5101:3-2-53 Supplemental inpatient hospital payments for children's hospitals.

This rule sets forth the methodology used to determine the supplemental inpatient hospital payments to children’s hospitals required by Section 309.30.13 of Amended Substitute House Bill 119 of the 127th General Assembly.

(A) Definitions.

(1) “Childrens hospital”, for the purpose of this rule, means an Ohio hospital as defined in section 3702.51 of the Revised Code that is owned and operated by a private entity and is subject to prospective payment as described in rule 5101:3-2-07.1 of the Administrative Code.

(2) “Private hospital” means an Ohio hospital other than as defined in rules 5101:3-2-50 and 5101:3-2-51 of the Administrative Code.

(3) “Available inpatient payment gap” means the difference between what is estimated using the methodology described in paragraphs (C) and (D) of this rule that medicare would have paid for medicaid consumers and actual medicaid payments made in accordance with Chapter 5101:3-2 of the Administrative Code.

(4) “Total medicaid inpatient payments” for each hospital means the amount paid by the medicaid program for services rendered to eligible medicaid patients, excluding supplemental payments, as reported on the medicaid cost report, as specified in paragraph (B) of this rule.

(5) “Total medicaid inpatient discharges” means for each hospital the number of discharges from the facility for medicaid patients, as reported on the medicaid cost report, as specified in paragraph (B) of this rule.

(6) “Total medicaid inpatient charges” means for each hospital the charges for covered medicaid inpatient services rendered, as reported on the medicaid cost report, as specified in paragraph (B) of this rule.

(7) “Medicare inpatient payments for hospitals exempt from medicare diagnostic related groups (DRG) payments and medicare inpatient payments for subproviders” means the inpatient payment amount as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(8) “Medicare inpatient DRG payments” means the DRG payment amount as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(9) “Medicare inpatient outlier payments” means the outlier payment amount as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(10) “Medicare inpatient indirect medical education” means the indirect medical education adjustment amount as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(11) “Medicare inpatient disproportionate share payments” means the inpatient disproportionate share adjustment amount as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(12) “Medicare inpatient hospital capital payments means” the payment for inpatient program capital as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(13) “Medicare inpatient direct medical education” means the direct graduate medical education payment amount as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(14) “Medicare inpatient hospital payments – other” means the sum of net organ acquisition cost, cost of teaching physicians, routine service other pass through costs, and ancillary service other pass through costs, as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(15) “Total medicare inpatient charges” means the amount of inpatient charges for each hospital and subprovider, as reported on the medicare cost report, as specified in paragraph (B) of this rule.

(16) “Total medicaid days” means for each children’s hospital the number of days reported from the facility for medicaid fee-for-service patients, as reported on the medicaid cost report, as specified in paragraph (B) of this rule.

(17) “Program year” means the twelve-month period beginning on the first day of January and ending on the thirty-first day of December.

(18) “Medicaid inpatient cost-to-charge ratio” means the historic medicaid inpatient cost-to-charge ratio applicable to a hospital as described in paragraph (B)(2) of rule 5101:3-2-22 of the Administrative Code.

(B) Source data for calculations.

Unless otherwise specified, the calculations described in this rule will be based on cost reporting data described in rule 5101:3-2-23 of the Administrative Code that reflects the most recent completed interim settled medicaid cost report for all hospitals, and the medicare cost report for the corresponding cost reporting period.

(1) For each private hospital, calculate the total medicare inpatient payment by adding the amounts described in paragraphs (A)(7) to (A)(14) of this rule.

(2) For each private hospital, calculate the medicare payment- to- charge ratio by dividing the amount calculated in paragraph (C)(1) of this rule by the total medicare inpatient charges as described in paragraph (A)(15) of this rule.

(3) For each private hospital, calculate the total estimated medicare inpatient payment for medicaid inpatient discharges by multiplying the amount calculated in paragraph (C)(2) of this rule by the total medicaid inpatient charges as described in paragraph (A)(6) of this rule.

(4) For each private hospital, calculate the available inpatient payment gap by taking total estimated medicare inpatient payments for medicaid inpatient discharges as calculated in paragraph (C)(3) of this rule and subtracting actual total medicaid inpatient payments as described in paragraph (A)(4) of this rule.

(5) For all private hospitals, sum the amounts calculated in paragraph (C)(3) of this rule. This is the aggregate inpatient upper limit for all private hospitals.

(6) For all private hospitals, the sum of the amounts calculated in paragraph (C)(4) of this rule, is the aggregate inpatient upper limit payment gap for all private hospitals

(D) For each supplemental upper limit payment made after the effective date of this rule, the resulting supplemental upper payment limit calculated in paragraph (C) of this rule will be in effect from the first day of January through the thirty-first day of December for each supplemental upper limitpayment program year.

(E) Notwithstanding paragraph (C)(5) of rule 5101:3-2-07.9 of the Administrative Code and except as provided in paragraph (F) of this rule, the director of the Ohio department of job and family services (ODJFS) shall pay a children’s hospital that meets the criteria in paragraphs (E)(1) and (E)(2) of rule 5101:3-2-07.9 of the Administrative Code, for each cost outlier claim made in fiscal years 2008 and 2009, an amount that is the product of the hospital’s allowable charges and the hospital’s medicaid inpatient cost-to-charge ratio. These payments shall be made as supplemental inpatient outlier payments as follows:

(1) In July of each year after the effective date of the medicaid state plan amendment implementing this payment program, the director shall calculate for each eligible children’s hospital the difference between the total amount the director would have paid according to the methodology in paragraph (E) of this rule for such claims for services incurred during the prior state fiscal year using the same cost-to-charge ratio as the ratio used to calculate cost outlier payments in accordance with rule 5101:3-2-07.9 of the Administrative Code for services incurred during that time period and the total amount the director paid according to the methodology in paragraph (A)(6) or (C)(5) of rule 5101:3-2-07.9 of the Administrative Code, as the applicable paragraph existed on June 30, 2007, for such claims as reflected in actual medicaid inpatient claims paid through the department’s medicaid management information system (MMIS) in the prior state fiscal year.

