12 Va. Admin. Code § 30-160-10

Current through Register Vol. 41, No. 9, December 16, 2024

Section 12VAC30-160-10 - [Effective 1/1/2025] Hospital assessment

A. Authority. The Department of Medical Assistance Services (DMAS) is authorized to levy a health care coverage assessment and a health care provider payment rate assessment upon private acute care hospitals operating in Virginia in accordance with §§ 32.1-331.01 and 32.1-331.02 of the Code of Virginia and §§ 3-5.15, 3-5.16, and 4-14 as revised by the 2019 and subsequent Appropriation Acts.

B. Definitions. The following words and terms when used in this section shall have the following meanings unless otherwise stated:

"Coverage assessment amount" means the nonfederal share of the full cost of expanded Medicaid coverage times a multiplier determined by the General Assembly and published on the DMAS website at https://www.dmas.virginia.gov/for-providers/rates-and-rate-setting/. Effective July 1, 2021, the multiplier rate is 1.02.

"Coverage assessment percentage" means the coverage assessment amount divided by the total private acute care hospital net patient revenue.

"Covered hospital" means any in-state private acute care hospital other than a hospital classified as a public hospital, freestanding psychiatric and rehabilitation hospital, children's hospital, long-stay hospital, long-term acute care hospital, or critical access hospital.

"Full cost of expanded Medicaid coverage" means

(i) any and all Medicaid expenditures related to individuals eligible for Medicaid pursuant to 42 USC 1396d(y)(1) (2010) of the Patient Protection and Affordable Care Act, including any federal actions or repayments and

(ii) all administrative costs associated with providing coverage, which includes the costs of administering the provisions of the 1115 waiver, and collecting the coverage assessment.

"Managed care organization," "MCO," or "Medicaid MCO" means an entity that meets the participation and solvency criteria defined in 42 CFR Part 438 and has an executed contractual agreement with DMAS to provide services covered under a mandatory managed care program.

"Managed care organization hospital payment gap" means the difference between the amount included in the capitation rates for inpatient and outpatient services for the contract year based on historical paid claims and the amount that would be paid when the projected hospital services furnished by private acute care hospitals operating in Virginia are priced for the contract year equivalent to the maximum managed care directed payment amount allowed by the Centers for Medicare and Medicaid Services under 42 CFR 438.6(c). The managed care organization hospital payment gap shall be updated annually for each contract year.

"Managed care organization supplemental hospital capitation payment adjustment" means the additional amount added to Medicaid MCO capitation rates to pay the Medicaid managed care organization hospital payment gap to qualifying private acute care hospitals for services to Medicaid recipients.

"Net patient service revenue" means the amount each hospital reported in the most recent Virginia Health Information Hospital Detail Report excluding any nonhospital revenue that meets the requirements in subsection C of this section.

"Private acute care hospital" means acute care hospitals, excluding public hospitals, freestanding psychiatric and rehabilitation hospitals, children's hospitals, long-stay hospitals, long-term acute care hospitals, and critical access hospitals.

"Private acute care hospital enhanced payments" means payments made to (i) fund an increase in inpatient and outpatient payment rates paid to private acute care hospitals operating in Virginia up to the upper payment limit gap and (ii) fill the managed care organization hospital payment gap for care provided to recipients of medical assistance services.

"Upper payment limit" means the limit on payment for inpatient services for recipients of medical assistance established in accordance with 42 CFR 447.272 and on payment for outpatient services for recipients of medical assistance pursuant to 42 CFR 447.321 for private hospitals. This limit applies only to fee-for-service claims.

"Upper payment limit gap" means the difference between the amount of the private acute care hospital upper payment limits estimated for the State Plan rate year using the latest available cost report data and the amount estimated that would otherwise be paid for that same State Plan rate year pursuant to the State Plan for inpatient and outpatient services. The supplemental payment methodology from the Health Care Provider Payment Rate Fund to qualifying hospitals for inpatient services is described in 12VAC30-70-429 and for outpatient services is described in 12VAC30-80-20. The upper payment limit gap shall be updated annually for each State Plan rate year.

C. Nonhospital revenue that should be excluded from a hospital's net patient service revenue as reported to the Virginia Health Information (VHI) Hospital Detail Report must be reported to DMAS by April 1 of each year. The hospital's chief financial officer must certify any changes to the data reported to VHI.

D. Health care coverage assessment. Private acute care hospitals operating in Virginia shall make a provider coverage assessment payment beginning on or after October 1, 2018.

1. DMAS will calculate each hospital's coverage assessment payment by multiplying the coverage assessment percentage times each hospital's net patient service revenue.

2. The coverage assessment percentage is calculated quarterly by dividing (i) the coverage assessment amount by (ii) the total net patient service revenue for hospitals subject to the assessment. The coverage assessment amount used in the quarterly calculation of the coverage assessment percentage shall include a reconciliation of the Health Care Coverage Assessment Fund prescribed in subdivision D 4 of this section and subtract all prior quarterly coverage assessments paid for that fiscal year before dividing the remainder by the remaining quarters in the fiscal year.

