5160-2-10. Payment policies for disproportionate share and indigent care adjustments for psychiatric hospitals

This rule is applicable for each program year for all medicaid-participating psychiatric hospitals as described in paragraphs (B) to (F) of rule 5160-2-01 of the Administrative Code.

(A) Definitions for each psychiatric hospital.

(1) "Inpatient days" is the number of inpatient hospital days as reported on ODM 02930, for the applicable state fiscal year, schedule C, section I, column 4.

(2) "Insurance revenues" are the revenues received in the same twelve months of the hospital's cost-reporting period for inpatient services provided to, billed to, and received from all sources other than medicaid or self-pay revenues as described in paragraph (A)(4) of this rule. Each psychiatric hospital reports insurance revenues on ODM 02930, schedule F, section II, column 1.

(3) "Medicaid inpatient utilization rate" is the ratio of the psychiatric hospital's number of inpatient days attributable to patients who were medicaid eligible as described in paragraph (A)(6) of this rule divided by the psychiatric hospital's total number of inpatient days as described in paragraph (A)(1) of this rule.

(4) "Self-pay revenues" are the revenues received in the same twelve months of the hospital's cost-reporting period for inpatient services provided to, billed to, and received from either the person that received inpatient services or the family of the person that received inpatient services. Each psychiatric hospital reports self-pay revenues on ODM 02930, schedule F, section II, column 2 .

(5) "Total inpatient allowable costs" is the sum of the general service and capital related costs for inpatient hospital services. Each psychiatric hospital reports total inpatient allowable costs on ODM 02930 schedule B, column 7.

(6) "Total medicaid days" is the sum of the amounts that each psychiatric hospital reports ODM 02930, schedule F, section II, columns 6 and 8 . For hospitals meeting the conditions set forth in paragraphs (E) and (F) of rule 5160-2-01 of the Administrative Code, total medicaid days is the sum of the amounts reported on ODM 02930, schedule F, section II, columns 6 to 8 .

(7) "Total medicaid revenues" are the revenues received in the same twelve months of the hospital's cost-reporting period for inpatient services provided to, billed to, and received from all sources other than insurance revenues as described in paragraph (A)(2) of this rule or self-pay revenues as described in paragraph (A)(4) of this rule. Each psychiatric hospital reports total medicaid revenues on ODM 02930, schedule H, section I, column 1.

(8) "Uncompensated care costs" is the amount calculated by subtracting the sum of the total facility inpatient revenue as described in paragraph (A)(12) of this rule and the uncompensated care costs rendered to patients with insurance as described in paragraph (A)(9) of this rule from the total inpatient allowable costs as described in paragraph (A)(5) of this rule.

(9) "Uncompensated care costs rendered to patients with insurance" is the costs for an individual that has insurance coverage for the service provided, but the full cost of the service was not reimbursed because of per diem caps or coverage limitations. Each psychiatric hospital reports uncompensated care costs rendered to patients with insurance on ODM 02930, schedule F, section II, column 5 .

(10) "Charges for charity care" is the total charges for inpatient services provided to indigent patients, which includes charges for services provided to individuals who do not possess health insurance for the service provided. Charity care does not include bad debts, contractual allowances, or uncompensated care costs rendered to patients with insurance as described in paragraph (A)(9) of this rule. Each psychiatric hospital reports charges for charity care on ODM 02930, schedule F, section II, column 3.

(11) "Total charges for inpatient services" for each psychiatric hospital, except for free-standing, state-owned psychiatric hospitals, is the sum of the amounts reported for inpatient hospital services on ODM 02930, schedule B, column 6. For free-standing, state-owned psychiatric hospitals, "total charges for inpatient services" equals "total inpatient allowable costs" as defined in paragraph (A)(5) of this rule.

(12) "Total facility inpatient revenues" is the sum of the hospital's insurance revenues as described in paragraph (A)(2) of this rule, self-pay revenues as described in paragraph (A)(4) of this rule, and total medicaid revenues as described in paragraph (A)(7) of this rule.

(13) "Cash subsidies for inpatient services received directly from state and local governments" is the amount of cash subsidies each psychiatric hospital has received from state and local governments for inpatient services for the applicable state fiscal year. In accordance with paragraph (C) of this rule, each psychiatric hospital reports cash subsidies received from state and local government on ODM 02930, schedule F, section II, column 4.

