PURPOSE: This rule establishes the payment methodology for outpatient hospital services.

PUBLISHER’S NOTE: The secretary of state has determined that publication of the entire text of the material that is incorporated by reference as a portion of this rule would be unduly cumbersome or expensive. This material as incorporated by reference in this rule shall be maintained by the agency at its headquarters and shall be made available to the public for inspection and copying at no more than the actual cost of reproduction. This note applies only to the reference material. The entire text of the rule is printed here.

1. (1) Outpatient Simplified Fee Schedule (OSFS) Payment Methodology.

   1. (A) Definitions. The following definitions will be used in administering section (1) of this rule:

      1. 1. Ambulatory Payment Classification (APC). Medicare’s

ambulatory payment classification assignment groups of Current Procedural Terminology (CPT) or Healthcare Common Procedures Coding System (HCPCS) codes. APCs classify and group clinically similar outpatient hospital services that can be expected to consume similar amounts of hospital resources. All services within an APC group have the same relative weight used to calculate the payment rates;

1. 2. APC conversion factor. The unadjusted national

conversion factor calculated by Medicare effective January 1 of each year, as published with the Medicare Outpatient Prospective Payment System (OPPS) Final Rule, and used to convert the APC relative weights into a dollar payment. The Medicare OPPS Final Rule is incorporated by reference and made a part of this rule as published by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, and available at https://www.govinfo. gov/content/pkg/FR-2022-11-23/pdf/2022-23918.pdf, November 23, 2022. This rule does not incorporate any subsequent amendments or additions;

1. 3. APC relative weight. The national relative weights

calculated by Medicare for the Outpatient Prospective Payment System;

1. 4. Current Procedural Terminology (CPT). A medical code

set that is used to report medical, surgical, and diagnostic procedures and services to entities such as physicians, health insurance companies, and accreditation organizations;

1. 5. Dental procedure codes. The procedure codes found

in the Code on Dental Procedures and Nomenclature (CDT), a national uniform coding method for dental procedures maintained by the American Dental Association;

1. 6. Federally Deemed Critical Access Hospital. Hospitals

that meet the federal definition found in section 1820(c)(2)(B) of the Social Security Act;

1. 7. HCPCS. The national uniform coding method maintained

by the Centers for Medicare & Medicaid Services (CMS) that incorporates the American Medical Association (AMA) Physicians CPT and the three (3) HCPCS unique coding levels, I, II, and III;

1. 8. Medicare Inpatient Prospective Payment System

(IPPS) wage index. The wage area index values are calculated annually by Medicare, published as part of the Medicare IPPS Final Rule;

1. 9. Missouri conversion factor. The single, statewide

conversion factor used by the MO HealthNet Division (MHD) to determine the APC-based fees, uses a formula based on Medicare OPPS. The formula consists of sixty percent (60%) of the APC conversion factor, as defined in paragraph (1)(A)2. multiplied by the St. Louis, MO, Medicare IPPS wage index value, plus the remaining forty percent (40%) of the APC conversion factor, with no wage index adjustment;

1. 10. Nominal charge provider. A nominal charge provider

is determined from the third prior year audited Medicaid cost report. The hospital must meet the following criteria:

1. A. A public non-state governmental acute care hospital

with a low-income utilization rate (LIUR) of at least forty percent (40%) and a Medicaid inpatient utilization rate (MIUR) greater than one (1) standard deviation from the mean, and is licensed for fifty (50) inpatient beds or more and has an occupancy rate of at least forty percent (40%). The hospital must meet one (1) of the federally mandated Disproportionate Share qualifications; or

1. B. The hospital is a public hospital operated by the

Department of Mental Health primarily for the care and treatment of mental disorders; and

1. C. A hospital physically located in the state of Missouri;
2. 11. Outpatient Prospective Payment System (OPPS).

Medicare’s hospital outpatient prospective payment system mandated by the Balanced Budget Refinement Act of 1999 (BBRA) and the Medicare, Medicaid, and State Children’s Health Insurance Program (SCHIP) Benefits Improvement and Protection Act of 2000 (BIPA); and

1. 12. Payment level adjustment. The percentage applied to

the Medicare fee to derive the OSFS fee.

1. (B) Effective for dates of service beginning July 20, 2021, outpatient hospital services shall be reimbursed on a predetermined fee-for-service basis using an OSFS based on the APC groups and fees under the Medicare Hospital OPPS. When service coverage and payment policy differences exist between Medicare OPPS and Medicaid, MHD policies and fee schedules are used. The fee schedule will be updated as follows:

   1. 1. MHD will review and adjust the OSFS annually on July 1

based on the payment method described in subsection (1)(D); and

1. 2. The OSFS is incorporated by reference and made a part

of this rule as published by the Department of Social Services, MO HealthNet Division, 615 Howerton Court, Jefferson City, MO 65109, at its website at https://dss.mo.gov/mhd/providers/pages/ cptagree.htm, July 13, 2023. This rule does not incorporate any subsequent amendments or additions.

