DEPARTMENT OF HUMAN SERVICES - New Jersey



HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

Independent Clinic Services

FQHC Reimbursement

Proposed Amendments: N.J.A.C. 10:66-1.5 and 10:66-4 Appendix D

Authorized By: Jennifer Velez, Commissioner,

Department of Human Services.

Authority: N.J.S.A. 30:4D-1 et seq., and 30:4J-8 et seq.

Calendar Reference: See Summary below for explanation of exception to calendar requirement.

Agency Control Number: 10-P-03.

Proposal Number: PRN 2010-039.

Submit comments by August 6, 2010 to:

Margaret Rose

Division of Medical Assistance and Health Services

P.O. Box 712

Trenton, NJ 08625-0712

Fax: (609) 588-7343

Email: Margaret.Rose@dhs.state.nj.us

Delivery: 6 Quakerbridge Plaza

Mercerville, NJ 08619

The agency proposal follows:

Summary

This notice of proposal amends N.J.A.C. 10:66-1.5(d)1vi to revise the method of reimbursement to Federally qualified health centers (FQHCs) in instances of changes in scope of service furnished by the FQHCs.

Specifically, the following amendments are proposed:

At N.J.A.C. 10:66-1.5(d)1vi, which provides that PPS encounter payment rates may be adjusted for increases or decreases in the scope of services furnished by the FQHC during a fiscal year, a proposed amendment at N.J.A.C. 10:66-1.5(d)1vi(2)(B) removes a parenthetical explaining the term reasonable costs. Another proposed amendment would provide that phase-in periods will be no less than 18 months and no more than 24 months. Another proposed amendment would require that Medicaid data from the last 12 months of a phase-in period shall be utilized to calculate the post phase-in period rate, with examples of such 12-month periods provided.

In proposed new N.J.A.C. 10:66-1.5(d)1vi(3)(A), the rate calculation for a change in scope of service is explained using formulas, data defined elements and narrative, which collectively provide as follows. Provider specific PPS rates due to a change in scope of service shall be equal to the Medicaid total costs (TCM) divided by the Medicaid total encounters (TEM) and shall be calculated utilizing the following calculation and Worksheet 1 contained in newly proposed N.J.A.C. 10:66-4 Appendix D. The Medicaid total costs (TCM) shall be equal to the Medicaid payments for encounters not related to the change in scope of service (PM) plus the Medicaid costs related to the change in scope of service (CISCM). The Medicaid payments for encounters not related to the change in scope of service (PM) shall be equal to the Medicaid PPS rate effective during the rate calculation period (RM) multiplied by the Medicaid encounters not related to the change in scope of service (EM). The Medicaid costs related to the change in scope of service (CISCM) shall be equal to the Medicaid encounters related to the change in scope of service (CISEM) multiplied by the PPS rate for the change in scope of service encounters (CISR). CISR shall be equal to the total costs related to the change in scope of service for all payors divided by the total encounters related to the change in scope of service for all payors. The Medicaid total encounters (TEM) shall be equal to the Medicaid encounters not related to the change in scope of service (EM) plus the Medicaid encounters related to the change in scope of service (CISEM). CISR is the PPS rate for the change in scope of service encounters. CISR is equal to the total costs related to the change in scope of service for all payors divided by the total encounters related to the change in scope of service for all payors.

Proposed new N.J.A.C. 10:66-1.5(d)1vi(3)(B) would provide that separate PPS rates shall be calculated for separate phase-in and post phase-in periods, and that the calculations shall utilize formula described in N.J.A.C. 10:66-1.5(d)1vi(3) for all periods, with the following clarifications: (i) when prospectively setting the PPS rate, the Medicaid encounters not related to the change in scope of service shall be defined as the sum of the prior calendar year’s Medicaid fee-for-service and Medicaid HMO encounters; partial years shall be prorated based on the number of days in the change in scope of service period as a percent to the total year; (ii) when setting the PPS rate based on actual cost data, the Medicaid encounters not related to the change in scope of service shall be defined as the sum of the actual Medicaid fee-for-service and Medicaid HMO encounters not related to the change in scope of service; (iii) the post phase-in period rate calculation is the final 12-month phase-in rate increased by the percentage increase in the MEI as defined in section 1842(i)(3) of the Social Security Act, 42 U.SC. §1395u(i)(3); the encounter and cost data utilized shall be the average of the last 12 months of Medicaid data for the change in scope of service period; this rate will result in a blended rate; once this is calculated, no previous rates will be used.

