Chapter 5160-29 Outpatient Health Facility Services

5160-29-01 Eligible providers.

In order to be determined eligible as an "outpatient health facility" (OHF) under the medicaid program, a facility must be determined by ODJFS to be in compliance with the conditions and provisions set forth in this rule.

(A) An "eligible outpatient health facility" means a facility, other than an outpatient hospital facility, which:

(1) Provides comprehensive primary health services, as defined in paragraph (E) of this rule, by or under the direction of a physician at least five days per week on a forty-hour-per-week basis to outpatients; and

(2) Is operated by one of the following:

(a) The board of health of a city or general health district; or

(b) Another public agency; or

(c) A nonprofit private agency or organization under the direction and control of a governing board that has no health-related responsibilities other than the direction and control of one or more such outpatient health facilities.

(3) Receives at least seventy-five per cent of its operating funds from public sources. "Public sources" means the following:

(a) Federal funds;

(b) State funds;

(c) City funds; and

(d) County funds.

(4) Is not eligible to be enrolled as an federally qualified health center (FQHC) or rural health clinic (RHC) as specified in rules 5101:3-28-01 and 5101:3-16-01 of the Administrative Code.

(B) If an OHF has a current, valid provider number as either an FQHC or a RHC, the provider must bill for services under the FQHC or RHC provider number in accordance with the policies set forth in Chapter 5101:3-28 or 5101:3-16 of the Administrative Code. Medicaid providers may only be enrolled as one type of alternative payment clinic for a single enrollment period. An "alternative payment clinic" shall be defined as an OHF, FQHC, or rural health clinic.

(C) In addition to meeting the standards set forth for ambulatory health care centers under rule 5101:3-13-01 of the Administrative Code, an eligible outpatient health facility must also meet the requirements of division (C) of section 5111.04 of the Revised Code as follows:

(1) Has health and medical care policies developed with the advice of and subject to review by an advisory committee of professional personnel, including one or more physicians, one or more dentists if dental care is provided, and one or more registered nurses.

(2) Has a medical director, a dental director if dental care is provided, a nursing director, physicians, dentists, nursing, and ancillary staff appropriate to the scope of services provided.

(3) Requires that the care of every patient be under the supervision of a physician, provides for medical care in case of emergency, has in effect a written agreement with one or more hospitals and one or more other outpatient facilities, and has an established system for the referral of patients to other resources and a utilization review plan and program.

(4) Maintains clinical records on all patients.

(5) Provides nursing services and other therapeutic services in compliance with applicable laws and rules and under the supervision of a registered nurse, and has a registered nurse on duty at all times when the facility is in operation.

(6) Follows approved methods and procedures for the prescribing, dispensing, and administration of drugs and biologicals.

(7) Maintains the accounting and record-keeping system required under federal laws and regulations for the determination of reasonable and allowable costs. Requirements for accounting and record-keeping systems adequate to be reimbursed on a prospective cost-related basis are described in rule 5101:3-29-05 of the Administrative Code.

(D) Each site approved as an OHF will have an individual provider agreement and will have a unique provider number assigned by the Ohio department of job and family services with the exception of those outpatient health facilities which meet the provisions of paragraphs (D)(1) to (D)(3) of this rule. A "site" is defined as a service delivery location which independently meets all requirements set forth in this rule except for services provided to hospitalized or temporarily home-bound patients. Services provided at locations other than the approved site are not recognized as OHF services. If a legal entity operates more than one qualified site as defined in this paragraph, a single provider number may be assigned, at the legal entity's option, if all of the following requirements are met:

(1) Each participating site operated by the legal entity independently meets requirements for service provision as defined in paragraph (E) of this rule.

(2) The legal entity operating the sites assures that the requirements set forth in paragraphs (A) to (C)(7) of this rule are met for each participating site.

(3) The legal entity has a single, central, uniform accounting and record-keeping system applying to all participating sites.