1. (C) Payment will be the lower of the provider’s charge or the payment as calculated in subsection (1)(D).

2. (D) Fee schedule methodology. Fees for outpatient hospital services covered by the MO HealthNet program are determined by the HCPCS procedure code at the line level and the following hierarchy:

   1. 1. The APC relative weight or payment rate assigned to

the procedure in the Medicare OPPS Addendum B is used to calculate the fee for the service, with the exception of the hospital observation per hour fee which is calculated based on the method described in subparagraph (1)(D)1.B. Fees derived from APC weights and payment rates are established using the Medicare OPPS Addendum B effective as of January 1 of each year as published by the CMS for Medicare OPPS. The Medicare OPPS Addendum B is incorporated by reference and made a part of this rule as published by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, and available at https://www.cms.gov/medicare/ medicare-fee-ser vice-payment/hospitaloutpatientpps/ addendum-and-addendum-b-updates/january-2023, January 20, 2023. This rule does not incorporate any subsequent amendments or additions.

1. A. The fee is calculated using the APC relative weight

times the Missouri conversion factor. The resulting amount is then multiplied by the payment level adjustment of ninety percent (90%) to derive the OSFS fee.

1. B. The hourly fee for observation is calculated based on

the relative weight for the Medicare APC (using the Medicare OPPS Addendum A effective as of January 1 of each year as published by the CMS for Medicare OPPS), which corresponds with comprehensive observation services multiplied by the Missouri conversion factor divided by forty (40), the maximum payable hours by Medicare. The resulting amount is then multiplied by the payment level adjustment of ninety percent (90%) to derive the OSFS fee. The Medicare OPPS Addendum A is incorporated by reference and made a part of this rule as published by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, and available at https://www.cms.gov/medicare/medicare-fee-service-payment/ hospitaloutpatientpps/addendum-and-addendum-b-updates/ january-2023-0, January 20, 2023. This rule does not incorporate any subsequent amendments or additions.

1. C. For those APCs with no assigned relative weight,

ninety percent (90%) of the Medicare APC payment rate is used as the fee;

1. 2. If there is no APC relative weight or APC payment rate

established for a particular service in the Medicare OPPS Addendum B, then the MHD approved fee will be ninety percent (90%) of the rate listed on other Medicare fee schedules, effective as of January 1 of each year: Clinical Laboratory Fee Schedule; Physician Fee Schedule; and Durable Medical Equipment Prosthetics/Orthotics and Supplies Fee Schedule, applicable to the outpatient hospital service.

1. A. The Medicare Clinical Laboratory Fee Schedule is

incorporated by reference and made a part of this rule as published by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, and available at https://www.cms.gov/medicare/medicare-fee-servicepayment/clinicallabfeesched/clinical-laboratory-fee-schedulefiles/23clabq1, January 12, 2023. This rule does not incorporate any subsequent amendments or additions.

1. B. The Medicare Physician Fee Schedule is incorporated by

reference and made a part of this rule as published by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, and available at https://www.cms.gov/ medicaremedicare-fee-service-paymentphysicianfeeschedpfscarrier-specific-files/all-states-2, January 5, 2023. This rule does not incorporate any subsequent amendments or additions.

1. C. The Medicare Durable Medical Equipment Prosthetics/

Orthotics and Supplies Fee Schedule is incorporated by reference and made a part of this rule as published by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, and available at ht tps://w w w.cms.gov/medic aremedic are -fee -ser vice - paymentdmeposfeescheddmepos-fee-schedule/dme23, December 19, 2022. This rule does not incorporate any subsequent amendments or additions;

1. 3. Fees for dental procedure codes in the outpatient

hospital setting are calculated based on thirty-eight and one half percent (38.5%) of the fiftieth percentile fee for Missouri reflected in the 2023 National Dental Advisory Service (NDAS). The 2023 NDAS is incorporated by reference and made a part of this rule as published by Wasserman Medical & Dental at its website at https://wasserman-medical.com/product-category/ dental/ndas/, January 10, 2023. This rule does not incorporate any subsequent amendments or additions;

1. 4. If there is no APC relative weight, APC payment rate,

other Medicare fee schedule rate, or NDAS rate established for a covered outpatient hospital service, then a MO HealthNet fee will be determined using the MHD Dental, Medical, Other Medical or Independent Lab—Technical Component fee schedules.

