Md. Code Regs. 10.37.10.03

Current through Register Vol. 51, No. 22, November 1, 2024

Section 10.37.10.03 - Regular Rate Applications

A. A hospital may not file a full rate application with the Commission until the Commission staff is able to determine through analysis that the data used to evaluate a full rate application has not been substantially affected by the COVID pandemic. During this interim period, a hospital may seek a rate adjustment under any other administrative remedy available to it under existing Commission law, regulation, or policy. In no event shall this moratorium continue in effect beyond June 30, 2023. Once the moratorium is lifted, a hospital may file a regular rate application at any time if:

(1) The rates being requested are not the subject of a hospital-instituted case pending before the Commission; or

(2) The subject hospital has not obtained permanent rates through the issuance of a Commission rate order within the previous 365 days.

B. Full Rate Application.

(1) "Full rate application" means a regular rate application which requests the amendment of more than one previously approved rate.

(2) In order for a full rate application to be docketed, it shall comply with a template for such applications as prescribed by the Commission staff and shall:

(a) Enumerate the services for which new rates are being requested, listing present and proposed rates;

(b) Be accompanied by appropriate supporting documents, including:

(i) The Annual Report of Revenues, Expenses, and Volumes projected and explained (e.g., how much of the requested increase relates to inflation, volumes, and other factors) for the period for which the hospital requests new rates;

(ii) Any audited financial statements over the most recent 5 years not yet filed with the Commission, plus the most recent unaudited financial statements for the current period, which are available at the time of the filing of the full rate application;

(iii) An Excel file listing and summarizing balance sheets, statements of operations and changes in net assets, and statements of cash flow for the last 5 years per the audited financial statements along with a narrative explaining any major changes;

(iv) An Excel file listing the information contained within the Annual Report RE schedules for the last 5 years breaking out regulated and unregulated revenues and expenses by category and in total;

(v) A detailed history of HSCRC-approved revenue and actual revenue for the hospital for the last 2 calendar years;

(vi) A detailed history for the most recent 4 Rate Years of HSCRC-approved GBR revenue and actual revenue and volumes, in addition to any approved and actual revenue and volumes available at the date of the filing of the full rate application. The history of approved and actual revenue changes should detail the basis of the changes in approved and actual revenue including allowed inflation and all other factors;

(vii) An identification of related organizations (i.e., an organization related to the hospital through some type of control or ownership), including subsidiaries of the hospital as well as hospitals that are part of the same hospital system as the applicant hospital. For applicant hospitals that are part of a system, the hospital may be required to submit financial and other information related to the system hospitals, including any system transactions among the system hospitals, which may affect the financial condition of the applicant hospital;

(viii) A listing of any services provided by related organizations including the amount charged to the applicant hospital for the services;

(ix) A listing of any transfers of funds to or from a related organization including an explanation of such transfers;

(x) Copies of the two most recent Medicare Cost Reports, including any home office cost report files - the Interns and Resident Information System report (IRIS) files, and the wage and occupational mix files, along with any adjustments and corrections;

(xi) Reconciliations of inpatient and outpatient volumes and revenue submitted in the HSCRC abstract data to the departmental revenue and statistics submitted monthly for the last 3 years;

(xii) In Excel, listing of Outpatient drugs accounting for at least 80 percent of the Hospital's total outpatient drug expenses, with applicable HCPCS codes for last 3 years, including frequency of charges, amount of charges and units billed, Average Sales Price at the end of each year and applicable 340B discounts and an estimate of billed charges for unlisted drugs;

(xiii) For profits or losses associated with the support of physician practices, the applicant hospital may be required to provide a detailed accounting of those profits or losses over time. Additional information regarding compensation, subsidies and other forms of financial support provided to physicians may be required following staff's initial review to the extent that these profits or losses have a material impact on the financial condition of the applicant hospital;

(xiv) A supporting document, in Excel, that compares the requested departmental rates of the applicant hospital to that hospital's current departmental rates. The supporting document should also compare these current and requested departmental rates to those of other HSCRC-regulated hospitals located in the Primary Service Area (PSA) of the applicant hospital. If no other regulated hospitals are located in the applicant hospital's PSA, then the comparison should be made to Statewide median departmental rates; and

