Ala. Admin. Code r. 560-X-60-.04

Current through Register Vol. 43, No. 1, October 31, 2024

Section 560-X-60-.04 - Reimbursement Methodology

(1) A Medicaid prospective payment system (PPS) for Provider Based Rural Health Clinics (PBRHCs) was enacted into law under section 702 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) of 2000. As described in section 1902(aa) of the Social Security Act, PBRHCs will be paid under a prospective payment system effective January 1, 2001. The rate setting period is from October 1 through September 30th.

(2) Prior to enactment of BIPA PBRHCs were reimbursed by the ratio of cost to charges. With the implementation of BIPA, PBRHC providers that provided Medicaid covered services will submit a cost report with their normal year end for the cost report period ending in 2000. This cost report will be settled. For the period January 1, 2001, through September 30, 2001, Alabama Medicaid Agency will pay PBRHCs 100% of the average of their reasonable costs of providing Medicaid covered services during FY 1999 and FY 2000, adjusted to take into account any increase (or decrease), see paragraph (4) below, in the scope of services furnished during FY 2001 by the PBRHC (calculating the payment amount on a per visit basis). Beginning in FY 2002, and for each fiscal year thereafter, each PBRHC is entitled to the payment amount (on a per visit basis) to which the PBRHC was entitled to in the previous fiscal year, increased by the percentage increase in the Medicare Economic Index (MEI) for primary care services, and adjusted to take into account any increase (or decrease) in the scope of services furnished by the PBRHC during that fiscal year. To determine reasonable cost an 80th percentile cost ceiling will be applied. The cost ceiling applied to the cost per encounter for PBRHCs reimbursement is derived as follows:

(a) The PBRHCs are listed in ascending order based on their respective computed cost per encounter.

(b) The number of PBRHCs is multiplied by 80% to determine the position of the PBRHC that represents the 80th percentile. If the 80th percentile does not fall on a whole number, the Agency will round up or down to the nearest whole number. If the number falls on .0 to .49, we will round down. If the number falls on .50 or higher, we will round up. Thus, 80% of the PBRHCs will have computed costs per encounter that are equal to or less than those of the 80th percentile PBRHC. Likewise, the remaining PBRHCs will have computed costs per encounter in excess of the costs of the 80th percentile.

(3) Reimbursement for an enrolled out-of-state PBRHC will be the lesser of the encounter rate established by the Medicaid Department of the out-of-state PBRHC or the average encounter rate established by Alabama Medicaid for in-state facilities.

(4) A new PBRHC provider or a provider who constructs, leases, or purchases a facility, or has a Medicaid approved change in the scope of services, can request reimbursement based on an operating budget, subject to the ceiling established under this rule. After the actual cost report is received and desk reviewed for the budget period, an actual encounter rate will be determined. In this event, the PBRHC may be subject to a retroactive adjustment based on the difference between budgeted and actual allowable costs. This difference may be subject to settlement within thirty (30) days after written notification by Medicaid to the provider of the amount of the difference. After the initial year, payment shall be set using the MEI methods used for other PBRHCs. A PBRHC that has a change of ownership can retain the previous owner's encounter rate if desired.

(5) Costs Reimbursed by Other Than the PBRHC Rate. Costs that are reimbursed by other Alabama Medicaid Agency programs will not also be reimbursed in the PBRHC Program. Examples of such reimbursements include, but are not limited to:

(a) Maternity Waiver - Primary Contractor (Note: Costs for Maternity Waiver sub-contractors are not an allowable cost and will be shown only in the non-reimbursable section of the cost report)

(b) Prescription Drugs by enrolled pharmacy providers

(c) In-patient and out-patient surgical service fee-for-service payments

(6) Grants, Gifts, Private Donations or the Income from Such Items, and Income from Endowments. Unrestricted grants, gifts, private donations or the income from such items, and income from endowments will not be deducted from operating costs in computing reimbursable cost. Grants, gifts, private donations, or the income from such items, or endowment income designated by a donor for paying specific operating costs must be deducted from the particular operating cost or group of costs.

Author: Keith Boswell, Reimbursement/QA

Ala. Admin. Code r. 560-X-60-.04

Emergency rule effective October 1, 1993. New Rule: Filed December 7, 1993; effective January 12, 1994. Amended: Filed February 7, 1994; effective March 15, 1994. Amended: Filed December 7, 1994; effective January 12, 1995. Amended: Filed December 8, 1999; effective January 12, 2000. Repealed and New Rule: Filed May 11, 2001; effective June 15, 2001.

Statutory Authority: Code of Ala. 1975, State Plan; Title XIX, Social Security Act Sec. 1902(a)(13), Balanced Budget Act of 1997, Se. 4712(c), 42 C.F.R. Sections 405.2460 - .2472 and 447.371.