(B) Applicability.

The requirements of this rule are limited pursuant to section 1923 of the Social Security Act, 42 USC 1396r-4(effective July 1, 1988).

(C) Source data for calculations.

The calculations described in this rule will be based on cost-reporting data described in paragraph (B)(1) of rule 5160-2-08 of the Administrative Code.

(D) Determination of disproportionate share qualifications for psychiatric hospitals.

Psychiatric hospitals will be determined to be disproportionate share if based on data described in paragraph (C) of this rule, they meet either qualification described in paragraph (D)(1) or (D)(2) of this rule and meet the qualification in paragraph (D)(3) of this rule.

(1) The hospital's medicaid inpatient utilization rate, as described in paragraph (A)(3) of this rule, is at least one standard deviation above the mean medicaid inpatient utilization rate for all hospitals receiving medicaid payments in the state; or

(2) The hospital's low-income utilization rate exceeds twenty-five per cent. The low-income utilization rate, which is a fraction expressed as a percentage, is the sum of:

(a) The sum of total medicaid revenues for inpatient services as described in paragraph (A)(7) of this rule and cash subsidies for inpatient services received directly from state and local governments as described in paragraph (A)(13) of this rule, divided by the sum of total facility inpatient revenues as described in paragraph (A)(12) of this rule and cash subsidies for inpatient services received directly from state and local governments as described in paragraph (A)(13) of this rule, plus

(b) Total charges for inpatient services for charity care as described in paragraph (A)(10) of this rule (less cash subsidies above, and not including contractual allowances and discounts other than for indigent patients ineligible for medicaid) divided by the total charges for inpatient services, as described in paragraph (A)(11) of this rule.

(3) A medicaid inpatient utilization rate as described in paragraph (A)(3) of this rule greater than or equal to one per cent.

(E) Determination of psychiatric hospital disproportionate share groupings for payment distribution.

Hospitals determined to qualify for disproportionate share as described in paragraph (D) of this rule will be classified into one of three tiers based on data described in paragraph (C) of this rule. The groupings for payment distribution are described in paragraphs (E)(1) to (E)(3) of this rule.

(1) Tier one includes hospitals that meet the criteria in either paragraph (E)(1)(a) or (E)(1)(b) of this rule.

(a) Hospitals deemed to be disproportionate share hospitals based on a low-income utilization rate as described in paragraph (D)(2) of this rule greater than twenty-five per cent but less than forty per cent.

(b) Hospitals with a low-income utilization rate as described in paragraph (D)(2) of this rule less than or equal to twenty-five per cent that are deemed a disproportionate share hospital based on a medicaid inpatient utilization rate as described in paragraph (D)(1) of this rule.

(2) Tier two includes all hospitals deemed to be disproportionate share hospitals based on a low-income utilization rate as described in paragraph (D)(2) of this rule greater than or equal to forty per cent but less than fifty per cent.

(3) Tier three includes all hospitals deemed to be disproportionate share hospitals based on a low-income utilization rate as described in paragraph (D)(2) of this rule greater than or equal to fifty per cent.

(F) Distribution of funds within each hospital tier.

The funds available to each psychiatric hospital tier as described in paragraph (E) of this rule are distributed among the hospitals in each tier based on data described in paragraph (C) of this rule and according to the payment formulas described in paragraphs (F)(1) to (F)(3) of this rule.

(1) A maximum of ten per cent of the disproportionate share funds available to psychiatric hospitals as described in paragraph (H) of this rule will be distributed to the hospitals in tier one as described in paragraph (E)(1) of this rule according to the process described in paragraphs (F)(1)(a) to (F)(1)(f) of this rule.

(a) For each hospital in tier one, calculate the uncompensated care costs as described in paragraph (A)(8) of this rule.

(b) For all hospitals in tier one, sum all hospitals' uncompensated care costs as described in paragraph (A)(8) of this rule.

(c) For each hospital in tier one, calculate the ratio of the amount described in paragraph (F)(1)(a) of this rule to the amount described in paragraph (F)(1)(b) of this rule.

(d) Multiply the ratio for each hospital calculated in paragraph (F)(1)(c) of this rule in tier one by the amount in paragraph (F)(1) of this rule to determine each hospital's disproportionate share payment amount.

