitals to the Missouri Department of Health and Senior Services is required as part of 19 CSR 10- 33.030 Reporting Financial Data by Hospitals. If the pertinent information is not available through the Department of Health and Senior Services’ hospital database, the Division of Medical Services will use the Medicaid data similarly defined from the Medicaid cost report that is required to be submitted pursuant to 13 CSR 70-15.010 (5)(A).
13. (12) Federal Reimbursement Allowance
14. (FRA) for State Fiscal Year 2005. The FRA assessment for State Fiscal Year (SFY) 2005 shall be determined at the rate of five and fifty-three hundredths percent (5.53%) of the hospital’s total operating revenue less tax revenue/other government appropriations plus nonoperating gains and losses as published by the Missouri Department of Health and Senior Services, Section of Health Statistics. The base financial data for 2001 will be annualized, if necessary, and will be adjusted by the trend factor listed in 13 CSR 70- 15.010(3)(B) to determine revenues for the current state fiscal year. The financial data that is submitted by the hospitals to the Missouri Department of Health and Senior Services is required as part of 19 CSR 10- 33.030 Reporting Financial Data by Hospitals. If the pertinent information is not available through the Department of Health and Senior Services’ hospital database, the Division of Medical Services will use the Medicaid data similarly defined from the Medicaid cost report that is required to be submitted pursuant to 13 CSR 70- 15.010(5)(A).
15. (13) Federal Reimbursement Allowance
16. (FRA) for State Fiscal Year 2006. The FRA assessment for State Fiscal Year (SFY) 2006 shall be determined at the rate of five and ninety-seven hundredths percent (5.97%) of the hospital’s total operating revenue less tax revenue/other government appropriations plus non-operating gains and losses as published by the Missouri Department of Health and Senior Services, Section of Health Statistics. The base financial data for 2002 will be annualized, if necessary, and will be adjusted by the trend factor listed in 13 CSR 70-15.010(3)(B) to determine revenues for the current state fiscal year. The financial data that is submitted by the hospitals to the Missouri Department of Health and Senior Services is required as part of 19 CSR 10- 33.030 Reporting Financial Data by Hospitals. If the pertinent information is not available through the Department of Health and Senior Services’ hospital database, the Division of Medical Services will use the Medicaid data similarly defined from the Medicaid cost report that is required to be submitted pursuant to 13 CSR 70- 15.010(5)(A).
17. (14) Federal Reimbursement Allowance
18. (FRA) for State Fiscal Year (SFY) 2007. The FRA assessment for SFY 2007 shall be determined at the rate of five and eighty-three hundredths percent (5.83%) of the hospital’s total operating revenue less tax revenue/other government appropriations plus non-operating gains and losses as published by the Missouri Department of Health and Senior Services, Section of Health Statistics. The base financial data for 2003 will be annualized, if necessary, and will be adjusted by the trend factor listed in 13 CSR 70-15.010(3)(B) to determine revenues for the current state fiscal year. The financial data that is submitted by the hospitals to the Missouri Department of Health and Senior Services is required as part of 19 CSR 10-33.030 Reporting Financial Data by Hospitals. If the pertinent information is not available through the Department of Health and Senior Services’ hospital database, the Division of Medical Services will use the Medicaid data similarly defined from the Medicaid cost report that is required to be submitted pursuant to 13 CSR 70-15.010(5)(A).
