[36 Pa.B. 2913]
[Saturday, June 10, 2006]
[Continued from previous Web Page]
* * * * * Audited Medicare cost report--The Medicare cost report, settled by the Medicare fiscal intermediary through the conduct of either a field audit or desk review resulting in the issuance of the Notice of Program Reimbursement, or a successive mechanism used by Medicare to determine program reimbursement costs or rates.
* * * * * Bureau code--The numeric identifier that the Bureau may assign to each insurer, self-insurer or third-party administrator authorized to provide services in this Commonwealth.
Burn facility--A facility [which] that meets the service standards of the American Burn Association.
CCO--Coordinated Care Organization--An organization certified [under Act 44] by the Secretary [of Health for the purpose of providing] to provide medical services to injured [employes] employees.
* * * * * CMS--The Centers for Medicare and Medicaid Services, formerly referred to as the HCFA.
* * * * * Capital related cost--The [health care] provider's expense related to depreciation, interest, insurance and property taxes on fixed assets and moveable equipment.
Charge master--A [provider's listing of current charges] listing of cost-based reimbursable providers' rates of reimbursement for procedures and supplies utilized in the provider's billing [process] processes.
* * * * * Concurrent review--Utilization review of treatment rendered to an employee conducted during the course of the treatment.
Correct coding initiative--The National Correct Coding Initiative developed and published by or on behalf of CMS to promote National coding methodologies.
DME--Durable medical equipment--[The term includes iron lungs, oxygen tents, hospital beds and wheelchairs (which may include a power-operated vehicle that may be appropriately used as wheelchair) used in the patient's home or in an institution, whether furnished on a rental basis or purchased.] Equipment that can withstand repeated use and is primarily and customarily used to serve a medical purpose and that provides therapeutic benefit, or enables injured employees to perform certain tasks that they are unable to undertake otherwise due to their medical conditions or illnesses.
* * * * * Downcode--Altering or amending the HCPCS, CPT, DRG, ICD or other code that a provider utilized to seek payment for a particular treatment, service or accommodation.
EOR--Explanation of reimbursement--A document, in a format prescribed by the Department, that explains an insurer's decision to pay, downcode or deny payment of a medical bill or bills.
* * * * * HCFA--The Health Care Financing Administration or the CMS.
* * * * * Health care provider--A person, corporation, facility or institution licensed, or otherwise authorized[,] by the Commonwealth to provide health care services, including physicians, [coordinated care organizations] CCOs, hospitals, health care facilities, dentists, nurses, optometrists, podiatrists, physical therapists, psychologists, chiropractors[,] or pharmacists, and officers, [employes] employees or agents of the person acting in the course and scope of employment or agency related to health care services.
* * * * * ICD[-9-CM (ICD--9)]--The International Classification of Diseases[--], identified by its edition and modification (that is, ICD-9-CM = Ninth Edition--Clinical Modification).
* * * * * Insurer--A workers' compensation insurance carrier, including the State [Workmen's] Workers' Insurance Fund, an employer who is authorized by the Department to self-insure its workers' compensation liability under section 305 of the act (77 P. S. § 501), or a group of employers authorized by the Department to act as a self-insurance fund under section 802 of the act (77 P. S. § 1036.2).
Interim rate notification--[The letter,] Correspondence from the HCFA, CMS, Medicare or a Medicare intermediary to [the] a provider[, informing] that informs the provider of [their] its interim payment rate and [its] effective date.
* * * * * Medical records--Written information that accurately, legibly and completely reflects the evaluation and treatment of the patient. Correspondence with individuals or entities not involved in evaluating and treating the patient, such as legal counsel, payer representatives or case-management personnel not actually providing patient care, are not medical records under this chapter.
Medical reports--Documentation that providers are required to submit to insurers under section 306 (f.1)(6) of the act (77 P. S. § 531(2)) and § 127.203 (relating to medical bills, submission of medical documentation), that includes information regarding an injured employee's medical history, diagnosis, treatment and services rendered, and medical records documenting billed treatment.