(E) "Comprehensive primary health services" are those covered preventive, diagnostic, therapeutic, rehabilitative, or palliative items or services provided by or under the direction of a physician at least five days per week on a forty-hour-per-week basis that include all of the following:

(1) On-site provision of:

(a) Services of physicians, physician assistants, and advanced practice nurses;

(b) Covered preventive health services, such as children's eye and ear examinations, perinatal services, well-child services, and pregnancy prevention/contraceptive management in accordance with rule 5101:3-21-02 of the Administrative Code;

(c) Covered obstetrical care services, including a "prenatal risk assessment for every woman receiving prenatal services, and at-risk pregnancy services as described in Chapter 5101:3-4 of the Administrative Code for every woman diagnosed at risk of premature birth or poor pregnancy outcome;

(d) Diagnostic laboratory services including, at a minimum:

(i) Chemical examinations of urine by strip or tablet methods or both (including urine ketones);

(ii) Microscopic examinations of urine sediment.

(iii) Hemoglobin or hematocrit;

(iv) Blood sugar;

(v) Gram stain;

(vi) Examination of stool specimens for occult blood;

(vii) Pregnancy tests;

(viii) Primary culturing for transmittal to a certified laboratory;

(ix) Test for pinworm; and

(x) Drawing blood for a lead poisoning screening.

(e) Diagnostic radiological services including at a minimum:

(i) Chest X-ray; and

(ii) X-rays necessary to diagnose treatment of a broken foot, ankle, leg, arm, or hand.

(2) On-site provision of or arrangement for:

(a) Transportation services; and

(b) Emergency medical services.

Effective: 07/01/2009
R.C. 119.032 review dates: 04/14/2009 and 07/01/2014
Promulgated Under: 119.03
Statutory Authority: 5111.02
Rule Amplifies: 5111.01 , 5111.02 , 5111.021 , 5111.04
Prior Effective Dates: 11/10/83, 4/18/88, 11/1/01, 5/1/05

5160-29-03 Coverage and limitation policies for outpatient health facility services.

(A) General provisions

Paragraph (E) of rule 5101:3-29-01 of the Administrative Code identifies the minimal range of services an outpatient health facility must provide either directly or under arrangement in order to participate in the outpatient health facility program. In addition to these basic services, an outpatient health facility may provide other supplemental ambulatory services within the scope of the medicaid program except for institutional care. The following paragraphs identify the coverage and limitation policies applicable to items and services provided by an outpatient health facility as a basic or supplemental service.

(1) Medical services covered under this category include those services necessary for the diagnosis and/or treatment of an illness or injury rendered by an eligible provider of services within the scope of his practice and within the scope of the medicaid program. Preventative medicine as such is not a recognized service item under Ohio's medicaid program except for services covered under the specialized program known as early and periodic screening, diagnosis and treatment (EPSDT) also known as healthchek, for individuals under twenty-one years of age identified in Chapter 5101:3-14 of the Administrative Code, and at-risk pregnancy services for women who have been determined to be at risk of preterm birth or poor pregnancy outcome on JFS 03535 "Prenatal Risk Assessment" form identified in 5101:3-4-10 and 5101:3-4-11 of the Administrative Code. The following provisions are applicable to medical services provided by various practitioner groupings:

(a) "Physician services" are those covered services identified in Chapter 5101:3-4 of the Administrative Code provided by a licensed doctor of medicine or osteopathy and those covered services identified in Chapter 5101:3-7 of the Administrative Code furnished by a licensed doctor of podiatric medicine.

(b) "Physician's assistant and nurse practitioner services" are those covered services provided by a physician's's assistant who holds a certificate of registration accordance with Chapter 4730. of the Revised Code or nurse practitioner as defined in section 4723.43 of the Revised Code. Professional services of both physician's assistants and nurse practitioners are covered if:

(i) Furnished in accordance with rules 5101:3-8-21 to 5101:3-8-27 of the Administrative Code addressing nurse practitioner and advanced practice nurses services.

(ii) Furnished in accordance with rule 5101:3-4-03 of the Administrative Code which describes physician assistant services.

(iii) Furnished in accordance with the limitations placed on registered nurse or physician's assistant under applicable state law.

(c) "Registered nurse and licensed practical nurse services" are those covered services provided by a registered nurse or a licensed practical nurse as defined in Chapter 4723.of the Revised Code. Professional services of both registered nurses and licensed practical nurses are covered if:

(i) Furnished under the personal supervision of a physician and otherwise provided as incidental to a physician's service as defined in paragraph (A)(1)(a) of this rule; or

(ii) Furnished independently of a physician but under the general direction of a physician within the scope of state law governing registered nurses and licensed practical nurses. Services covered under this provision are limited to those that would otherwise be covered if furnished by an M.D. or D.O.