(e) Each hospital will be distributed a payment amount based on the lesser of:

(i) Uncompensated care costs as determined in paragraph (A)(8) of this rule; or

(ii) The hospital's disproportionate share payment as determined in paragraph (F)(1)(d) of this rule.

(f) If no hospitals fall into tier one, or all funds are not distributed, then undistributed funds from tier one will be added to the funds available for distribution in tier three and be distributed in accordance with the process described in paragraphs (F)(3)(a) to (F)(3)(e) of this rule.

(2) A maximum of thirty per cent of the disproportionate share funds available to psychiatric hospitals as described in paragraph (H) of this rule will be distributed to the hospitals in tier two as described in paragraph (E)(2) of this rule according to the process described in paragraphs (F)(2)(a) to (F)(2)(f) of this rule.

(a) For each hospital in tier two, calculate the uncompensated care costs as described in paragraph (A)(8) of this rule.

(b) For all hospitals in tier two, sum all hospitals' uncompensated care costs as described in paragraph (A)(8) of this rule.

(c) For each hospital in tier two, calculate the ratio of the amount described in paragraph (F)(2)(a) of this rule to the amount described in paragraph (F)(2)(b) of this rule.

(d) Multiply the ratio for each hospital calculated in paragraph (F)(2)(c) of this rule in tier two by the amount in paragraph (F)(2) of this rule to determine each hospital's disproportionate share payment amount.

(e) Each hospital will be distributed a payment amount based on the lesser of:

(i) Uncompensated care costs as determined in paragraph (A)(8) of this rule; or

(ii) The hospital's disproportionate share payment as determined in paragraph (F)(2)(d) of this rule.

(f) If no hospitals fall into tier two, or all funds are not distributed, then undistributed funds will be added to the funds available for distribution in tier three and be distributed in accordance with the process described in paragraphs (F)(3)(a) to (F)(3)(e) of this rule.

(3) A minimum of sixty per cent of the disproportionate share funds available to psychiatric hospitals as described in paragraph (H) of this rule will be distributed to the hospitals in tier three as described in paragraph (E)(3) of this rule according to the process described in paragraphs (F)(3)(a) to (F)(3)(e) of this rule.

(a) For each hospital in tier three, calculate the uncompensated care costs as described in paragraph (A)(8) of this rule.

(b) For all hospitals in tier three, sum all hospitals uncompensated care costs as described in paragraph (A)(8) of this rule.

(c) For each hospital in tier three, calculate the ratio of the amount described in paragraph (F)(3)(a) of this rule to the amount described in paragraph (F)(3)(b) of this rule.

(d) Multiply the ratio for each hospital calculated in paragraph (F)(3)(c) of this rule in tier three by the amount in paragraph (F)(3) of this rule to determine each hospital's disproportionate share payment amount.

(e) Each hospital will be distributed a payment amount based on the lesser of:

(i) Uncompensated care costs as determined in paragraph (A)(8) of this rule; or

(ii) The hospital's disproportionate share payment as determined in paragraph (F)(3)(d) of this rule.

(G) Payments.

The department shall make payment in accordance with paragraphs (E) and (F) of this rule to hospitals that are eligible to participate in the medicaid program only for the provision of inpatient psychiatric services as described in rule 5160-2-01 of the Administrative Code and that also meet the disproportionate share criteria described in paragraph (D) of this rule.

(H) Disproportionate share funds.

The maximum amount of disproportionate share funds available for distribution to psychiatric hospitals will be determined by subtracting the funds distributed in accordance with rule 5160-2-09 of the Administrative Code from the state's disproportionate share limit payment allotment determined by the United States centers for medicare and medicaid services (CMS) for that program year.

Effective: 6/25/2015
Five Year Review (FYR) Dates: 03/19/2015 and 06/25/2020
Promulgated Under: 119.03
Statutory Authority: 5164.02, 5168.02
Rule Amplifies: 5162.03, 5164.02, 5164.70, 5168.01, 5168.02 , 5168.13
Prior Effective Dates: 8/12/95, 6/1/96 (Emer), 9/25/96 (Emer), 12/5/96, 12/6/97, 9/10/98, 9/26/99, 9/28/00, 9/27/01, 7/22/02, 7/28/03, 7/1/04, 7/22/05 , 9/15/06