Medical Report Form--The form designated by the Department under section 306(f.1)(6) of the act and § 127.203.
Medicare carrier--An organization with a contractual relationship with [HCFA] CMS to process Medicare Part B claims.
Medicare intermediary--An organization with a contractual relationship with [HCFA] CMS to process Medicare Part A or Part B claims.
* * * * * New provider--A provider [which] that began administering patient care after receiving initial licensure on or after August 31, 1993.
Notice of [biweekly] payment rates--[The letter of notification] A notice from the Medicare intermediary to the provider, informing the provider of [their biweekly] its payment rate for direct medical education and paramedical education costs.
Notice of per resident amount--[The letter of notification] A notice from the Medicare intermediary to the provider, informing the provider of [the] its annual payment amount per resident or intern full-time equivalent.
Notification of disputed treatment--An EOR, a written denial of payment, or a Utilization Review Determination Face Sheet.
* * * * * Precertification--Prospective review, sought by an employee or provider, to determine whether future treatment is reasonable and necessary.
* * * * * Provider under review--A provider that, within the context of a particular UR or Peer Review request, provides or orders the health care services for which utilization or peer review is requested. When treatment is provided or ordered by a provider whose activities are subject to direction or supervision by another provider, the directing or supervising provider shall be the provider under review.
Prospective review--UR of proposed treatment that is conducted before the treatment is provided.
* * * * * Recertification--UR of prospective treatment previously determined to be reasonable and necessary, that may certify that the treatment will continue to be reasonable and necessary for a fixed period of time.
Redetermination--UR of prospective treatment previously determined to be unreasonable and unnecessary.
Retrospective review--UR of treatment that was already provided to an employee.
* * * * * Service code--The code assigned to each provider's individual treatment, service or accommodation as contained in the charge master maintained by the Bureau.
Service descriptor--The written description of each provider's individual treatment, service or accommodation as contained in the charge master maintained by the Bureau.
Specialty--Certification by a specialty board recognized by the American Board of Medical Specialties or the American Osteopathic Associations' Bureau of Osteopathic Specialists.
* * * * * Statewide average weekly wage--The amount determined annually by the Department, under section 105.1 of the act (77 P. S. § 25.1) for each calendar year on the basis of employment covered by the Pennsylvania Unemployment Compensation Law (43 P. S. §§ 751--914) for the 12-month period ending June 30 preceding the calendar year.
[Transition fee schedule--The Medicare payment amounts as determined by the Medicare carrier, based on the transition rules requiring a blend of the full fee schedule (full implementation of the Resource Based Relative Value Scale, RBRVS) and the original provider fee schedule.]
* * * * * Treatment--The management and care of a patient for the purpose of combating disease or disorder.
* * * * * Usual and customary charge--The charge most often made by providers of similar training, experience and licensure for a specific treatment, accommodation, product or service in the geographic area where the treatment, accommodation, product or service is provided, as evidenced by a database published or referenced by the Department in the Pennsylvania Bulletin.
Workers' [Compensation] compensation judge--As defined by section 401 of the act (77 P. S. § 701) [(definition of ''referee'')] and as appointed by the Secretary.
Subchapter B. MEDICAL FEES AND FEE REVIEW CALCULATIONS § 127.101. Medical fee caps--[Medicare] general provisions and initial rates for treatment rendered before January 1, 1995.
(a) Generally, medical fees for services rendered under the act [shall] will be capped at 113% of the Medicare reimbursement rate applicable in this Commonwealth under the Medicare Program for comparable services rendered. The medical fees allowable under the act [shall] will fluctuate with changes in the applicable Medicare reimbursement rates for services rendered prior to January 1, 1995. Thereafter, for services rendered on and after January 1, 1995, medical fees [shall] will be updated only in accordance with [§§ 127.151--127.162 (relating to medical fee updates)] this chapter.