(reference Chapter 5101:3-4 of the Administrative Code) or if furnished by a D.P.M.

(reference Chapter 5101:3-7 of the Administrative Code).

(2) "Dental services" are those covered services identified in Chapter 5101:3-4 of the Administrative Code provided by a licensed dentist or a person under the personal supervision of a dentist. Prior authorization shall be obtained for any service subject to prior authorization.

(3) "Mental health services" are those covered services identified in rule 5101:3-8-05 of the Administrative Code which are provided by a clinical psychologist and those covered mental health services identified in rule 5101:3-4-29 of the Administrative Code provided by a clinical social worker, identified in rule 5101:3-16-01 of the Administrative Code. A licensed social worker may provide mental health services within the scope and limitations of rule 5101:3-4-29 of the Administrative Code. Prior authorization must be obtained for any service subject to prior authorization.

(4) "Vision care services" are those covered items and services identified in Chapter 5101:3-6 of the Administrative Code provided by a licensed optometrist or optician. Prior authorization shall be obtained for any service subject to prior authorization.

(5) "Speech and hearing services" are those covered services identified in Chapter 5101:3-13 of the Administrative Code provided by a licensed audiologist or speech pathologist.

(6) "Physical medicine services" are those covered services identified in rule 5101:3-4-26 of the Administrative Code provided by a physician, podiatrist, licensed physical therapist, or mechanotherapist. Services provided by nonlicensed personnel under the personal supervision of a licensed physical therapist or mechanotherapist are not covered.

(7) "Laboratory services" are those covered services identified in Chapter 5101:3-11 of the Administrative Code provided by the OHF. All laboratory services must be provided by a Clinical Laboratory Improvement Act (CLIA) certified laboratory as specified in Chapter 5101:3-11 of the Administrative Code.

(8) "Radiology services" are those covered services identified in rule 5101:3-4-25 of the Administrative Code provided by the OHF.

(9) "Transportation services" are those services needed to transport the patient to and from the OHF or to and from other medicaid providers with whom the OHF has referral arrangements. Such transportation services do not include ambulance or ambulette services as defined in Chapter 5101:3-15 of the Administrative Code.

(10) "Other services" are those covered services furnished as incident to and in conjunction with services identified in paragraphs (A)(1) to (A)(9) of this rule. Other services are considered part of the services provided as part of each encounter type such as medical, vision, or dental services. "Other services" would include drugs or supplies used during a visit to the OHF Durable medical equipment and orthotics and prosthetics as identified in Chapter 5101:3-10 of the Administrative Code and medical supplies that are given to a patient to use at home are to be billed and reimbursed as specified in paragraph (C) of rule 5101:3-29-04 of the Administrative Code.

(11) Abortion services are described in 5101:3-17-01 of the Administrative Code.

(12) Sterilization services are described in 5101:3-21-01 of the Administrative Code.

(B) Service limitations

(1) Medical-The maximum number of office visits is twenty-four per year Visits excluded from the twenty-four visit limitation are those listed in rule 5101:34-06 of the Administrative Code.

(2) Mental health -- The maximum number of therapeutic services is specified in rule 5101:3-8-05 of the Administrative Code. Diagnostic testing is limited to the number specified in rule 5101:3-8-05 of the Administrative Code.

(3) Speech and hearing-The maximum number of therapeutic services is the number specified for ambulatory clinics in Chapter 5101:3-13 of the Administrative Code.

(4) Vision care services-For each twelve-month period, only one vision examination is covered for patients age twenty or younger and age sixty and older. For each twenty-four-month period, only one vision examination is covered for patients age twenty-one or older, but younger than age sixty. Corrective eyewear (e.g. eyeglasses) are covered only when provided by the department's contracted vision laboratories.

(5) Physical medicine-Services are limited to those specified in rule 5101:3-8-02 of the Administrative Code.

