DAR File No. 28414

Health, Health Care Financing, Coverage and Reimbursement Policy

R414-3A

Outpatient Hospital Services

NOTICE OF PROPOSED RULE

DAR File No.: 28414
Filed: 12/15/2005, 09:23
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rulemaking is necessary to clarify outpatient hospital services policy and to implement it into rule pursuant to recent legislation (H.B. 126 (2003)) found in Subsection 26-18-3(2)(a). (DAR NOTE: H.B. 126 (2003) is found at UT L 2003 Ch 324, and was effective 05/05/2003.)

Summary of the rule or change:

This new rule contains substantive provisions not contained in the old rule. For example, it removes from the definition of "Other Practitioner of the Healing Arts," the term "doctor of osteopathy," contains specific client eligibility requirements, lists service coverage for sleep studies, hyperbaric oxygen therapy, and lithotripsy, and includes provisions and methodology for reimbursement. Conversely, the old rule lists the contractors that are assigned to provide outpatient psychiatric services within the prepaid mental health plan, while the new rule does not specifically list this information.

State statutory or constitutional authorization for this rule:

Sections 26-1-5 and 26-18-3, and 42 CFR 440.20

Anticipated cost or savings to:

the state budget:

There is no impact to the state budget associated with this rulemaking because the policy for outpatient hospital services is only clarified and implemented in rule pursuant to recent legislation found in Subsection 26-18-3(2)(a).

local governments:

There is no budget impact to local governments as a result of this rulemaking because the policy for outpatient hospital services is only clarified and implemented in rule pursuant to recent legislation found in Subsection 26-18-3(2)(a).

other persons:

There is no budget impact to other persons as a result of this rulemaking because the policy for outpatient hospital services is only clarified and implemented in rule pursuant to recent legislation found in Subsection 26-18-3(2)(a).

Compliance costs for affected persons:

There are no compliance costs because the policy for outpatient hospital services is only clarified and implemented in rule pursuant to recent legislation found in Subsection 26-18-3(2)(a).

Comments by the department head on the fiscal impact the rule may have on businesses:

This rulemaking, if adopted after public comment, will not change reimbursement to providers in the Medicaid program. It should not have a negative fiscal impact on any regulated business. David N. Sundwall, MD, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at cdevashrayee@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

01/31/2006

This rule may become effective on:

02/01/2006

Authorized by:

David N. Sundwall, Executive Director

RULE TEXT

R414. Health, Health Care Financing, Coverage and Reimbursement Policy.

R414-3A. Outpatient Hospital Services.

[R414-3A-100. Authority and Purpose.

(1) This rule defines the scope of outpatient hospital services available to Medicaid clients.

(2) Outpatient hospital services are required under Section 1901 et seq. and Section 1905(a)(2) of the Social Security Act, and by 42 CFR 440.20 (October 1, 1991, edition).

(3) This rule is authorized by Sections 26-1-5, 26-1-15, and 26-18-6, and by Subsections 26-18-3(2) and 26-18-5(3) and (4).

R414-3A-200. Definitions.

(1) Terms used in this rule are defined in R414-1-1.

(2) In addition:

(a) "CHEC" stands for Childhood Health Evaluation and Care, which is the Utah-specific term for the federally mandated program of early and periodic screening, diagnosis, and treatment for children under the age of 21;

(b) "covered Medicaid service" means a service available to the eligible Medicaid client within the constraints of Medicaid policy and criteria for approval of the service;

(c) "Emergency Services Only Program" refers to a health program designed to cover a specific range of emergency services;

(d) "EPSDT" stands for Early and Periodic Screening, Diagnosis, and Treatment, which is a federal program applicable to children under age 21;

(e) "other practitioner of the healing arts" means a doctor of osteopathy, doctor of dental surgery or dental medicine, or doctor of podiatric medicine;

(f) "outpatient" means an individual who is receiving professional services at a hospital, or distinct part of a hospital, that is not providing professional services and room and board on a continuous 24-hour-a-day basis;

(g) "outpatient hospital" or "hospital" means a facility that:

(i) is in, or physically connected to, a hospital licensed by the department as a general hospital, as defined by Section 26-21-2(8), and meets the standards set forth in R432-100 and 42 CFR Part 482 (October 1, 1991, edition);

(ii) meets the requirements for participation in the Medicare program; and

(iii) has a current provider agreement with the department;

(h) "personal supervision" means critical observation and guidance by a physician of a nonphysician's activities within the nonphysician's licensed scope of service;

(i) "prior authorization" means the degree of Medicaid agency approval for payment of services that a provider is required to obtain before providing services;

(j) "take-home supplies" means any medical supplies or equipment to be utilized by the patient at home for follow-up care.

