W. Va. Code R. § 65-26-14

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 65-26-14 - Compliance

14.1. Overcharging relative to approved inpatient rates. If a hospital's average charge per discharge for nongovernmental inpatients exceeds the average allowed amount, it is subject to reductions in its requested rates for unjustified overages. The hospital may justify the overcharge if it can demonstrate that there has been an increase in its Case Mix Index (CMI) or an increase in outliers.

14.1.a. Case Mix - A hospital"s average charge per nongovernmental inpatient discharge is based on its costs of providing the services to its patients. This cost is based on the resources used to provide the services as measured by its own case mix index. This index is determined by calculating the total amount of diagnosis related groups (DRG's) weights and dividing them by the total discharges to derive the weighted average value (the case mix). Justification for an overage in the approved nongovernmental inpatient charges can be determined by the percentage increase of the case mix index from one year to the next applied to the hospital's previous years' allowed rates.

14.1.b. Outliers - Justification for an overage in the approved nongovernmental inpatient charges may also be determined by outliers. For the initial year:

(1) outliers for hospitals with a weighted average CMI greater than 1.300 or with a Level I or Level II trauma center designation from the Office of Health Facility Licensure and Certification are defined as cases which have a charge exceeding $60,000.00;

(2) outliers for hospitals with a weighted CMI of 1.050 to 1.300 are defined as cases which have a charge exceeding $50,000.00; and

(3) outliers for hospitals with a weighted average CMI of less than 1.050 are defined as cases which have a charge exceeding $26,000.00. These amounts shall be adjusted annually by the DRI inflation factor designated by the Authority. For compliance purposes, the entire charge, rather than the excess charge over the designated threshold, constitutes the outlier amount.

14.2. Overcharging relative to approved outpatient rates - If a hospital's average charge per nongovernmental outpatient visit exceeds the average allowed amount, it is subject to reductions in its requested rates for unjustified overages. The hospital may justify the overage if it can demonstrate that there has been a change in the mix of outpatient services being provided.

14.2.a. A hospital submitting an application under this rule shall submit a budget estimate of high cost nongovernmental outpatient services. The estimate shall show the expected utilization and the expected revenue from each of the high cost services the hospital elects to use. When the hospital submits its application for the subsequent year, it shall provide the projected actual utilization and revenue from these same high cost services. If the hospital fails to provide the budget estimates, the hospital may not use the increase in services as justification for an overage the next year.

14.2.b. The hospital shall also consider and budget for an anticipated loss of high volume or low cost nongovernmental outpatient services that it may no longer be providing as the loss of these services could result in a significant increase in the average per visit charge. When the hospital submits its application for the subsequent year, it shall provide the projected loss of high volume or low cost nongovernmental outpatient services. If the hospital fails to provide the budget estimates, the hospital may not use the loss of these services as justification for an overage the next year.

14.3. Other reductions and penalties - The Authority may also reduce a hospital's requested rates for inpatient and outpatient services if the hospital is not in compliance with budgeted amounts for other items subject to review under the standard rate review process.

14.4. Penalties/reductions held in abeyance from prior years - The Authority may use penalties and reductions held in abeyance from prior years to reduce requested rates. If the application of the penalties and reductions by the Authority will cause undue financial hardship to the hospital, the entire amount may not be applied in one year. In those cases, the Authority may continue to hold these penalties and reductions in abeyance or apply them over several years.

W. Va. Code R. § 65-26-14