* * * * * (d) The Medicare reimbursement mechanisms that shall be used when calculating payments to providers under the act are set forth in §§ 127.103--[127.128] 127.135.
* * * * * (f) An insurer may not make payment in excess of the medical fee caps, unless payment is made pursuant to a contract with a CCO certified by the Secretary [of Health].
§ 127.103. Outpatient providers subject to the Medicare fee schedule--generally.
(a) When services are rendered by outpatient providers who are reimbursed under the Medicare Part B Program pursuant to the Medicare fee schedule, the payment under the act shall be calculated using the Medicare fee schedule as a basis. [The fee schedule for determining payments shall be the transition fee schedule as determined by the Medicare carrier.]
(b) The insurer shall pay the provider for the applicable Medicare procedure code, required by the act and this chapter, even if the service in question is not a compensated service under the Medicare Program.
(c) If a Medicare allowance does not exist for a reported CPT or HCPCS code, or successor codes, the provider shall be paid either 80% of the usual and customary charge or the actual charge, whichever is lower.
* * * * * (e) [Fee updates subsequent to December 31, 1994, shall be in accordance with §§ 127.152 and 127.153 (relating to medical fee updates on and after January 1, 1995--generally; and medical fee updates on and after January 1, 1995--outpatient providers, services and supplies subject to the Medicare fee schedule).] Payment for services rendered under this section on and after January 1, 1995, will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
(f) On and after January 1, 1995, adjustments and modifications by CMS relating to a change in description or renumbering of any CPT or HCPCS code will be incorporated into the basis for determining the amount of payment as frozen in subsection (e) for services rendered under the act.
(g) On and after January 1, 1995, payment rates under the act for new CPT or HCPCS codes will be based on the rates allowed in the Medicare fee schedule published in the Federal Register within the calendar years of the effective date of the new codes. These payment rates will be frozen immediately, and thereafter updated annually by the percentage change in the Statewide average weekly wage.
§ 127.104. Outpatient providers subject to the Medicare fee schedule--physicians.
(a) Payments to physicians for services rendered under the act shall initially be calculated by multiplying the Medicare Part B reimbursement for the services by 113%.
(b) Payment for services rendered under this section on and after January 1, 1995, will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
(c) On and after January 1, 1995, adjustments and modifications by CMS relating to a change in description or renumbering of a CPT or HCPCS code will be incorporated into the basis for determining the amount of payment as frozen under subsection (b) for services rendered under the act.
(d) On and after January 1, 1995, payment rates under the act for new CPT or HCPCS codes will be based on the rates allowed in the Medicare fee schedule published in the Federal Register within the calendar year of the effective date of the new codes. These payment rates will be frozen immediately, and thereafter updated annually by the percentage change in the Statewide average weekly wage.
§ 127.105. Outpatient providers subject to the Medicare fee schedule--chiropractors.
* * * * * (b) Payments for spinal manipulation procedures by chiropractors shall initially be based on the Medicare fee schedule for the appropriate CPT or HCPCS codes [98940--98943], multiplied by 113%.
(c) Payments for physiological therapeutic procedures by chiropractors shall initially be based on the Medicare fee schedule for the appropriate CPT or HCPCS codes [97010--97799], multiplied by 113%.
(d) Payments shall be made for documented office visits and shall initially be based on the [Medicare fee schedule for] appropriate CPT or HCPCS codes [99201--99205 and 99211--99215], multiplied by 113%.
(e) Payment shall be made for an office visit provided on the same day as another procedure only when the office visit represents a significant and separately identifiable service performed in addition to the other procedure. The office visit shall be billed under the [proper] appropriate level CPT or HCPCS codes [99201--99215], and shall require the use of the procedure code modifier [''-25'' (] indicating a Significant, Separately Identifiable Evaluation and Management Service by the Same Physician on the Day of a Procedure[)].