19. (15) Federal Reimbursement Allowance
20. (FRA) for State Fiscal Year (SFY) 2008. The FRA assessment for SFY 2008 shall be determined at the rate of five and ninety-nine hundredths percent (5.99%) for July 1 through December 31, 2007, and five and forty-nine hundredths percent (5.49%) for January 1 through June 30, 2008, of the hospital’s total operating revenue less tax revenue/other government appropriations plus non-operating gains and losses as published by the Missouri Department of Health and Senior Services, Section of Health Statistics. The base financial data for 2004 will be annualized, if necessary, and will be adjusted by the trend factor listed in 13 CSR 70- 15.010(3)(B) to determine revenues for the current state fiscal year. The financial data that is submitted by the hospitals to the Missouri Department of Health and Senior Services is required as part of 19 CSR 10- 33.030 Reporting Financial Data by Hospitals. If the pertinent information is not available through the Department of Health and Senior Services’ hospital database, the Division of Medical Services will use the Medicaid data similarly defined from the Medicaid cost report that is required to be submitted pursuant to 13 CSR 70- 15.010(5)(A). AUTHORITY: sections 208.201, 208.453 and 208.455, RSMo 2000.* Emergency rule filed Sept. 21, 1992, effective Oct. 1, 1992, expired Jan. 28, 1993. Emergency rule filed Jan. 15, 1993, effective Jan. 25, 1993, expired May 24, 1993. Original rule filed Sept. 21, 1992, effective June 7, 1993. Emergency amendment filed Sept. 2, 1993, effective Sept. 18, 1993, expired Jan. 15, 1994. Amended: Filed Oct. 15, 1993, effective June 6, 1994. Emergency amendment filed Sept. 23, 1994, effective Oct. 3, 1994, expired Feb. 1, 1995. Emergency amendment 13 CSR 70-15

filed Jan. 20, 1995, effective Jan. 31, 1995, expired May 30, 1995. Emergency amendment filed Feb. 9, 1995, effective Feb. 20, 1995, expired June 19, 1995. Amended: Filed Feb. 9, 1995, effective Aug. 30, 1995. Emergency amendment filed June 20, 1995, effective July 1, 1995, expired Oct. 28, 1995. Emergency amendment filed July 31, 1995, effective Aug. 10, 1995, expired Dec. 7, 1995. Amended: Filed May 19, 1995, effective Dec. 30, 1995. Emergency amendment filed Nov. 27, 1995, effective Dec. 8, 1995, expired June 4, 1996. Amended: Filed Nov. 27, 1995, effective June 30, 1996. Emergency amendment filed June 21, 1996, effective July 1, 1996, expired Dec. 27, 1996. Amended: Filed April 15, 1996, effective Nov. 30, 1996. Emergency amendment filed June 21, 1996, effective July 1, 1996, expired Dec. 31, 1996. Emergency amendment filed Sept. 13, 1996, effective Oct. 1, 1996, expired March 29, 1997. Amended: Filed Sept. 13, 1996, effective April 30, 1997. Emergency amendment filed June 3, 1997, effective July 1, 1997, expired Dec. 27, 1997. Amended: Filed June 3, 1997, effective Dec. 30, 1997. Emergency amendment filed March 2, 1998, effective April 1, 1998, expired Sept. 28, 1998. Amended: Filed March 2, 1998, effective Sept. 30, 1998. Emergency amendment filed Aug. 31, 1998, effective Sept. 10, 1998, expired March 8, 1999. Amended: Filed Jan. 14, 1999, effective July 30, 1999. Emergency amendment filed March 29, 1999, effective April 8, 1999, expired Oct. 4, 1999. Amended: Filed Aug. 16, 1999, effective March 30, 2000. Amended: Filed March 3, 2000, effective Oct. 30, 2000. Emergency amendment filed June 8, 2001, effective June 18, 2001, expired Dec. 8, 2001. Amended: Filed June 8, 2001, effective Nov. 30, 2001. Amended: Filed Sept. 11, 2001, effective March 30, 2002. Emergency amendment filed May 28, 2002, effective June 6, 2002, expired Dec. 2, 2002. Amended: Filed April 29, 2002, effective Nov. 30, 2002. Emergency amendment filed April 29, 2003, effective May 9, 2003, terminated Sept. 18, 2003. Amended: Filed April 29, 2003, effective Nov. 30, 2003. Emergency amendment filed Sept. 8, 2003, effective Sept. 18, 2003, expired March 15, 2004. Amended: Filed Sept. 8, 2003, effective March 30, 2004. Emergency amendment filed June 7, 2004, effective June 17, 2004, expired Dec. 13, 2004. Amended: Filed June 7, 2004, effective Dec. 30, 2004. Emergency amendment filed Sept. 10, 2004, effective Sept. 20, 2004, expired March 18, 2005. Amended: Filed Sept. 27, 2004, effective March 30, 2005. Emergency amendment filed June 7, 2005, effective June 17, 2005, expired Dec. 13, 2005. Amended: Filed June 15, 2005, effective Dec. 30, 2005. Emergency amendment filed May 10, 2006, effective May 20, 2006, expired Nov. 15, 2006. Emergency amendment filed June 15, 2006, effective July 1, 2006, expired Dec. 28, 2006. Amended: filed May 10, 2006, effective Nov. 30, 2006. Emergency amendment filed June 20, 2007, effective July 1, 2007, expired Dec. 27, 2007. Amended: Filed June 20, 2007, effective Jan. 30, 2008.

*Original authority: 208.201, RSMo 1987; 208.453, RSMo 1992, amended 1994; and 208.455, RSMo 1992, amended 1993, 1994, 1995.