NOTICE OF PROPOSED CHANGES ON MEDICAID INPATIENT DIAGNOSIS RELATED GROUP (DRG) REIMBURSEMENT IN THE REGULATIONS OF THE DEPARTMENT OF HEALTH.

The Department of Health proposes to adopt regulation changes in Title 7 of the Alaska Administrative Code, to change regulations on the Medicaid inpatient hospital reimbursement methodology from a cost-based per diem reimbursement to a diagnosis related group (DRG) payment methodology, including the following:

• 7 AAC 100. Medicaid Eligibility, is proposed to be changed as follows:
  • include the updated reference related to 7 AAC 150.160.

   

   

• 7 AAC 105. Medicaid Provider and Recipient Participation, is proposed to be changed as follows:
  • include the updated reference related to 7 AAC 150.160.

   

• 7 AAC 140. Medicaid Coverage; Facility and Facility-Based Services, is proposed to be changed as follows:
  • clarify reimbursement related to the length of hospitalization for providers reimbursed under the prospective payment system cost-based rates and under the Diagnosis Related Groups (DRG) payment methodology;
  • clarify the payment methodology of the provider’s reimbursement rate requirements.

     

• 7 AAC 145. Medicaid Payment Rates, is proposed to be changed as follows:
  • clarify how the department will pay an out-of-state general acute care hospital for outpatient and in-patient care services;
  • add a factor to determine whether the department will negotiate a facility-specific payment agreement; and
  • clarify whether the day of admission through the day of discharge, transfer to another facility, or death will be included in the payment made to a hospital under the DRG and the cost based prospective payment system.

     

• 7 AAC 150. Prospective Payment System; Other Payment, is proposed to be changed as follows:
  • remove unnecessary language;
  • distinguish between “per-day” and “per-stay” payment rates and the timeframe by which the department will establish the rates;
  • add a definition for prospective payment rates that are “per-stay” rates for inpatient services rendered in general acute care hospitals subject to the DRG payment methodology;
  • clarify whether a facility must provide the department separate bills for each prospective payment rate period;
  • repeal 7 AAC 150.100; the intended effect of this repeal is to remove the methodology and criteria for proportionate share payments to publicly owned or operated hospitals, to align with current practice.
  • distinguish between the prospective per-day and per-stay methodologies and applicability of requests to include certificate of need capital;
  • distinguish between the methodology and criteria for approval or modification of an inpatient and outpatient payment rate for hospitals subject to prospective per-day and percentage of charges payment rates and those subject to the DRG payment methodology for the Medicaid program;
  • add a new section to clarify costs;
  • clarify how the rates of a new facility or new psychiatric unit subject to DRG reimbursement will be calculated;
  • clarify the allowable costs for prospective per-day and percentage of charges rates, and limit costs authorized by a certificate of need to inpatient hospital providers not reimbursed under the DRG methodology;
  • clarify that a critical access hospital may qualify as a disproportionate share hospital (DSH);
  • clarify optional payment rate methodology and criteria for small facilities under the DRG payment methodology;
  • allow for either the date of electronic communication to the facility or a certificate showing the date of mailing to the facility as part of the procedure for establishing rates;
  • allow for either the date of electronic communication to the facility or a certificate showing the date of mailing to the facility as part of the administrative appeal process;
  • add a new section related to inpatient prospective payment based on diagnosis related groups necessary for implementation of the DRG payment methodology.

   

   

• 7 AAC 160. Medicaid Program; General Provisions, is proposed to be amended as follows:
  • update to include a new date on the material adopted by reference, Medicaid Hospital and Long-Term Care Facility Reporting Manual.

You may comment on the proposed regulation changes, including the potential costs to private persons of complying with the proposed changes, by submitting written comments to Ms. Marcey Bish by electronic mail at marcey.bish@alaska.gov or mail at the State of Alaska, Department of Health, Office of Rate Review, Attention: Marcey Bish, 3601 C Street, Suite 902, Anchorage, AK 99503. The comments must be received not later than 5 p.m. on September 8, 2023.

You may submit written questions relevant to the proposed action to Ms. Marcey Bish by electronic mail at marcey.bish@alaska.gov or mail at State of Alaska, Department of Health, Office of Rate Review, Attention: Marcey Bish, 3601 C Street, Suite 902, Anchorage, AK 99503. The questions must be received at least 10 days before the end of the public comment period. The Department of Health will aggregate its response to substantially similar questions and make the questions and responses available on the Alaska Online Public Notice System.

You may provide oral comments relevant to the proposed action via telephone at the hearing to be held on August 30, 2023, by calling 1-800-315-6338, and using participant code 24471. There will not be in-person attendance provided at the hearing site, so please prepare to share your oral comments by telephone only. The hearing is scheduled from 1:30 p.m. to 3:30 p.m., and priority will be given to commenters on the line before the beginning of the hearing. The hearing may be extended to accommodate those on the line before 3:00 p.m. who did not have an opportunity to comment. Before the start of the hearing, Department of Health may limit the time allotted for each person providing oral testimony, as reasonably necessary to conclude the hearing in the time provided.

If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Ms. Marcey Bish by electronic mail at marcey.bish@alaska.gov or phone at (907) 444-9318 not later than August 23, 2023, to ensure that any necessary accommodations can be provided.

A copy of the proposed regulation changes is available on the Alaska Online Public Notice System and by contacting Ms. Marcey Bish at marcey.bish@alaska.gov  or by phone at (907) 444-9318.

After the public comment period ends, the Department of Health will either adopt the proposed regulation changes or other provisions dealing with the same subject, without further notice, or decide to take no action. The language of the final regulation may be different from that of the proposed regulation. You should comment during the time allowed if your interests could be affected.

Statutory authority: AS 47.05.010; AS 47.05.012; AS 47.05.200; AS 47.07.020;

AS 47.07.030; AS 47.07.036; AS 47.07.040; AS 47.07.070; AS 47.07.071; AS 47.07.073; AS 47.07.074; AS 47.07.075; AS 47.07.080; AS 47.07.085.

Statutes being implemented, interpreted, or made specific: AS 47.05.010; AS 47.05.012; AS 47.05.200; AS 47.07.020; AS 47.07.030; AS 47.07.036; AS 47.07.040; AS 47.07.070; AS 47.07.071; AS 47.07.073; AS 47.07.074; AS 47.07.075; AS 47.07.080; AS 47.07.085.

Fiscal information (in thousands of dollars): The proposed regulation changes are not expected to require an increased appropriation.

The Department of Health, Office of Rate Review, keeps a list of individuals and organizations interested in its regulations. Those on the list will automatically be sent a copy of all the Department of Health, Office of Rate Review, notices of proposed regulation changes. To be added to or removed from the list, send a request to the Department of Health, Office of Rate Review at marcey.bish@alaska.gov , giving your name, and either your e-mail address or mailing address, as you prefer for receiving notices.

Individuals can also signup to receive automated notifications of all State of Alaska notices, including public notice for regulation changes, by subscribing to the Alaska Online Public Notices System: https://aws.state.ak.us/OnlinePublicNotices/Default.aspx.

DATE: July 20, 2023.

/s/Heidi Hedberg

Commissioner,

Department of Health

State of Alaska.