R414-3A-300. Program Access Requirements.

(1) Outpatient hospital services may be provided only to a client who is under the care of a physician or other practitioner of the healing arts.

(2) Outpatient hospital services and supplies must be furnished:

(a) in a hospital;

(b) by hospital personnel;

(c) under hospital medical staff supervision; and

(d) according to the written orders of a physician or other practitioner of the healing arts.

(3) All outpatient hospital services are subject to review by the department.

(4) Outpatient hospital psychiatric services are covered Medicaid services for clients who live in the counties identified in Table 1 only when such services are coordinated through the contractor identified for the specified county:

TABLE 1

I.    Counties:    Salt Lake County

                   Summit County

      Contractor:  Salt Lake Valley Mental Health,

                   Salt Lake City, Utah

II.   Counties:    Carbon County

                   Emery County

                   Grand County

      Contractor:  Four Corners Community Mental Health Center,

                   Price, Utah

III.  Counties:    Beaver County

                   Garfield County

                   Kane County

                   Iron County

                   Washington County

      Contractor:  Southwest Utah Mental Health Center,

                   St. George, Utah

R414-3A-400. Services.

(1) Outpatient hospital services encompass medically necessary diagnostic and therapeutic services or supplies that are ordered by a physician or other practitioner of the healing arts and appropriate for the adequate diagnosis or treatment of a client's illness.

(2) Outpatient hospital services include:

(a) the service of nurses or other personnel necessary to complete the service and provide patient care during the provision of service;

(b) the use of hospital facilities, equipment, and supplies; and

(c) the technical portion of clinical laboratory and radiology services.

(3) Services associated with pregnancy, labor, and delivery are covered Medicaid services.

(4) Cosmetic, reconstructive, or plastic surgery is limited to:

(a) correction of a congenital anomaly;

(b) restoration of body form following an accidental injury; or

(c) revision of severe disfiguring and extensive scars resulting from neoplastic surgery.

(5) Abortion procedures are limited to those certified as medically necessary, approved by division consultants, and determined to meet the requirements of Section 26-18-4 and 42 CFR 441.203 (October 1, 1991, edition), which is incorporated by reference.

(6) Sterilization procedures are limited to those that meet the requirements of 42 CFR 441, Subpart F (October 1, 1991, edition), which is incorporated by reference.

(7) Outpatient hospital psychiatric services are limited to services provided in an outpatient unit of a hospital that is licensed or approved for psychiatric care.

(8) Nonphysician psychosocial counseling services shall be provided only by a licensed psychologist; and are limited to psychosocial evaluations for:

(a) mentally retarded persons;

(b) cases identified through a CHEC/EPSDT screening; or

(c) victims of sexual abuse.

(9) Occupational therapy is limited to cases identified and approved through a CHEC/EPSDT screening.

R414-3A-500. Limitations.

(1) Outpatient hospital services are limited to services accepted by the department as medically necessary and appropriate services and may exclude some unique services established by hospitals as outpatient services as set forth on the department prior approval list.

(2) Treatment of syndromes or disorders for which no specific therapies have been identified except for therapies that border on behavior modification or experimental or unproven practices, or for which medical necessity, appropriate utilization, and cost effectiveness cannot be assured, are not dovered Medicaid services. The treatments are:

(a) treatment of sleep apnea, or sleep studies, or both;

(b) pain clinic services;

(c) treatment of eating disorders.

(3) Miscellaneous supplies, dressings, and durable medical equipment are not covered take-home supplies.

(4) Outpatient prescriptions are not a covered Medicaid benefit for a patient with the designation "Emergency Services Only Program" printed on his Medical Identification Card.

(5) Cosmetic, reconstructive, and plastic surgery procedures other than those specified in R414-3A-400(4) are excluded from coverage, including all related services, supplies, and any institutional costs.

R414-3A-600. Prior Authorization.

