PURPOSE: This rule establishes a prospective outpatient reimbursement methodology for hospitals in place of the current retrospective reimbursement methodology. This rule establishes the methodology for setting a hospital’s prospective outpatient payment percentage for hospital services effective July 1, 2002.

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) Prospective Outpatient Hospital Services Reimbursement Percentage for Hospitals Located Within Missouri.

   1. (A) Outpatient hospital services shall be reimbursed on a prospective outpatient payment percentage effective July 1, 2002 except for services identified in subsection (1)(C). The prospective outpatient payment percentage will be calculated using the Medicaid over-all outpatient cost-to-charge ratio from the fourth, fifth, and sixth prior base year cost reports regressed to the current State Fiscal Year (SFY). (If the current SFY is 2003 the fourth, fifth and sixth prior year cost reports would be the cost report filed in calendar year 1997, 1998 and 1999.) The prospective outpatient payment percentage shall not exceed one hundred percent (100%) and shall not be less than twenty percent (20%).
   2. (B) Outpatient cost-to-charge ratios will be as determined in the desk review of the base year cost reports.

   3. (C) Outpatient Hospital Services Reimbursement Limited by Rule.

      1. 1. Effective for dates of service

September 1, 1985, and annually updated, certain clinical diagnostic laboratory procedures will be reimbursed from a Medicaid fee schedule which shall not exceed a national fee limitation.

1. 2. Services of hospital-based physicians

and certified registered nurse anesthetists shall be billed on an HCFA-1500 professional claim form which is incorporated by reference as part of this rule, and reimbursed from a Medicaid fee schedule or the billed charge, if less.

1. 3. Outpatient hospital services provided

for those recipients having available Medicare benefits shall be reimbursed by Medicaid to the extent of the deductible and coinsurance as imposed under Title XVIII.

1. (2) Exempt Hospitals. Exempt Hospital Outpatient payment percent will be set as follows and will include:

   1. (A) New Medicaid providers which do not have a fourth, fifth and sixth prior year cost report.

      1. 1. Interim payment percentage. An

interim outpatient payment percentage for new Medicaid hospital providers will be set at seventy-five percent (75%) for the first three (3) state fiscal years in which the hospital operates. The cost reports for these three (3) years will have a cost settlement calculated in accordance with 13 CSR 70-15.040.

1. 2. Outpatient percentage. The outpatient

payment percentage for the fourth and fifth year in which the hospital operates will be 13 CSR 70-15

based on the overall Medicaid cost-to-charge ratio from its fourth prior year cost report.

1. (B) Hospitals who qualify as nominal charge providers under 42 CFR 413.13(f) or meet the definition of nominal charge provider in subsection (4)(D) shall be reimbursed on an interim basis by Medicaid at the lesser of seventy-five percent (75%) of usual and customary charges as billed by the provider for covered services or one hundred percent (100%) of the facility’s Medicaidallowable outpatient cost-to-charge ratio as determined from the most recent deskreviewed cost report. Reimbursement at the applicable percentage shall be effective July 1 of each SFY for all providers.

2. (C) A hospital which had a change-in-ownership or merged its operation with another hospital between January 1, 1997 and June 30, 2002, and does not have a 1997 cost report filed by new owner, shall have the option to delay its entry into prospective outpatient payment methodology or enter the prospective outpatient payment methodology identified in subsection (1)(A) of this regulation. The hospital must notify the division of its decision by March 3, 2003. A hospital which chooses to delay its entry into the prospective outpatient payment methodology will receive an outpatient payment percentage starting July 1, 2002 and may have final settlements calculated in accordance with paragraphs (2)(C)1., and 2. The transfer to the prospective outpatient payment percentage will occur as follows:

   1. 1. A hospital which does not have a

fourth prior year cost report (for SFY 2003 cost report would be 1999) filed by new owner will have its retrospective outpatient payment percentage based on the overall outpatient cost-to-charge ratio from the most current desk-reviewed cost report, either prior or current owner. All cost reports for prior and current owner ending in the SFY prior to the year the new owner receives a prospective outpatient payment percentage in accordance with paragraph (2)(C)2., will have a final settlement calculated in accordance with 13 CSR 70-15.040; and

1. 2. A hospital which has a fourth prior

year cost report filed by current owner, will have its prospective outpatient payment percentage based on the overall outpatient cost-to-charge ratio from its fourth prior year cost report for the fourth and fifth SFY after the change-in-ownership or merger which occurred prior to July 1, 2002. For the sixth SFY the hospital’s rate will be established in accordance with subsection (1)(A) of this regulation. Chart for prospective rates for change in ownership or merger:

1. (D) A hospital that has failed to file one (1) of the cost reports used to determine their prospective outpatient payment percentage for the year, whether it be the fourth, fifth, or sixth prior year cost report, will have their prospective outpatient payment percentage based on the two (2) cost reports that are on file with the division plus the average of those two (2) cost reports to be used in place of the missing cost report. For example, if the division does not have on file a fourth prior year cost report but has the fifth and sixth prior year cost reports, an average of the fifth and sixth prior year cost reports would be used in place of the fourth prior year cost report. This average along with the fifth and sixth prior year cost reports would then be used to calculate the prospective outpatient payment percentage.

1. (3) Closed Facilities. Hospitals which closed after January 1, 1999 but before July 1, 2002 will have final settlements for cost reports ending during this time period calculated in accordance with 13 CSR 70-15.040.

2. (4) Definitions.

   1. (A) Base cost report. Desk-reviewed Medicare/Medicaid cost report. When a facility has more than one (1) cost report with periods ending in the fourth prior calendar year, the cost report covering a full twelve (12)-month period will be used. If none of the cost reports covers a full twelve (12) months, the cost report with the latest period will be used. 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.
   2. (B) Cost report. A cost report details, for purposes of both Medicare and Medicaid reimbursement, the cost of rendering covered services for the fiscal reporting period. The Medicare/Medicaid Uniform Cost Report contains the forms utilized in filing the cost report.

   3. (C) Effective date.

      1. 1. The plan effective date shall be July

1, 2002.

1. 2. New prospective outpatient payment

percentages will be effective July 1 of each SFY.

1. (D) Nominal charge provider. A nominal charge provider is determined from the fourth prior year desk reviewed cost report. The hospital must meet the following criteria:

   1. 1. An acute care hospital with an

unsponsored care ratio of at least sixty-five percent (65%) and is licensed for fifty (50) inpatient beds or more and has an occupancy rate of more than forty percent (40%). The unsponsored care ratio is determined as the sum of bad debts and charity care divided by total net revenue. The hospital must meet one (1) of the federally mandated Disproportionate Share qualifications; or

1. 2. The hospital is a public hospital oper-

ated by the Department of Mental Health primarily for the care and treatment of mental disorders.

AUTHORITY: sections 208.152, 208.153, 208.162 and 208.201, RSMo 2000 and 208.471, RSMo Supp. 2004.* Emergency rule filed June 20, 2002, effective July 1, 2002, expired Feb. 27, 2003. Original rule filed June 14, 2002, effective Jan. 30, 2003. Amended: Filed May 3, 2004, effective Oct. 30, 2004. Amended: Filed June 15, 2005, effective Dec. 30, 2005.

*Original authority: 208.152, RSMo 1967, amended 1969, 1971, 1972, 1973, 1975, 1977, 1978, 1978, 1981, 1986, 1988, 1990, 1992, 1993, 2004; 208.153, RSMo 1967, amended 1967, 1973, 1989, 1990, 1991; 208.201, RSMo 1987; and 208.471, RSMo 1992, amended 2001.