(6) Dental services-Due to the complexity of dental services, limitations cannot be listed. Reference Chapter 5101:3-5 of the Administrative Code for limitations to dental services.

Eff 11-10-83; 4-18-88; 11-1-01; 5-1-05
Promulgated Under: 119.03
Statutory Authority: 5111.02
Rule Amplifies: 5111.01 , 5111.02 , 5111.04
R.C. 119.032 review dates: 11/17/2004 and 05/01/2010

5160-29-04 Billable services.

(A) Billable encounters, general provisions -- For purposes of the outpatient health facility program, an "encounter" is defined as a face-to-face contact between a patient and a health professional whose services are covered under the medicaid program. For a health service to be defined as an encounter, it must meet the definitions set forth in this paragraph and must be recorded in the patient's health record. Services must be billed on an encounter basis. The types of encounters are defined in paragraph (B) of this rule. When an encounter is billed, also provide a detailed code listing on subsequent lines of the claim which describes all services provided to the patient during that encounter.

(1) Multiple encounters with the same health professional that take place on the same day constitute a single billable encounter except for cases in which the patient, subsequent to the first encounter, suffers illness or injury requiring additional diagnosis and treatment.

(2) Multiple encounters with different health professionals that take place on the same day for the same illness or injury constitute a single billable encounter.

(3) To meet the encounter criterion, the professional must be acting independently and not assisting another professional. For example, a nurse assisting a physician during a physical examination by taking vital signs, taking a history, or drawing a blood sample is not credited with a separate encounter. A nurse who, utilizing standing orders or protocol, sees a patient to monitor physiological signs, provide medication renewal, etc., without the patient routinely seeing the physician at the same time, is credited with an encounter. The definitions of independent nursing encounters can be found in paragraph (B)(1)(c) of this rule.

(4) An encounter for the purpose of providing services such as drawing blood, collecting urine specimens, or providing a medical supply to the patient during the visit are not considered a medical encounter but are bundled into the appropriate encounter type. For example collecting a urine specimen would be bundled into a laboratory encounter.

(5) Billable encounters are limited to:

(a) Those which take place at the site approved for participation in the outpatient health facility program; or

(b) Those medical service encounters which take place in the hospital or the patient's home for the purpose of providing services to outpatient health facility (OHF) patients who are hospitalized or temporarily confined to their home.

(6) Encounters with individuals involved with another patient (e.g., conferences or consultations with a family member) are not billable unless such individual is independently eligible for medicaid and receives services for diagnosis and/or treatment of an illness or injury. An encounter, for example, with a family member to discuss the diagnosis and/or treatment of a child who is not present cannot be billed. A conference with family members which occurs in the course of diagnosis and/or treatment of the eligible child would be covered as a service incidental to the treatment rendered; i.e., one billable service provided to both the child and family members.

(7) The encounter criterion is not met nor is coverage available under medicaid for cost involved in the following circumstances:

(a) When a provider participates in a community meeting or group session which is not designed to provide health services to program users. Examples of such activities include orientation sessions for new patients, health presentations to community groups (high school classes, PTA, etc.), and information presentations about the program.

(b) When the only health service provided is part of a large scale effort such as a mass immunization program, screening program, or community-wide service program (for example, a health fair).

(B) Billable encounter definitions

(1) "Medical encounter" is an encounter between a medical provider and a patient for the purpose of diagnosis and/or treatment of an illness or injury, including surgery. Preventive medicine services are covered in accordance with rule 5101:3-4-34 of the Administrative Code. Included in this category are physician encounters, mid-level practitioner encounters, and independent nursing encounters. Pregnancy prevention/contraceptive management services, defined in accordance with rule 5101:3-21-02 of the Administrative Code, are included under the definition of medical encounter.

(a) "Physician encounter" is an encounter between a physician or podiatrist and a patient. For purposes of this program, encounters between an ophthalmologist or a psychiatrist and a patient are included in this category as medical encounters.

(b) "Mid-level practitioner encounter" is an encounter between a physician assistant or advanced practice nurse and a patient in which the mid-level practitioner is the independent provider of a medical service.