(1) Selected medical and surgical procedures, documented in the Division of Health Care Financing Medical and Surgical Procedures Prior Authorization List, April 1, 1992, which is incorporated by reference and maintained in the Outpatient Hospital Provider Manual, require prior authorization. Some procedures on this list are also limited to place of service. This list defines the prior authorization requirements for specific procedures referenced in Subsections R414-3A-600(2), (3), and (4), and is updated yearly in accordance with the federally mandated Health Common Procedure Coding System (HCPCS) update and in accordance with R414-26. Other related documentation determined by the department to be necessary to determining the appropriateness and medical necessity of proposed services may be requested.

(2) Sterilization procedures require prior authorization and consent.

(3) Abortion procedures require prior authorization and consent.

(4) Outpatient hospital psychiatric services require prior authorization after the first 12 sessions per calendar year.

R414-3A-800. Co-payment Policy.

This rule establishes Medicaid co-payment policy for outpatient hospital services for Medicaid clients who are not in any of the federal categories exempted from co-payment requirements. The rule is authorized by 42 CFR 447.15 and 447.50, Oct. 1, 2000 ed., which are adopted and incorporated by reference.

(1) The Department shall impose a co-payment in the amount of $2 for each outpatient visit when a non-exempt Medicaid client, as designated on his Medicaid card, receives that outpatient service. The Department shall limit the out-of-pocket expense of the Medicaid client to $100 annually. (Co-payments for pharmacy services will continue to be limited to $5.00 per month.)

(2) The Department shall deduct $2 from the reimbursement paid to the provider for each outpatient visit, up to the $100 annually for each client.

(3) The provider should collect the co-payment amount from the Medicaid client for each outpatient visit, limited to one per day.

(4) Medicaid clients in the following categories are exempt from co-payment requirements:

(a) children;

(b) pregnant women;

(c) institutionalized individuals;

(d) individuals whose total gross income, before exclusions or deductions, is below the Temporary Assistance to Needy Families (TANF) standard payment allowance. These individuals must indicate their income status to their eligibility case worker on a monthly basis to maintain their exemption from the co-payment requirements.

(5) Outpatient services for family planning purposes are exempt from the co-payment requirements.]

R414-3A-1. Introduction and Authority.

This rule defines the scope of outpatient hospital services available to Medicaid clients for the treatment of disorders other than mental disease. This rule is authorized under Utah Code 26-18-3 and governs the services allowed under 42 CFR 440.20.

R414-3A-2. Definitions.

(1) "Allowed charges" mean actual charges submitted by the provider less any charges for non-covered services.

(2) "CHEC" means Child Health Evaluation and Care and is the Utah specific term for the federally mandated program of Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) for children under the age of 21.

(3) "Clinical Laboratory Improvements Act" (CLIA) is the Centers for Medicare and Medicaid Services (CMS) program that limits reimbursement for laboratory services based on the equipment and capability of the physician or laboratory to provide an appropriate, competent level of laboratory service.

(4) "Hyperbaric Oxygen Therapy" is therapy that places the patient in an enclosed pressure chamber for medical treatment.

(5) "Other Practitioner of the Healing Arts" means a doctor of dental surgery or a podiatrist.

(6) "Outpatient" means professional services provided for less than a 24-hour period regardless of the hour of admission, whether or not a bed is used, or whether or not the patient remains in the facility past midnight.

(7) "Prepaid Mental Health Plan" means the prepaid, capitated program through which the Department pays contracted community mental health centers to provide all needed inpatient and outpatient mental health services to residents of the community mental health center's catchment area who are enrolled in the plan.

R414-3A-3. Client Eligibility Requirements.

Outpatient hospital services are available to categorically and medically needy individuals who are under the care of a physician or other practitioner of the healing arts.

R414-3A-4. Program Access Requrements.

(1) The Department reimburses for outpatient hospital services and supplies only if they are:

(a) furnished in a hospital;

(b) provided by hospital personnel by or under the direction of a physician or dentist;

(c) provided as evaluation and management of illness or injury under hospital medical staff supervision and according to the written orders of a physician or dentist.

(2) All outpatient hospital services are subject to review by the Department.

R414-3A-5. Prepaid Mental Health Plan.

A Medicaid client residing in a county for which a prepaid mental health contractor provides mental health services must obtain authorization for outpatient psychiatric services from the prepaid mental health contractor for the client's county of residence.

R414-3A-6. Services.