Existing N.J.A.C. 10:66-1.5(d)1vi(3) through (6) would be recodified as (4) through (7), with no change in the existing text.

The Department has determined that the comment period for this notice of proposal will be at least 60 days; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this notice is excepted from the rulemaking calendar requirement.

Social Impact

The proposed amendments should have a positive social impact because they will allow FQHC providers to more easily change the scope of services provided in a manner that also accordingly adjusts the reimbursement provided for the new scope of services. This should result in services being better tailored to the actual needs of beneficiaries and, consequently, a better quality of life for those beneficiaries.

Economic Impact

The proposed amendments will likely have no economic impact on beneficiaries, who will continue to receive services through the Medicaid/NJ FamilyCare program. The proposed amendments will provide the opportunity for additional funding to the FQHC industry beyond the current methodology. It is difficult to determine the exact economic impact that the proposed amendments will have on providers because that impact will depend on the applications and information submitted by the providers. The Division has analyzed one completed application and has determined the financial impact to be a positive rate increase of 17.7 percent, or nearly $800,000 per year for one FQHC provider. The annual Medicaid fee-for-service expenditure on FQHC services is approximately $75 million.

Federal Standards Statement

Section 1905(a)(2)(c) of the Social Security Act, 42 U.S.C. §1396d(a)(2)(c), requires states to cover FQHC services. FQHC services are defined at Section 1905(l)(2)(A) of the Social Security Act, 42 U.S.C. §1396d(l)(2).

Title XXI of the Social Security Act allows states to establish a children's health insurance program for targeted low-income children. New Jersey elected this option through implementation of the NJ FamilyCare program. Section 2103 of the Social Security Act, 42 U.S.C. §1397cc, provides broad coverage guidelines for the program. Section 2110 of the Act, 42 U.S.C. §1397jj, allows clinic services, including health center services, and other ambulatory health care services, for the children's health insurance program.

The Department has reviewed the Federal statutory and regulatory requirements and has determined that the proposed amendments do not exceed Federal standards. Therefore, a Federal standards analysis is not required.

Jobs Impact

The proposed amendments address the calculation of reimbursement rates for FQHCs and are not expected to cause the generation or loss of jobs in the State of New Jersey.

Agriculture Industry Impact

Since the proposed amendments address the calculation of reimbursement rates for FQHCs, the Department anticipates that the rules will have no impact on the agriculture industry in the State of New Jersey.

Regulatory Flexibility Analysis

The proposed amendments will affect only those FQHC providers who render services to beneficiaries. Some of the FQHCs may be considered small businesses under the terms of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. The proposed amendments revise existing recordkeeping, reporting and compliance requirements on providers, as described in the Summary above. These requirements are the minimum requirements necessary to ensure the program's fiscal integrity and to ensure appropriate care for beneficiaries.

All providers, regardless of size, are required to maintain sufficient records to indicate the name of the patient, dates of service, nature and any additional information, as may be required by N.J.A.C. 10:49 and N.J.S.A. 30:4D-1 et seq., specifically 30:4D-12. There should be no need to hire any additional professional staff.

All recordkeeping, reporting and compliance requirements must be equally applicable to all providers regardless of business size, because all providers must use the appropriate codes for billing purposes to receive proper reimbursement. The Department will not differentiate between large and small businesses in these rules, due to the need for consistent standards for provider reimbursement and quality of beneficiary care.

There should be no capital costs or ongoing compliance costs associated with the proposed amendments.

Smart Growth Impact

Since the proposed amendments address the calculation of reimbursement rates for FQHCs, the Department anticipates that the rules will have no impact on the achievement of smart growth in New Jersey or on the implementation of the State Development and Redevelopment Plan.

Housing Affordability Impact

Since the proposed amendments address the calculation of reimbursement rates for FQHCs, the Department anticipates that the rules will have no impact on the average costs associated with housing and would not have an impact on affordable housing in New Jersey.

Smart Growth Development Impact

Since the proposed amendments address the calculation of reimbursement rates for FQHCs, the Department anticipates that the rules will have no impact on housing production within Planning Areas 1 or 2, or within designated centers, under the State Development and Redevelopment Plan.

Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

SUBCHAPTER 1. GENERAL PROVISIONS

10:66-1.5 Basis for reimbursement

(a) – (c) (No change.)

(d) The basis for reimbursement for services provided in an FQHC for periods beginning January 1, 2001 shall be as follows:

1. Effective with services performed on or after January 1, 2001 and for each year thereafter, Medicaid payments to the FQHCs shall be based on prospective payment rates, as determined in accordance with this [rule] section, and shall be used solely to reimburse for encounters.

i. (No change.)

ii. The baseline PPS encounter rates for services provided from July 1, 2001 to December 31, 2001 shall be based on the FY 1999 and FY 2000 cost reports and shall be calculated based on the following:

(1) (No change.)

(2) The final PPS encounter rate for services provided from July 1, 2001 to December 31, 2001, shall be calculated by adding the final settled Medicaid costs of the FY 1999 and FY 2000 cost reports together and dividing the total by the sum of the number of final settled encounters for FY 1999 and FY 2000 provided to Medicaid beneficiaries during the FY 1999 and FY 2000 fiscal years, adjusted for a change in scope of services in accordance with (e)1vi(1) and inflation using the percentage increase in the MEI (defined in section 1842(i)(3) of the Social Security Act) applicable to primary care services (as defined in section 1842(i)(4)) furnished through December 31, 2000.

(A) The final settled Medicaid costs from the FY 1999 and FY 2000 cost reports shall be adjusted as follows:

Recodify existing (i) - (iv) as (I) – (IV) (No change in text.)

(3) (No change.)

(4) The alternative methodology to calculate final PPS encounter rate for services provided from July 1, 2001 to December 31, 2001 shall be calculated on the greater of the FY 1999 or FY 2000 final settled Medicaid cost report, adjusted for a change in scope of services in accordance with (e)1vi(1) and inflation using the percentage increase in the MEI (as defined in section 1842(i)(3) of the Social Security Act) applicable to primary care services (as defined in section 1842(i)(4)) furnished through December 31, 2000. The alternative methodology shall result in a payment to the FQHC of an amount that is at least equal to the PPS methodology and satisfies the BIPA requirements. FQHCs that have elected the alternative methodology shall have a single opportunity to request a change to the PPS methodology, which shall be applied prospectively. Once an FQHC has opted out of the alternative methodology, it is no longer eligible to receive the alternative methodology.

(A) The final settled Medicaid costs for the FY 1999 and FY 2000 cost reports shall be adjusted as follows:

Recodify existing (i) – (iv) as (I) – (IV) (No change in text.)

(B) (No change.)

iii. – v. (No change.)

vi. The PPS encounter payment rates may be adjusted for increases or decreases in the scope of services furnished by the FQHC during that fiscal year.

(1) (No change.)

(2) “Change in Scope of Service Applications” shall be governed by the following procedures:

(A) (No change.)

(B) Providers shall submit documentation or schedules [which] that substantiate the changes and the increase/decrease in services and costs [(reasonable costs following the tests of reasonableness used in developing the baseline rates)] related to these changes. The changes shall be significant with substantial increases or decreases in costs, as defined in (d)1vi(3) below, and documentation must include data to support the calculation of an adjustment to the PPS rate. It is recognized that the change in scope of service will be time-limited in most cases, due to start-up/phase-in costs or shut down/phase out costs associated with the change in scope of service. Phase-in periods will be no less than 18 months and no more than 24 months. The provider must address this in the Change in Scope of Service Application. Medicaid data from the last 12 months of the phase-in period shall be utilized to calculate the post phase-in period rate. For example:

(I) An 18-month phase-in period that crosses two calendar years = July 1st start date of calendar year one through December 31st of calendar year two. The last 12 months of data is January 1st through December 31st of calendar year two.

(II) An 18-month phase-in period that crosses three calendar years = November 1st start date of calendar year one through April 30th of calendar year three. The last 12 months of data is May 1st of calendar year two through April 30th of calendar year three.

(III) A 24-month phase-in period that crosses two calendar years = January 1st start date of calendar year one through December 31st of calendar year two. The last 12 months of data is January 1st through December 31st of calendar year two.