(c) "Nursing encounter" is an encounter between a registered nurse or licensed practical nurse and a patient in which the nurse is acting independently and provides a nursing service. The service may be provided under standing orders of a physician, under specific instructions from a previous visit, or under supervision of a physician who has no direct contact with the patient during a visit. Examples of independent nursing encounters include:

(i) Administration of immunizations;

(ii) Injections (including allergy injections);

(iii) Dressing changes;

(iv) Suture removal.

(v) The supply visit for hormonal contraceptives (if blood pressure, weight, and/or other vital signs are taken); and

(vi) The return visit following insertion of an intrauterine device.

(2) "Dental encounter" is an encounter between a dentist or dental hygienist/oral therapist under the supervision of a dentist and a patient for provision of covered dental services. All dental hygienist or oral therapist services are included under this encounter definition.

(3) "Mental health encounter" is an encounter between a licensed psychologist or a licensed independent social worker and a patient for the provision of covered psychological services. A mental health encounter may also include mental health services provided by licensed social workers in accordance with rule 5101:3-4-29 of the Administrative Code.

(4) "Vision care encounter" is an encounter between an optometrist or optician and a patient for the provision of covered vision care services.

(5) "Speech and hearing encounter" is an encounter between an audiologist or speech pathologist and a patient for the provision of covered speech and hearing services. For purposes of the OHF program, providers shall report the numbers of individual speech and hearing procedures, in addition to speech and hearing encounters. Such reporting shall enable ODJFS to apply the speech and hearing visit limitation policy defined in paragraph (B)(3) of rule 5101:3-29-03 of the Administrative Code.

(6) "Physical medicine encounter" is an encounter between a physician, physical therapist, or a mechanotherapist and a patient for receipt of a covered physical medicine service. For purposes of the OHF program, providers will be reporting the numbers of individual physical medicine procedures in addition to physical medicine encounters. Such reporting will enable the ODJFS to apply the physical medicine procedure limitation policy defined in paragraph (B)(5) of rule 5101:3-29-03 of the Administrative Code.

(7) "Laboratory encounter" is an encounter between a medical professional and a patient to provide one of more laboratory procedures including specimen collection. Covered laboratory tests are identified in Chapter 5101:3-11 of the Administrative Code.

(8) "Radiology encounter" is an encounter between a medical professional and a patient to provide one or more x-ray procedures covered under medicaid as described in rule 5101:3-4-25 of the Administrative Code.

(9) "Transportation encounter" shall be billed on a unit basis. Each trip from the service site shall be counted as a unit of transportation. In order to meet the definition of a billable transportation unit of service, the transportation must be provided on the same date that another billable encounter or unit of service occurs.

(C) Medical supplies and drugs

(1) Medical supplies used as part of the visit are considered part of the medical encounter i.e., are incidental to a service provided (e.g., bandages, dressings, and adhesive) are to be included as cost items for purposes of prospective rate determination. Those items which are given to the patient to be used at home (e.g. contraceptive supplies, colostomy supplies) are to be billed and reimbursed according to provisions governing reimbursement for the medical supplier program described in Chapter 5101:3-10 of the Administrative Code. Types of medical supply items which are included as cost items cannot be billed separately under the medical supplier program.

(2) Drugs which are given as part of the visit at the facility are considered part of the medical encounter. Drugs that are dispensed for take-home use are considered a pharmacy service and are to be billed and reimbursed according to provisions governing coverage of drugs as set forth in Chapter 5101:3-9 of the Administrative Code.

(D) Contracted services -- It is recognized that OHFs may wish to augment staff-delivered services through contractual arrangements. Under the OHF program, services provided by contract must be provided on-site in order to be included as a cost item in determining the prospective rate. At the option of each participating OHF, services other than those required under paragraph (E)(1)(e) of rule 5101:3-29-01 of the Administrative Code may be provided on-site or off-site. When the services are provided at locations other than the location at the approved site, the contractor must bill these services to the ODJFS if the contractor participates in the medicaid program. Examples of other services may include physical therapy, speech therapy, dental services, or laboratory or X-ray services which are in addition to those listed in paragraph (E) of rule 5101:3-29-01 of the Administrative Code. The laboratory and X-ray services listed in paragraph (E) of rule 5101:3-29-01 of the Administrative Code must be provided on-site except as stated in paragraph (B) of rule 5101:3-11-04 of the Administrative Code.