1. A. The MHD Dental Fee Schedule is incorporated by

reference and made a part of this rule as published by the Department of Social Services, MO HealthNet Division, 615 Howerton Court, Jefferson City, MO 65109, and available at https://dss.mo.gov/mhd/providers/pages/cptagree.htm, March 8, 2023. This rule does not incorporate any subsequent amendments or additions.

1. B. The MHD Medical Fee Schedule is incorporated by

reference and made a part of this rule as published by the Department of Social Services, MO HealthNet Division, 615 Howerton Court, Jefferson City, MO 65109, and available at https://dss.mo.gov/mhd/providers/pages/cptagree.htm, March 8, 2023. This rule does not incorporate any subsequent amendments or additions.

1. C. The MHD Other Medical Fee Schedule is incorporated

by reference and made a part of this rule as published by the Department of Social Services, MO HealthNet Division, 615 Howerton Court, Jefferson City, MO 65109, and available at https://dss.mo.gov/mhd/providers/pages/cptagree.htm, March 8, 2023. This rule does not incorporate any subsequent amendments or additions.

1. D. The MHD Independent Lab—Technical Component

Fee Schedule is incorporated by reference and made a part of this rule as published by the Department of Social Services, MO HealthNet Division, 615 Howerton Court, Jefferson City, MO 65109, and available at https://dss.mo.gov/mhd/providers/ pages/cptagree.htm, March 8, 2023. This rule does not incorporate any subsequent amendments or additions;

1. 5. In-state federally deemed critical access hospitals

will receive an additional forty percent (40%) of the rate as determined in paragraph(1)(B)2. for each billed procedure code; and

1. 6. Nominal charge providers will receive an additional

twenty-five percent (25%) of the rate as determined in paragraph (1)(B)2. for each billed procedure code.

1. (E) Packaged services. MHD adopts Medicare guidelines for procedure codes identified as “Items and Services Packaged into APC Rates” under Medicare OPPS Addendum D1. These procedures are designated as always packaged. Claim lines with packaged procedure codes will be considered paid but with a payment of zero (0). The Medicare OPPS Addendum D1 is incorporated by reference and made a part of this rule as published by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244, and available at https://www.cms.gov/license/ama?file=/files/zip/2023-nfrmopps-addenda.zip, November 22, 2022. This rule does not incorporate any subsequent amendments or additions.
2. (F) Inpatient only services. MHD adopts Medicare guidelines for procedure codes identified as “Inpatient Procedures” under Medicare OPPS Addendum D1. These procedures are designated as inpatient only (referred to as the inpatient only (IPO) list). Claim lines with inpatient only procedures will not be paid under the OSFS.
3. (G) Drugs. Effective for dates of service beginning April 1, 2019, outpatient drugs are reimbursed in accordance with the methodology described in 13 CSR 70-20.070.
4. (H) Payment for outpatient hospital services under this rule will be final, with no cost settlement.

AUTHORITY: sections 208.153, 208.201, and 660.017, RSMo 2016, and section 208.152, RSMo Supp. 2023.* 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. Emergency amendment filed Sept. 21, 2010, effective Oct. 1, 2010, expired March 29, 2011. Amended: Filed Sept. 30, 2010, effective March 30, 2011. Emergency amendment filed Sept. 20, 2011, effective Oct. 1, 2011, expired March 28, 2012. Amended: Filed July 1, 2011, effective Feb. 29, 2012. Emergency amendment filed June 20, 2012, effective July 1, 2012, expired Dec. 28, 2012. Amended: Filed June 20, 2012, effective Jan. 30, 2013. Amended: Filed July 1, 2013, effective Jan. 30, 2014. Amended: Filed May 1, 2018, effective Jan. 1, 2019. Amended: Filed Jan. 8, 2019, effective July 30, 2019. Amended: Filed April 21, 2021, effective Nov. 30, 2021. Emergency amendment filed June 13, 2022, effective July 1, 2022, expired Feb. 23, 2023. Amended: Filed June 13, 2022, effective Jan. 30, 2023. Emergency amendment filed June 15, 2023, effective June 30, 2023, expired Dec. 26, 2023. Amended: Filed July 13, 2023, effective Jan. 30, 2024. *Original authority: 208.152, RSMo 1967, amended 1969, 1971, 1972, 1973, 1975, 1977, 1978, 1981, 1986, 1988, 1990, 1992, 1993, 2004, 2005, 2007, 2011, 2013, 2014, 2015, 2016, 2018, 2021, 2023; 208.153, RSMo 1967, amended 1967, 1973, 1989, 1990, 1991, 2007, 2012; 208.201, RSMo 1987, amended 2007; and 660.017, RSMo 1993, amended 1995.