(xv) An accounting of the amounts reported by the applicant hospital to the HSCRC regarding its uses of population health infrastructure money included in rates;

(c) Include a description of the rate adjustments that are being requested in the full rate application;

(d) Include specific detail and substantiation of any circumstances the applicant hospital cites as unique to its facility, which would require revenue in excess of the amount currently provided in its approved regulated revenue;

(e) Describe in detail what the applicant hospital has specifically done consistent with the All-Payer Model to reduce or eliminate unnecessary or potentially avoidable utilization. For purposes of this regulation, unnecessary or potentially avoidable utilization means the utilization of health care items and services, including care furnished to treat complications during a hospital admission, that may be avoided through improved efficiency, care coordination, or effective community-based care, or that is not medically necessary or evidence-based care. The Staff may request additional information as needed;

(f) Provide estimates for the next 5 years of reductions in utilization that will be accomplished through care redesign initiatives;

(g) Provide a history of denials for the most recent 3 years, including any year-to-date figures; and

(h) Any additional information the Staff may request that bears directly on the hospital's request for rate relief and its financial condition.

(3) The provisions of §B(2) of this regulation may be waived by staff if the application applies only to:

(a) A request filed for a change in the applicant hospital's uncompensated care allowance;

(b) A request for rates to cover government-mandated or similar action affecting more than one previously approved rate for which the staff believes the provisions of §B(2) of this regulation are not necessary; or

(c) A request for rates associated with a Certificate of Need-approved capital project, which request may be considered to be a "partial rate application" by staff.

C. Uncompensated Care Policy.

(1) The Commission's rate-setting methodology shall include in the rates of each hospital a provision for a reasonable level of uncompensated care provided at the hospital. The Commission may use a regression analysis or other statistical method to establish the reasonable level of uncompensated care.

(2) In establishing a reasonable level of uncompensated care in a full rate review, the Commission shall consider for each hospital the:

(a) Amount of uncompensated care actually incurred;

(b) Predicted amount of uncompensated care; and

(c) The hospital's requested amount.

(3) A hospital may request a change in its approved provision of uncompensated care to the predicted amount by means of a partial rate application provided the request is revenue neutral.

Md. Code Regs. 10.37.10.03

Regulation .03 amended as an emergency provision effective June 15, 1998 (25:14 Md. R. 1127); emergency status expired December 15, 1998
Regulation .03 amended effective August 5, 2002 (29:15 Md. R. 1142)
Regulation .03A amended as an emergency provision effective July 1, 2000 (27:17 Md. R. 1616); emergency status extended at 27:26 Md. R. 2356; emergency status extended at 28:7 Md. R. 687; emergency status expired July 1, 2001
Regulation .03A amended effective November 7, 2005 (32:22 Md. R. 1756); October 8, 2007 (34:20 Md. R. 1740)
Regulation .03B amended effective September 1, 2003 (30:17 Md. R. 1203); March 15, 2004 (31:5 Md. R. 449)
Regulation .03C adopted effective November 19, 1984 (11:23 Md. R. 1993)
Regulation .03C amended effective October 3, 1988 (15:20 Md. R. 2334)
Regulation .03D adopted effective January 8, 1990 (16:26 Md. R. 2794)
Regulation .03D recodified as .03C effective August 5, 2002 (29:15 Md. R. 1142)
Regulation .03D adopted as an emergency provision effective January 1, 2004 (31:4 Md. R. 313); adopted permanently effective May 10, 2004 (31:9 Md. R. 713)
Regulation .03D amended as an emergency provision effective July 1, 2009 (36:15 Md. R. 1163); amended permanently effective October 5, 2009 (36:20 Md. R. 1529); amended effective 43:7 Md. R. 450, eff.4/11/2016; amended effective 44:1 Md. R. 12, eff. 1/16/2017; amended effective 45:1 Md. R. 14, eff. 1/15/2018; amended effective 48:25 Md. R.1071-1098, eff. 12/13/2021; amended effective 49:25 Md. R.1041-1070, eff. 11/3/2022; amended effective 50:8 Md. R. 338, eff. 5/1/2023