Contracts for services required under paragraph (E) of rule 5101:3-29-01 of the Administrative Code and contracts for any additional services to be included in the prospective rate must stipulate that the OHF retains all authority and responsibility for patient care. The execution of a contract with another party does not terminate the legal responsibility of the qualified OHF to the ODJFS to assure that all program requirements are met and that all provisions of the provider agreement as set forth in rule 5101:3-1-17.2 of the Administrative Code are met.

Contracts pertaining to services must specify that the OHF assumes professional and administrative responsibility for the services rendered. In order for contractual arrangements to be recognized, OHFs must provide the following information to the ODJFS at the point of entry into the program and at any subsequent point when new contracts are negotiated or when existing contracts are revised:

(1) Identification by name and, where applicable, medicaid provider number of each individual practitioner providing services under contractual arrangements. Where the contract is let with a legal entity other than the individual practitioner, both the name of the legal entity and the names of any individual practitioners involved must be furnished.

(2) A written statement indicating, for each legal entity or individual practitioner, whether the contracted services are:

(a) To be included as a cost item and reimbursed under the applicable prospective rate assigned to the outpatient health facility; or

(b) To be billed independently by the legal entity or individual practitioner under contract.

(E) The following types of services must be billed by the OHF under a separate medicaid provider number since the cost-based rates for OHFs do not apply to these services:

(1) Claims for medicare crossover payments; and

(2) Claims for services provided to disability assistance patients.

Effective: 07/01/2009
R.C. 119.032 review dates: 04/14/2009 and 07/01/2014
Promulgated Under: 119.03
Statutory Authority: 5111.02
Rule Amplifies: 5111.01 , 5111.02 , 5111.021 , 5111.04
Prior Effective Dates: 11/10/83, 10/1/87, 4/18/88, 11/1/01, 5/1/05

5160-29-05 Reimbursement.

(A) Methods and standards for establishing payment rates

Payment for authorized services in an outpatient health facility (OHF) is calculated on a prospective reasonable cost-related basis from cost reports filed by each participating clinic. Rates are calculated on a clinic's cost of allowable items and services, and thus may vary from clinic to clinic, subject to the tests of reasonableness described in paragraphs (C) to (F) of this rule. While payments under a prospective system are not subject to audit and retroactive settlement or adjustment, the historical costs upon which prospective rates are based are audited AS described in paragraph (I) of this rule. Adjustments to the paid rates will be made if costs are found to be overstated or misrepresented in a manner which resulted in an overstatement of the previously determined prospective rate.

(1) Rates will be established for each of the following types of services rendered by a participating OHF:

(a) Medical services

(b) Laboratory services

(c) Radiological services

(d) Dental services

(e) Speech therapy and audiology services

(f) Mental health services

(g) Physical therapy services

(h) Transportation services

(i) Vision care services

(2) Cost of items which were not requirements during the period covered by the base line cost report but which became requirements or were imposed by federal court orders during the prospective rate year are met on a retroactive basis based on cost reports filed at the conclusion of the prospective year. Only those expenses associated with the new requirements, which require the addition of new personnel or equipment, are subject to the one-time retroactive settlement. Thereafter, such costs become recognized according to the methodology described in this rule.

(B) New facilities

Rates for new facilities will be computed as follows: Rates will be granted based on the average rates of all participating OHFs. Ongoing rates will be calculated from a cost report filed after one complete calendar year of experience. Ongoing rates will be computed according to the criteria set forth in paragraphs (C) to (F) of this rule (with no inflationary allowance) For purposes of reimbursement provisions contained in this paragraph, a "new facility" is defined as a health care provider meeting all of the qualifications delineated in rule 5101:3-29-01 of the Administrative Code.

(C) General provisions-allowable and reasonable costs

"Costs which are reasonable and related to patient care" are those contained in the following reference material in the following priority: "Health Insurance Manual 15 Provider Reimbursement Manual," "Health Insurance Manual 5 Principles of Reimbursement for Provider Costs," available at www.cms.hhs.gov/manuals/cmstoc.asp dated May 1, 2005 and "Generally Accepted Accounting Principles"; except that:

(1) Costs related to patient care and services that are not covered under the OHF program as described in rules 5101:3-29-01 to 5101:3-29-04 of the Administrative Code are not allowable.

