907 KAR 1:015. Payments for hospital outpatient services.

907 KAR 1:015. Payments for hospital outpatient services.

RELATES TO: KRS 205.520, 42 C.F.R. 440.2, 440.20(a)

STATUTORY AUTHORITY: KRS 194A.030(2), 194A.050(1), 205.520(3), 205.560, 205.637, 42 U.S.C. 1396a, 1396b, 1396d, EO 2004-726

NECESSITY, FUNCTION, AND CONFORMITY: EO 2004-726, effective July 9, 2004, reorganized the Cabinet for Health Services and placed the Department for Medicaid Services and the Medicaid Program under the Cabinet for Health and Family Services. The Cabinet for Health and Family Services, Department for Medicaid Services, has the responsibility to administer the Medicaid Program. KRS 205.520(3) authorizes the cabinet, by administrative regulation, to comply with any requirement that may be imposed, or opportunity presented, by federal law for the provision of medical assistance to Kentucky's indigent citizenry. This administrative regulation establishes the method for determining amounts payable by the Medicaid Program for hospital outpatient services.

Section 1. Definitions. (1) "Critical access hospital" or "CAH" means a hospital meeting the licensure requirements established in 906 KAR 1:110.

(2) "Current procedural terminology code" or "CPT code" means a code used for the reporting of medical services or procedures using the current procedural terminology developed by the American Medical Association.

(3) "Department" means the Department for Medicaid Services or its designee.

(4) "Healthcare common procedure coding system" or "HCPCS" means a collection of codes acknowledged by the Centers for Medicare and Medicaid Services that represent procedures.

(5) "Level 1 service" means services billed using CPT code 99281.

(6) "Level 2 service" means services billed using CPT codes 99282 or 99283.

(7) "Level 3 service" means services billed using CPT codes 99284, 99285, 99291, or 99292.

(8) "Outpatient cost-to-charge ratio" means the ratio determined by dividing the costs reported on Supplemental Worksheet E-3, Part III, Page 12 column 3, line 27 of the cost report by the charges reported on column 3, line 20 of the same schedule.

(9) "Revenue code" means a provider-assigned revenue code for each cost center for which a separate charge is billed.

(10) "Triage" means a medical screening and assessment billed using revenue code 451.

Section 2. Outpatient Hospital Services. (1) Except for a critical access hospital, for services provided on or after August 4, 2003, the Department for Medicaid Services shall reimburse a participating in-state hospital for outpatient services in accordance with this subsection.

(a) For the following procedures, the rates shall be as follows:

1. Cardiac catheterization lab:

a. Unilateral - $1,478; or

b. Bilateral - $1,770;

2. Computed tomography scan - $479;

3. Lithotripsy - $3,737;

4. Magnetic resonance imaging - $593;

5. Observation room - $458; and

6. Ultrasound - $177.

(b) If multiple services listed in paragraph (a) of this subsection are provided, each service shall receive the corresponding rate established in paragraph (a) of this subsection.

(c) The department shall utilize the 1996 Medicare ambulatory surgical center groups to reimburse for an outpatient surgery. The following chart establishes the reimbursement rate for each corresponding surgical group:

Ambulatory Surgical Center Group	Reimbursement Rate
Group 1	$397
Group 2	$534
Group 3	$610
Group 4	$753
Group 5	$858
Group 6	$1,016
Group 7	$1,191
Group 8	$1,191

(d) Reimbursement for an outpatient surgery which does not have a surgical group rate shall be at a facility-specific outpatient cost-to-charge ratio.

(e) For multiple surgeries provided to the same recipient on the same day, only the surgery with the highest reimbursement rate established in paragraph (c) of this subsection, shall be paid.

(f) Except for the services listed in paragraph (g) of this subsection, all other services provided to the same recipient on the same day shall be reimbursed in accordance with paragraphs (a), (b), (c), (d), and (e) of this subsection.

(g) The following shall be reimbursed on an interim basis at a facility-specific outpatient cost-to-charge ratio for the following revenue codes:

Service	Revenue Code
Pharmacy	250, 251, 252, 254, 255, 258, 260, 261, 634, 635, 636
X-ray	320, 321, 322, 323, 324, 342, 400, 403, 920
Supplies	270, 271, 272, 274, 275, 621, 622, 623
EKG/ECG and Therapeutic Services	410, 412, 413, 420, 421, 422, 423, 424, 440, 441, 442, 443, 460, 470, 471, 472, 480, 482, 510, 512, 516, 517, 730, 731, 732, 740, 901, 922, 940, 942, 943
Room and Miscellaneous	280, 290, 370, 371, 372, 374, 700, 710, 750, 761, 890, 891, 892, 893, 921
Dialysis	821, 831, 841
Chemotherapy	330, 331, 332, 333, 334, 335

(h) Services reimbursed in accordance with paragraph (g) of this subsection shall be settled to cost at year end.