(f) Payment for services rendered under this section on and after January 1, 1995, will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
(g) On and after January 1, 1995, adjustments and modifications by CMS relating to a change in description or renumbering of a CPT or HCPCS code will be incorporated into the basis for determining the amount of payment as frozen under subsection (f) for services rendered under the act.
(h) On and after January 1, 1995, payment rates under the act for new CPT or HCPCS codes will be based on the rates allowed in the Medicare fee schedule published in the Federal Register within the calendar years of the effective date of the new codes. These payment rates will be frozen immediately, and thereafter updated annually by the percentage change in the Statewide average weekly wage.
§ 127.106. Outpatient providers subject to the Medicare fee schedule--spinal manipulation performed by Doctors of Osteopathic Medicine.
(a) Payments for spinal manipulation procedures by Doctors of Osteopathic Medicine shall initially be based on the [Medicare fee schedule for] appropriate level CPT or HCPCS codes [M0702--M0730 (through 1993) or] HCPCS codes [98925--98929 (1994 and thereafter)], multiplied by 113%.
(b) Payment shall be made for an office visit provided on the same day as a spinal manipulation only when the office visit represents a significant and separately identifiable service performed in addition to the manipulation. The office visit shall be billed under the [proper] appropriate level CPT or HCPCS codes [99201--99215], and shall require the use of the procedure code modifier [''-25'' (] indicating a Significant, Separately Identifiable Evaluation and Management Service by the Same Physician on the Day of a Procedure[)].
* * * * * (d) Payment for services rendered under this section on and after January 1, 1995, will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
(e) On and after January 1, 1995, adjustments and modifications by CMS relating to a change in description or renumbering of a CPT or HCPCS code will be incorporated into the basis for determining the amount of payment as frozen under subsection (d) for services rendered under the act.
(f) On and after January 1, 1995, payment rates under the act for new CPT or HCPCS codes will be based on the rates allowed in the Medicare fee schedule published in the Federal Register within the calendar years of the effective date of the new codes. These payment rates will be frozen immediately, and thereafter updated annually by the percentage change in the Statewide average weekly wage.
§ 127.107. Outpatient providers subject to the Medicare fee schedule--physical therapy centers and independent physical therapists.
(a) Payments to outpatient physical therapy centers and independent physical therapists not reimbursed in accordance with § 127.118 (relating to RCCs--generally) shall initially be calculated by multiplying the Medicare Part B reimbursement for the services by 113%.
(b) Payment for services rendered under this section on and after January 1, 1995, will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
(c) On and after January 1, 1995, adjustments and modifications by CMS relating to a change in description or renumbering of a CPT or HCPCS code will be incorporated into the basis for determining the amount of payment as frozen under subsection (b) for services rendered under the act.
(d) On and after January 1, 1995, payment rates under the act for new CPT or HCPCS codes will be based on the rates allowed in the Medicare fee schedule published in the Federal Register within the calendar years of the effective date of the new codes. These payment rates will be frozen immediately, and thereafter updated annually by the percentage change in the Statewide average weekly wage.
§ 127.108. Durable medical equipment and home infusion therapy.
(a) Payments for durable medical equipment, home infusion therapy and the applicable CPT or HCPCS codes related to the infusion equipment, supplies, nutrients and drugs, shall initially be calculated by multiplying the Medicare Part B Fee Schedule [reimbursement] for the equipment or therapy by 113%.
(b) Payment for services rendered under this section on and after January 1, 1995, will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
(c) On and after January 1, 1995, adjustments and modifications by CMS relating to a change in description or renumbering of any CPT or HCPCS code will be incorporated into the basis for determining the amount of payment as frozen under subsection (b) for services rendered under the act.
(d) On and after January 1, 1995, payment rates under the act for new CPT or HCPCS codes will be based on the rates allowed in the Medicare fee schedule published in the Federal Register within the calendar years of the effective date of the new codes. These payment rates will be frozen immediately, and thereafter updated annually by the percentage change in the Statewide average weekly wage.