(2) The straight line method of computing depreciation is A requirement for cost filing purposes, and it must be used for all depreciable assets.

(3) For purposes of determining allowable and reasonable cost in the purpose of goods and services from a related party, the following definition of related shall be used: "related" is one who enjoys, or has enjoyed within the previous five years, any degree of another business relationship with the owner or operator of the facility, directly or indirectly, or one who is related by marriage or birth to the owner or operator of the facility. Upper limits for costs associated with related party transactions are set forth in paragraph (F) of this rule.

(4) Tests of reasonableness include those identified in paragraphs (D) to (F) of this rule.

(5) ODJFS reserves the right to establish other tests of reasonableness which may be necessary to assure effective and efficient program administration.

(D) Ceiling on administrative and general costs

Administrative and general costs for each clinical site cannot exceed fifteen per cent of the site's total allowable costs.

(E) Tests of reasonableness on indirect costs

For each of the services identified in paragraph (A)(1) of this rule except for paragraph (A)(1)(a) of this rule, otherwise allowable costs allocated as shown in for indirect costs listed on the JFS 03421 as revised on July 1, 2001, will be adjusted in instances when hours of operation of the service component are less than thirty per week on an annualized basis. Any adjustment would be computed based on application of the ratio of actual hours of operation of the service component to a base of thirty hours per week on an annualized basis, not to exceed one hundred per cent.

(F) Tests of reasonableness-professional services

Costs recognized for rate setting purposes will be adjusted based on minimum required efficiency standards calculated as encounters per hour. Prospective rates established for any of the following service components will not exceed the lower of either the reported otherwise allowable cost divided by reported encounters of service or the reported allowable cost divided by the product of hours worked by a professional and the encounters per hour as shows below:

(1) Medical services- 2.4 encounters per hour (medical services include services of physicians, physician assistants, advanced practice nurses, and registered nurses)

(2) Dental services- 1.85 encounters per hour

(3) Mental health services-.8 encounters per hour

(4) Vision care services- 2.3 encounters per hour

(5) Speech and hearing services- 1.8 encounters per hour

(6) Physical medicine services- 2.0 encounters per hour

These efficiency standards may be periodically adjusted at the discretion of ODJFS based on efficiency standards established by the medicare fiscal intermediary for federally qualified health centers.

(G) Inflationary factor

An OHF's unit rates are calculated from historical cost information as reported in cost reports filed by each participating clinic for a prior cost-reporting period. Allowable and reasonable costs determined in accordance with this rule will be updated by an inflation factor as described in this paragraph. For allowable costs recognized in the cost report year, an inflationary factor will be added for various categories of cost equal to the total of the actual inflationary factor between the midpoint of the cost report year and the midpoint of the following year as established by the bureau of labor statistics and an estimated inflationary factor from the midpoint of the preceding year to the midpoint of the year for which the prospective rate is calculated based upon the preceding twelve-month average. For each calendar year for each of the following categories of costs, an inflationary factor will be computed using the monthly statistical data for the following areas from the bureau of labor statistics (unless otherwise specified):

(1) Personnel (e.g., nurses, administration, legal, accounting, management, data services, employee fringe benefits, medical records, operation and maintenance services, housekeeping, and laundry).

(2) Medical supplies subject to cost-related reimbursement and expenses.

(3) Nondurable goods (e.g., office supplies and printing).

(4) Fuel and utilities.

(5) Transportation services.

(6) Medical and rehabilitation professional personnel.

(7) Insurance.

(8) Real estate taxes.

(H) Cost report filing

As a condition for participation in the Title XIX program, all OHFs must submit cost reports on form JFS 03421 as specified in paragraphs (A) to (D) of this rule.

(1) Annual cost reports must be filed, except for initial program year as provided in paragraph (B) of this rule, by April first of each year for the period beginning January first and ending December thirty-first of the preceding calendar year.

(2) Failure to file an annual cost report by April first of each year will result in termination of the OHF's provider agreement, with such termination to be effective within thirty days unless a complete and adequate cost report is submitted by the OHF within that thirty-day period.