(1) Services appropriate in the outpatient hospital setting for adequate diagnosis and treatment of a client's illness are limited to less than 24 hours and encompass medically necessary diagnostic, therapeutic, rehabilitative, or palliative medical services and supplies ordered by a physician or other practitioner of the healing arts.

(2) Outpatient hospital services include:

(a) the service of nurses or other personnel necessary to complete the service and provide patient care during the provision of service;

(b) the use of hospital facilities, equipment, and supplies; and

(c) the technical portion of clinical laboratory and radiology services.

(3) Laboratory services are limited to tests identified by the Centers for Medicare and Medicaid Services (CMS) where the individual laboratory is CLIA certified to provide, bill and receive Medicaid payment.

(4) Cosmetic, reconstructive, or plastic surgery is limited to:

(a) correction of a congenital anomaly;

(b) restoration of body form following an injury; or

(c) revision of severe disfiguring and extensive scars resulting from neoplastic surgery.

(5) Abortion procedures are limited to procedures certified as medically necessary, cleared by review of the medical record, approved by division consultants, and determined to meet the requirements of Utah Code 26-18-4 and 42 CFR 441.203.

(6) Sterilization procedures are limited to those that meet the requirements of 42 CFR 441, Subpart F.

(7) Nonphysician psychosocial counseling services are limited to evaluations and may be provided only through a prepaid mental health plan by a licensed clinical psychologist for:

(a) mentally retarded persons;

(b) cases identified through a CHEC/EPSDT screening; or

(c) victims of sexual abuse.

(8) Outpatient individualized observation of a mental health patient to prevent the patient from harming himself or others is not covered.

(9) Sleep studies are only available in a sleep laboratory approved by the Board of Polysomnography Technologists. The laboratory must be staffed with at least one sleep medicine physician and one registered polysomnography technologist. The physician must be certified by the American Academy of Sleep Medicine. The polysomnography technologist must be registered through the Board of Polysomnography Technologists.

(10) Hyperbaric Oxygen Therapy is limited to service in a hospital facility in which the hyberbaric unit has been accredited or approved by the Undersea and Hyperbaric Medical Society.

(11) Lithotripsy is covered by an all-inclusive fixed fee. This payment covers all hospital and ambulatory surgery-related services for lithotripsy on the same kidney for 90 days, including repeat treatments. Lithotripsy for treatment of the other kidney is a separate service.

(12) Reimbursement for services in the emergency department is limited to codes and diagnoses that are medically necessary emergency services as described in the provider manual. The diagnosis reflecting the primary reason for emergency services must be used and must be one of the first five diagnoses listed on the claim form.

(13) Take home supplies and durable medical equipment are not reimbursable.

(14) Prescriptions are not a covered Medicaid service for a client with the designation "Emergency Services Only Program" printed on the Medicaid Identification Card.

R414-3A-7. Prior Authorization.

Prior authorization must be obtained on certain medical and surgical procedures in accordance with R414-1-14.

R414-3A-8. Copayment Policy.

Each Medicaid client is responsible for a copayment as established in the Utah State Medicaid Plan and incorporated by reference in R414-1.

R414-3A-9. Reimbursement for Services.

(1) Except for emergency room, lithotripsy, laboratory and radiology services, the payment level for outpatient hospital claims is based on 77% of allowed charges for urban hospitals and 93% of allowed charges for rural hospitals.

(2) Payments for emergency room services vary depending on urban and rural designation and whether the service is designed as "emergency" or "non-emergency." The "emergency" designation is based on the principal diagnosis according to ICD-9 Code. Rural hospitals receive 98% of charges for emergency services and 65% for non-emergency use of the emergency room. Urban hospitals receive 98% of charges for emergencies and 40% of charges for non-emergency use of the emergency room.

(3) Payment for laboratory and radiology services provided in a hospital to outpatients is based on HCPCS codes and an established fee schedule, unless a lesser amount is billed. The fee schedule used to pay physicians is used to establish payment rates.

(4) Billed charges shall not exceed the usual and customary charge to private pay patients.

(5) Payments for all outpatient services are limited to the aggregate annual amount Medicare would pay for the same services as required by 42 CFR 447.321.

KEY: [m]Medicaid

[November 1, 2001]2006

Notice of Continuation November 26, 2002

26-1-5

[26-1-15

]26-18-2.3

26-18-3(2)

[26-18-5(3)

26-18-5(4)

26-18-6

]26-18-4

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at cdevashrayee@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.