(2) Except for pharmacy services billed using revenue codes 250, 251, 252, 254, 255, 258, 260, 261, 634, 634, or 636, medical or surgical supplies billed using revenue codes 270-275, and triage billed using revenue code 451, a hospital shall include all applicable CPT and HCPCS codes on a claim.

(3) Except for services listed in subsection (1)(g) of this section, beginning August 4, 2003, an out-of-state hospital providing outpatient services shall be reimbursed in accordance with subsection (1) of this section.

(4) Services listed in subsection (1)(g) of this section provided by an out-of-state hospital shall be reimbursed by multiplying the average outpatient cost-to-charge ratio of in-state hospitals, excluding critical access hospitals, by billed charges.

(5)(a) An outpatient hospital laboratory service shall be reimbursed at the Medicare-established technical component rate in accordance with 907 KAR 1:029.

(b) An outpatient hospital laboratory service with no established Medicare rate shall be reimbursed by multiplying a facility-specific outpatient cost-to-charge ratio by billed charges.

(6) A critical access hospital shall be reimbursed on an interim basis:

(a) By multiplying charges by the lesser of:

1. The Medicare cost-to-charge ratio issued by the Medicare fiscal intermediary in effect at the time; or

2. The Medicaid outpatient cost-to-charge ratio;

(b) For a laboratory service in accordance with the Medicare fee schedule; and

(7) A hospital providing outpatient services shall be required to submit a cost report within five (5) months after a hospital's fiscal year end.

(8) Failure to provide a cost report within the timeframe established in subsection (7) of this section shall result in a suspension of future payment until the cost report is received by the department.

(9) If a cost report indicates payment is due, a provider shall remit payment in full or a request for a payment plan with the cost report.

(10) If a cost report indicates a payment is due and a hospital fails to remit a payment or request for a payment plan, the department shall suspend future payment to the hospital.

(11) An estimated payment shall not be considered payment-in-full until a final determination of cost has been made by the department.

(12) If it is determined that an additional payment is due after a final determination of cost has been made by the department, the additional payment shall be due sixty (60) days after notification.

(13) If a hospital fails to submit an additional payment in accordance with subsection (12) of this section, the department shall suspend future payment to the hospital.

Section 3. Supplemental Payments. (1) In addition to a payment received in accordance with Section 2 of this administrative regulation, a nonstate government hospital, as defined in 42 C.F.R. 447.321(2), whose county has entered into an intergovernmental agreement with the Commonwealth shall receive a quarterly supplemental payment in an amount equal to the difference between the payments made in accordance with Sections 2 and 4 of this administrative regulation and the maximum amount allowable under 42 C.F.R. 447.321.

(2) A payment made under this section shall:

(a) Not be subject to the cost-settlement provisions established in Section 2 of this administrative regulation; and

(b) Apply to a service provided on or after April 2, 2001.

Section 4. In-state and Out-of-state Emergency Room Services. (1) Services provided in an emergency room shall be reimbursed as follows:

(a) The triage service reimbursement rate shall be twenty (20) dollars;

(b) The level 1 service reimbursement rate shall be eighty-two (82) dollars;

(d) The level 3 service reimbursement rate shall be $264.

(2) In addition to the rate paid for services listed in subsection (1) of this section, the following shall be paid at the following rates:

(a) Cardiac catheterization lab:

1. Unilateral - $1,478; or

2. Bilateral - $1,770;

(b) Computed tomography scan - $479;

(d) Magnetic resonance imaging - $593;

(e) Observation room - $458; and

(f) Ultrasound - $177.

(3) If multiple services listed in subsection (2) of this section are provided, each service shall receive the corresponding rate established in subsection (2) of this section.

(4) Except as listed in subsection (5) of this section, a separate payment shall not be made for the services or supplies listed in Section 2(1)(g) of this administrative regulation.

(5) A thrombolytic agent shall be reimbursed at the hospital’s acquisition cost.

(6) A service provided in an emergency room of a critical access hospital shall be reimbursed in accordance with Section 2(6) of this administrative regulation.

Section 5. Appeals. A hospital may appeal a decision as permitted by 907 KAR 1:671.

Section 6. Incorporation by Reference. (1) "Supplemental Worksheet E-3, Part III, Page 12, November 1992 edition" is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department for Medicaid Services, 275 East Main Street, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. (Recodified from 904 KAR 1:015, 5-6-86; Am. 15 Ky.R. 674; eff. 9-21-88; 17 Ky.R. 558; 1523; 1944; eff. 12-7-90; 28 Ky.R. 943; 1404; eff. 12-19-2001; 2274; 2592; eff. 6-14-02; 30 Ky.R. 725; 1525; eff. 1-5-04.)