(3) If an incomplete or inadequate cost report is received prior to April first, ODJFS will notify the OHF that information is lacking. A corrected cost report is to be submitted within forty-five days of notification of inadequacy. Any resubmission of an inadequate cost report within the forty-five-day period or any failure to resubmit within forty-five days indicates a lack of good-faith effort and will result in immediate termination.

(4) The accrual method of accounting shall be used for all cost reports filed except that governmental institutions operating on a cash method may file on the cash method of accounting. The "accrual method of accounting" means that revenue is reported in the period when it is earned, regardless of when it is collected, and expenses are reported in the period in which they are incurred, regardless of when they are paid. The "cash method of accounting" means that revenues are recognized only when cash is received, and expenditures for expenses and asset items are not recorded until cash is disbursed for them.

(5) OHFs are required to identify all related organizations; i.e., related to the OHF by common ownership or control. The cost claimed on the cost reports for services, facilities, and supplies furnished by the related organization shall not exceed the lower of (a) the cost to the related organization or (b) the price of comparable services, facilities, or supplies generally available.

(I) Audits

(1) The prospective rates for services established for an OHF are not subject to subsequent adjustments except in instances of rate adjustments specified in paragraph (A) of this rule. The difference between the cost reported by a clinic in a cost report used for calculating the various prospective rates and those costs established by a field or on-site audit are subject to recovery in full by means of a retroactive rate adjustment of the prospective rates. Audit exceptions will apply to the various rates established for the prospective year upon which the cost report is based, if the errors in the cost report increase the various unit rates which otherwise would have been paid. All overpayments found in on-site audits not repaid within thirty days after the audit is finalized shall be certified to the state auditor and/or attorney general for collection in accordance with the provisions of state law.

(2) Audits will be conducted by ODJFS for services rendered by OHFs participating in Title XIX (medicaid). These audits are made pursuant to federal regulatory law and are empowered to ODJFS through section 5101.37 of the Revised Code. The examination of OHF costs will be made in accordance with generally accepted auditing standards necessary to fulfill the scope of the audit. To facilitate this examination, providers are required to make available all records necessary to fully disclose the extent of services provided to program recipients. The principal objective of the audit is to enable the department or its designee to determine that payments which have been made, or will be made, are in accordance with federal, state, and agency requirements. Based on the audit, adjustments will be made as required. Records necessary to fully disclose the extent of services provided and costs associated with those services must be maintained for a period of three years (or until the audit is completed and every exception is resolved). These records must be made available, upon request, to ODJFS and the U.S. department of health and human services for audit purposes. No payment for outstanding unit rates can be made if a request for audit is refused.

(3) There are basically two types of audits.

(a) The first is a desk audit of cost reports filed each year and subsequent calendar quarterly reports to ensure that no mathematical error occurs, that the cost calculations are consistent with the rate-setting formula as established by the department, and to identify categories of reported costs which, because of their exceptional nature, bear further contact with the OHF for clarification/amplification.

(b) The second is a field audit. These are performed on-site or where the necessary disclosure information is maintained to assure the OHF has complied with both cost principles and program regulations.

Cost reports shall be retained for at least three years. Summary reports for all on-site audits shall be maintained for public review in the Ohio department of job and family services for a period of one year. The depth of each on-site audit may vary depending upon the findings of computerized risk analysis profiles developed by the department taking into consideration such factors as cost category screens (cost categories above median), location, level of services provided medicaid recipients, occasions or frequency of services, and multi-shared costs. The depth of each on-site audit shall be at least sufficiently comprehensive in scope to ascertain, in all material respects, whether the costs as reported and submitted by the OHF are true, correct, and representative to the best of the facility's ability. Failure to retain or provide the required financial and statistical records renders the OHF liable for monetary damages equal to the difference between:

(i) Established categorical unit rates paid to the provider for the prospective year in question; and

(ii) The lowest categorical unit rates for like services paid in the state of Ohio to an OHF similar in structure.

Eff 11-10-83; 11-1-01; 5-1-05
Promulgated Under: 119.03
Statutory Authority: 5111.02
Rule Amplifies: 5111.01 , 5111.02 , 5111.04
R.C. 119.032 review dates: 11/17/2004 and 05/01/2010