(2) If the sum of the amounts calculated in paragraph (E)(1) of this rule for all eligible children’s hospitals is less than or equal to the available amount for each fiscal year as provided in Section 309.30.13 of Amended Substitute House Bill 119 of the 127th General Assembly, then the supplemental inpatient outlier payment for each children’s hospital shall be the amount calculated in paragraph (E)(1) of this rule. Otherwise, the supplemental inpatient outlier payment for each children’s hospital shall be the amount calculated in paragraph (F) of this rule.

(F) The director shall cease paying a children’s hospital for a cost outlier claim under the methodology in paragraph (E) of this rule and revert to paying the hospital for such a claim according to methodology in paragraph (A)(6) or (C)(5) of rule 5101:3-2-07.9 of the Administrative Code, as applicable, when the difference between the total amount the director would pay according to the methodology in paragraph (E) of this rule for such claims and the total amount the director paid according to the methodology in paragraph (A)(6) or (C)(5) of rule 5101:3-2-07.9 of the Administrative Code, as the applicable paragraph existed on June 30, 2007, for such claims, exceeds the available amount for each fiscal year as provided in Section 309.30.13 of Amended Substitute House Bill 119 of the 127th General Assembly. If the sum of the amounts calculated in paragraph (E)(1) of this rule for all eligible children’s hospitals is greater than the available amount for each fiscal year as provided in Section 309.30.13 of Amended Substitute House Bill 119 of the 127th General Assembly, then the supplemental inpatient outlier payment for each children’s hospital shall be the amount calculated as follows:

(1) For each eligible children’s hospital, the director shall calculate the ratio equal to the amount described in paragraph (E)(1) of this rule divided by the sum of the amount described in paragraph (E)(1) of this rule for all children’s hospitals. For children’s hospitals that did not have an outlier claim paid in that period, this figure shall be zero.

(2) The supplemental inpatient outlier payment for each children’s hospital shall be the product of the ratio described in paragraph (F)(1) of this rule multiplied by the available amount for each fiscal year as provided in Section 309.30.13 of Amended Substitute House Bill 119 of the 127th General Assembly.

(G) If the total funds that would be paid to all children’s hospitals under paragraph (E) or

(F) of this rule exceeds the aggregate inpatient upper limit payment gap for all private hospitals as described in paragraphs (C) and (D) of this rule, then the amount paid to each children’s hospital will be the product of the ratio of the amount described in paragraph (F)(1) of this rule multiplied times the aggregate inpatient upper limit payment gap for all private hospitals as described in paragraphs (C) and (D) of this rule.

(H) The director shall make supplemental inpatient hospital upper limit payments to children’s hospitals if the difference between the total amount the director has paid according to the methodology in paragraph (E) of this rule for cost outlier claims and the total amount the director would have paid according to the methodology in paragraph (A)(6) or (C)(5) of rule 5101:3-2-07.9 of the Administrative Code for such claims, as the applicable paragraph existed on June 30, 2007, does not require the expenditure of the available amount for each fiscal year as provided in Section 309.30.13 of Amended Substitute House Bill 119 of the 127th General Assembly. If the supplemental outlier payments specified in paragraph (E) of this rule do not require the expenditure of the available amount for each fiscal year as provided in Section 309.30.13 of Amended Substitute House Bill 119 of the 127th General Assembly, and are less than the aggregate inpatient upper limit payment gap for all private hospitals as calculated for each supplemental payment program year as described in paragraphs (C) and (D) of this rule then supplemental inpatient hospital upper limit payments to children’s hospitals shall be made as follows:

(1) In July of each year after the effective date of the medicaid state plan amendment implementing this payment program, the department will calculate for each eligible children’s hospital a supplemental inpatient hospital payment amount by multiplying the ratio of each children’s hospitals’ total medicaid fee-for-service days derived from actual medicaid inpatient discharges paid for through the department’s medicaid management information system (MMIS) in the state fiscal year prior to the month of payment, to the total medicaid fee-for-service days from all children’s hospitals derived from actual inpatient discharges paid for through the department’s MMIS in the state fiscal year prior to the month of payment, by the difference between the available amount for each fiscal year as provided in Section 309.30.13 of Amended Substitute House Bill 119 of the 127th General Assembly minus the supplemental payments made pursuant to paragraph (E) of this rule, subject to the limitation described in paragraph (H)(2) of this rule.

(2) If the total funds that would be paid to all children’s hospitals under paragraph (H)(1) exceeds the aggregate upper payment limit gap for all private hospitals as calculated for each supplemental inpatient upper limit payment program year as described in paragraphs (C) and (D) of this rule, then the amount paid to each children’s hospital will be limited to its proportion, as determined by the ratios described in paragraph (H)(1) of this rule, of the difference between the aggregate upper payment limit gap minus the supplemental payments made pursuant to paragraph (E) of this rule.

(I) All medicaid payments including payments made under this rule are subject to the limitations described in rule 5101:3-2-24 of the Administrative Code.

(J) The total funds that will be paid to each children’s hospital will be included in the calculation of disproportionate share limits as described in rule 5101:3-2-07.5 of the Administrative Code.

Effective: 04/18/2008

R.C. 119.032 review dates: 11/01/2010

Promulgated Under: 119.03

Statutory Authority: 5111.02

Rule Amplifies: 5111.01, 5111.02, Section 309.30.13 of Am. Sub. H.B. 119 of the 127th General Assembly

Prior Effective Dates: 11/24/2005