Md. Code Regs. 10.37.10.04-3

Current through Register Vol. 51, No. 25, December 13, 2024

Section 10.37.10.04-3 - Global Budget Revenue Mechanism

A. For purposes of this regulation, the following definitions apply:

(1) "Annual update factor" means the amount by which total State hospital revenue may increase in a rate year.

(2) "Demographic adjustment" means the percentage increase in allowed revenue related to changes in population and the age/sex mix of the population residing in the hospital's primary service area, net of any reductions.

(3) "Factor cost inflation" means increases in the costs of goods, services, wages, and salaries experienced by the hospitals as calculated by the Commission for the most recent period for which data are available preceding the year for which the Commission calculates case target updates.

(4) "Hospital update" means the amount by which an individual hospital's approved GBR revenue changes in a particular rate year (i.e., July 1 -June 30).

(5) "Market shift adjustment" means the rate adjustment applied by the Commission, which increases or decreases the approved GBR revenue of a hospital to reflect changes in volume at the hospital for which there was a corresponding change in volume at another Maryland hospital or other provider.

B. Annual Update Factor.

(1) On or before July 1 of each year, the Commission shall establish an annual update factor for the purpose of adjusting the GBR revenue of each individual hospital. The annual update factor shall be designed to reflect projected factor cost inflation, an allowance for certain volume adjustments, productivity adjustments, the revenue constraints included in the All-Payer Model Agreement and other relevant factors, demographic adjustments, market shift adjustments, and other appropriate adjustments.

(2) If after approving an update factor for a given year, a hospital or hospitals collectively exceed their approved revenue, the annual update factor may be reduced in future years to recoup the excess revenue growth. Similarly, if a Maryland hospital or hospitals collectively fall below their approved revenue for a given year, the annual update factor may be adjusted accordingly in future years.

(3) If Maryland hospitals accrue a national growth reduction for 2 consecutive years, in the following year the annual update factor shall be reduced by the first of the 2-year national growth reduction. Except as provided in §D of this regulation, the annual update may not be less than 1 percent.

C. The technical provisions of the methodology used to convert the annual update factor into the hospital update for the next rate year shall be fully described and publicly disseminated on or before July 1 of each year, allowing sufficient time for comment and implementation.

D. Corrective Action. If, at any time, the Commission estimates that the financial constraints or other terms imposed by the All-Payer Model Agreement are at risk of being violated (based on modelling using the CMS actuary's most recent projections and Health Services Cost Review Commission analysis of Medicare payments data), the Commission may take immediate and appropriate corrective action as it deems necessary and proper to meet the Medicare savings requirements and limits on growth in Medicare payments and prevent any further deterioration in compliance with the Model Agreement. The Commission shall provide sufficient notice and opportunity for comment before taking corrective action. This comment opportunity does not constitute a contested case within the meaning of the Administrative Procedure Act.

E. The provisions of this regulation apply to all Maryland's general acute care hospitals from July 1, 2014, and thereafter.

F. Compliance and Penalties. GBR compliance shall be monitored during the agreement period. Penalties shall be assessed prospectively at the beginning of the next period. Penalties shall be based on the corridors specified in the GBR Agreement.

Md. Code Regs. 10.37.10.04-3

Regulation .04-3 adopted effective November 13, 2000 (27:22 Md. R. 2060)
Regulation .04-3 amended effective April 30, 2001 (28:8 Md. R. 760); amended effective 45:1 Md. R. 14, eff. 1/15/2018