§ 127.109. Supplies and services not covered by fee schedule.
Payments for supplies provided over those included with the billed office visit shall be made at 80% of the provider's usual and customary charge when the provider supplies sufficient documentation to support the necessity of those supplies. The supplies shall be specifically identified on the HCFA 1500 or UB 92 form applicable to the treatment rendered. Supplies included in the office visit code by Medicare may not be fragmented or unbundled in accordance with § 127.204 (relating to fragmenting or unbundling of charges by providers).
§ 127.110. Inpatient acute care providers--generally.
(a) Payments to providers of inpatient acute care hospital services shall be based on the sum of the following, as updated under § 127.111a (relating to inpatient acute care providers--DRG updates):
* * * * * § 127.111. Inpatient acute care providers--DRG payments.
(a) Payments to providers of inpatient hospital services, whose Medicare Program payments are based on DRGs, shall be calculated by multiplying the established DRG payment on the date of discharge by 113%, except as set forth in § 127.111a (relating to inpatient acute care providers--DRG updates).
* * * * * § 127.111a. Inpatient acute care providers--DRG updates.
(a) On and after January 1, 1995, inpatient acute care providers, whose payments under the act are based on DRGs plus add-ons under §§ 127.110--127.116 shall be paid using the DRG Grouper, relative weight, Geometric and Arithmetic Mean Lengths of Stay and Outlier thresholds in effect on the date of discharge.
(b) On and after January 1, 1995, add-on payments based on capital-related costs as set forth in § 127.112 (relating to inpatient acute care providers--capital-related costs) will be frozen at the rates in effect on December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
(c) On and after January 1, 1995, add-on payments based on medical education costs as set forth in § 127.113 (relating to inpatient acute care providers--medical education costs) will be frozen based on the calculations made using the Medicare cost report and interim rate notification in effect on December 31, 1994. These frozen rates will be applied to the DRG rates in effect on the date of discharge, as set forth in subsection (a).
(1) Hospitals that lose the right to receive add-on payments based on medical education costs under the Medicare Program on and after January 1, 1995, shall also lose the right to receive these payments under the act as set forth in § 127.113. Commencing with services rendered on or after January 1 of the year succeeding the change in status, the add-on payment that has been computed and included in the Medicare fee cap as frozen on December 31, 1994, will be eliminated from the calculation of the reimbursement.
(2) Hospitals which gain the right to receive add-on payments based on medical education costs under the Medicare Program on and after January 1, 1995, shall receive payments based on the rates calculated in § 127.113(c). These payments will be frozen immediately, and thereafter be applied to the DRG rates in effect on the date of discharge, as set forth in subsection (a).
(d) On and after January 1, 1995, add-on payments based on cost-to-charge outliers as set forth in § 127.114 (relating to inpatient acute care providers--outliers) will be frozen based on the thresholds and calculations in effect on December 31, 1994. These payments may not be updated based on changes in the Statewide average weekly wage.
(e) On and after January 1, 1995, add-on payments based on day outliers as set forth in § 127.114 will be frozen based on the arithmetic and geometric mean length of stay in effect for discharges on December 31, 1994. These frozen rates will be applied to the DRG rates in effect on the date of discharge, as set forth in subsection (a).
(f) On and after January 1, 1995, add-on payments based on the designation under the Medicare Program as a disproportionate share hospital, will be frozen based on the designation and calculation in effect on December 31, 1994. These frozen rates will be applied to the DRG rates in effect on the date of discharge, as set forth in subsection (a).
(g) On and after January 1, 1995, payments based on designations under the Medicare Program as a Medicare-dependent small rural hospital, sole-community hospital and Medicare-geographically reclassified hospital will be frozen based on the designations and calculations in effect on December 31, 1994. These rates will be updated annually by the percentage change in the Statewide average weekly wage.