(IV) A 21-month phase-in period that crosses two calendar years = April 1st start date of calendar year one through December 31st of calendar year two. The last 12 months of data is January 1st through December 31st of calendar year two.

(3) The rate calculation for a change in scope of service is as follows:

(A) Provider specific PPS rates due to a change in scope of service shall be equal to the Medicaid total costs (TCM) divided by the Medicaid total encounters (TEM) and shall be calculated utilizing the following calculation and Worksheet 1 contained in N.J.A.C. 10:66-4 Appendix D, incorporated herein by reference:

PPS Rate = TCM / TEM

Where: TCM = PM + CISCM

TEM = EM + CISEM

And: PM = RM * EM

CISCM = CISEM * CISR

(I) The narrative of this calculation is:

The provider specific PPS rate due to a change in scope of service shall be equal to the Medicaid total costs (TCM) divided by the Medicaid total encounters (TEM). The formula is: PPS Rate = TCM / TEM.

The Medicaid total costs (TCM) shall be equal to the Medicaid payments for encounters not related to the change in scope of service (PM) plus the Medicaid costs related to the change in scope of service (CISCM). The formula is: TCM = PM + CISCM.

The Medicaid payments for encounters not related to the change in scope of service (PM) shall be equal to the Medicaid PPS rate effective during the rate calculation period (RM) multiplied by the Medicaid encounters not related to the change in scope of service(EM). The formula is: PM = RM * EM.

The Medicaid costs related to the change in scope of service (CISCM) shall be equal to the Medicaid encounters related to the change in scope of service (CISEM) multiplied by the PPS rate for the change in scope of service encounters (CISR). CISR shall be equal to the total costs related to the change in scope of service for all payors divided by the total encounters related to the change in scope of service for all payors. The formula is: CISCM = CISEM * CISR.

The Medicaid total encounters (TEM) shall be equal to the Medicaid encounters not related to the change in scope of service (EM) plus the Medicaid encounters related to the change in scope of service (CISEM). The formula is: TEM = EM + CISEM.

(II) The defined data elements of the above calculation are:

TCM is the Medicaid total costs.

TEM is the Medicaid total encounters.

PM is the Medicaid payments for encounters not related to the change in scope of service.

EM is the Medicaid encounters not related to the change in scope of service.

RM is the Medicaid PPS rate effective during the rate calculation period.

CISCM is the Medicaid costs related to the change in scope of service.

CISEM is the Medicaid encounters related to the change in scope of service.

CISR is the PPS rate for the change in scope of service encounters. CISR is equal to the total costs related to the change in scope of service for all payors divided by the total encounters related to the change in scope of service for all payors.

(B) Separate PPS rates shall be calculated for the separate phase-in and post phase-in periods. The calculations shall utilize the formula contained in (d)1vi(3) above for all periods, with the following clarifications:

(I) When prospectively setting the PPS rate, the Medicaid encounters not related to the change in scope of service shall be defined as the sum of the prior calendar year’s Medicaid fee-for-service and Medicaid HMO encounters. Partial years shall be prorated based on the number of days in the change in scope of service period as a percent to the total year.

(II) When setting the PPS rate based on actual cost data, the Medicaid encounters not related to the change in scope of service shall be defined as the sum of the actual Medicaid fee-for-service and Medicaid HMO encounters not related to the change in scope of service.

(III) The post phase-in period rate calculation is the final 12 month phase-in rate increased by the percentage increase in the MEI as defined in section 1842(i)(3) of the Social Security Act, 42 U.S.C. §1395u(i)(3). The encounter and cost data utilized shall be the average of the last 12 months of Medicaid data for the change in scope of service period. This rate will result in a blended rate. Once this is calculated, no previous rates will be used.

Recodify existing (3) – (6) as (4) – (7) (No change in text.)

vii.-x. (No change.)

(e) (No change.)

(Agency Note: The text of proposed new N.J.A.C. 10:66-4 Appendix Worksheet 1 follows without boldface symbolizing proposed new text; those portions of the appendices appearing in boldface are proposed to be so permanently.)

SUBCHAPTER 4. FEDERALLY QUALIFIED HEALTH CENTER (FQHC)

Appendix D

A. – D. (No change.)

...

Worksheet 1

[pic]

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download