3. DMAS shall, at a minimum, update the coverage assessment amount whenever the full cost of expanded Medicaid coverage is updated in subdivision D 4 of this section or when necessary to ensure the total coverage assessment amounts are sufficient to cover the full cost of expanded Medicaid coverage for the state fiscal year based on the latest estimate of the coverage assessment amount. Hospitals shall be given no less than a 15-day notice prior to the beginning of the quarter with associated calculations supporting the change in the hospital's coverage assessment amount and shall be provided with associated calculations. Prior to any change to the coverage assessment amount, DMAS shall perform and incorporate a reconciliation of the Health Care Coverage Assessment Fund through the most recent complete quarter. Any estimated excess or shortfall of revenue since the previous reconciliation shall be deducted from or added to the full cost of expanded Medicaid coverage for the updated coverage assessment amount.

4. The full cost of expanded Medicaid coverage shall be updated (i) on November 1 of each year based on the official Medicaid forecast and latest administrative cost estimates developed by DMAS; (ii) no more than 30 days after the enactment of any Appropriation Act to reflect policy changes adopted by the latest session of the General Assembly; and (iii) on March 1 of any year in which DMAS estimates that the most recent nonfederal share of the full cost of expanded Medicaid coverage multiplied by a multiplier determined by the General Assembly will be insufficient to pay all expenses for the full cost of expanded Medicaid coverage.

5. The coverage assessment shall be used only to cover the nonfederal share of the full cost of expanded Medicaid coverage.

6. Hospitals subject to the coverage assessment shall make quarterly payments to DMAS equal to 25% of the hospital's annual coverage assessment amount. The assessment payments are due not later than the first day of each quarter. In the first year, the first coverage assessment payment shall be due on or after October 1, 2018. Hospitals that fail to make the coverage assessment payments within 30 days of the due date shall incur a 5.0% penalty that shall be deposited into the Virginia Health Care Fund. Any unpaid coverage assessment or penalty will be considered a debt to the Commonwealth, and DMAS is authorized to recover it as such.

E. Health care provider payment rate assessment. Private acute care hospitals operating in Virginia shall pay a provider payment rate assessment beginning on or after October 1, 2018.

Proceeds from the provider payment rate assessment shall be disbursed to fund an increase in inpatient and outpatient payment rates paid to private acute care hospitals operating in Virginia up to the upper payment limit and the managed care organization hospital payment gap for care provided to recipients of Virginia medical assistance services.

1. DMAS will calculate each hospital's payment rate assessment by multiplying the payment rate assessment percentage times net patient service revenue.

2. The payment rate assessment percentage for covered hospitals will be calculated as the nonfederal share of funding of the private acute care hospital enhanced payments divided by the total net patient service revenue for qualifying hospitals.

3. DMAS is authorized to update the payment rate assessment amount on a quarterly basis to ensure amounts are sufficient to cover the full cost of the private acute care hospital enhanced payments for the calendar quarter based on the department's quarterly claims and encounter data. Hospitals shall be given no less than a 15-day prior notice of the new assessment amount and be provided with calculations. Prior to any change to the payment rate assessment amount, DMAS shall perform and incorporate a reconciliation of the Health Care Provider Payment Rate Assessment Fund. Any estimated excess or shortfall of revenue since the previous reconciliation shall be deducted from or added to the calculation of the private acute care hospital enhanced payments.

4. As part of the development of the managed care capitation rates, DMAS shall calculate a managed care organization supplemental hospital capitation payment adjustment. This is a distinct additional amount added to Medicaid MCO capitation rates to pay the managed care organization hospital payment gap as supplemental payments to covered private acute care hospitals operating in Virginia for services to Virginia Medicaid recipients.

5. The payment rate assessment payments are due not later than August 15, November 15, February 15, and May 15 of each state fiscal year. In the first year, the first payment rate assessment payment shall be due on or after October 1, 2018. Hospitals that fail to make the payment rate assessment payments on or before the due date shall incur a 5.0% penalty that shall be deposited into the Virginia Health Care Fund. Any unpaid payment rate assessment or penalty will be considered a debt to the Commonwealth, and DMAS is authorized to recover it as such.

F. Collection of the assessments. DMAS is responsible for collecting the assessments.

1. All revenue from the coverage assessment, excluding penalties shall be deposited into a special nonreverting fund to be known as the Health Care Coverage Assessment Fund pursuant to § 32.1-331.01 of the Code of Virginia. Proceeds from the Health Care Coverage Assessment Fund shall not be used for any other purpose than to cover the nonfederal share of the full cost of expanded Medicaid coverage.

2. All revenue from the provider payment rate assessment, excluding penalties, shall be deposited into a special nonreverting fund to be known as the Health Care Provider Payment Rate Assessment Fund pursuant to § 32.1-331.02 of the Code of Virginia. Proceeds from the Health Care Provider Payment Rate Assessment Fund shall not be used for any other purpose than to fund an increase in inpatient and outpatient payment rates paid to private acute care hospitals operating in Virginia up to the private hospital upper payment limit or managed care organization hospital payment gap for care provided to recipients of medical assistance services and the administrative costs of collecting the assessment and of implementing and operating the associated payment rate actions.

G. Appeal. A covered hospital may appeal a DMAS action that falls within the definition of agency action under the Virginia Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia), including DMAS's interpretation and application of assessment methodologies. The assessment methodologies cannot be appealed.

1. Appeals will be conducted in accordance with the provider appeal regulations (12VAC30-20-500 et seq.).

2. A covered hospital shall be considered a provider for purposes of the appeal procedures set forth in the provider appeal regulations.

12 Va. Admin. Code § 30-160-10

Derived from Virginia Register Volume 41, Issue 8, eff. 1/1/2025.

Statutory Authority: § 32.1-325 of the Code of Virginia; 42 USC § 1396 et seq.