§ 127.112. Inpatient acute care providers--capital-related costs.
* * * * * (b) Hospitals, which have a hospital-specific capital rate lower than the Federal capital rate (fully-prospective), shall be paid for capital-related costs [as follows:] by multiplying the hospital's capital rate, as determined by the Medicare intermediary, [shall be multiplied] by the DRG relative weight on the date of discharge.
(c) Hospitals, which have a hospital-specific capital rate equal to or higher than the Federal capital rate (hold-harmless), shall be paid for capital-related costs as follows:
* * * * * (2) Hospitals paid at a rate greater than 100% of the Federal capital rate shall be paid on the basis of the most recent [notice of interim payment rates] interim rate notification as determined by the Medicare intermediary. Hospitals shall receive the new Federal capital rate multiplied by the DRG relative weight on the date of the discharge plus the old Federal capital rate as determined by the Medicare intermediary.
(d) Capital-exceptional hospitals, or new hospitals within the first 2 years of participation in the Medicare Program, shall be paid for capital-related costs [as follows:] by adding the most recent interim payment rate for capital-related costs, as determined by the Medicare intermediary, [shall be added] to the DRG payment on the date of discharge.
§ 127.113. Inpatient acute care providers--medical education costs.
(a) Providers of inpatient hospital services shall receive an additional payment in recognition of the costs of medical education as provided pursuant to an approved teaching program and as reimbursed under the Medicare Program. For providers with an approved teaching program in place prior to January 1, 1995, the medical education add-on payment shall be based on the following calculations:
* * * * * (2) Payments for indirect medical education costs shall be calculated as follows: the add-on percentage, identified in the provider's latest [Medicare] interim rate notification, multiplied by the DRG payment on the date of discharge.
* * * * * (c) On and after January 1, 1995, if a hospital begins receiving add-on payments for medical education costs under the Medicare Program, it shall also gain the right to receive add-on payments for medical education costs under the act, commencing with services rendered on or after January 1 of the year succeeding the change in status.
(1) The hospital shall notify the Bureau in writing of this change in status on or before November 30 of the year in which the hospital has gained the right to receive a medical education add-on payment. The notification [shall] must include the following:
* * * * * (iv) The notice of [biweekly] payment rates received from the Medicare Intermediary.
* * * * * (2) If the hospital gained the right to receive a medical education add-on payment on or after January 1, 1995, the payment shall be based on the following calculations:
(i) Payments for direct medical education costs shall be based on the notice of [biweekly payment amount] payment rates. This amount shall be annualized, multiplied by the ratio of Part A reasonable cost to total reasonable cost from Worksheet E-3, Part IV, Line 15, and divided by total hospital DRG payments from the most recently audited Medicare cost report (Worksheet E, Part A, Column 1, Line 1). This amount shall then be multiplied by the DRG payment on the date of discharge.
(ii) Payments for indirect medical education costs shall be calculated as follows: the add-on percentage, identified in the provider's most recent [Medicare] interim rate notification for the calendar year in which the approved teaching program commenced, multiplied by the DRG payment on the date of discharge.
(iii) Payments for paramedical education costs shall be based on the notice of [biweekly payment amount] payment rates. This amount shall be annualized, multiplied by the ratio of Part A reasonable cost to total reasonable cost from Worksheet E-3, Part IV, Line 15, and divided by total hospital DRG payments from the most recently audited Medicare cost report (Worksheet E, Part A, Column 1, Line 1). This amount shall be multiplied by the DRG payment on the date of discharge.
§ 127.114. Inpatient acute care providers--outliers.
(a) Payments for cost outliers shall be based on the Medicare method for determining eligibility for additional payments as follows: the billed charges will be multiplied by the aggregate ratio of cost-to-charges obtained from the most recently audited Medicare cost report to determine the cost of the claim. [This cost of claim shall be compared to the applicable Medicare cost threshold. Cost] Costs in excess of [the threshold] $36,000 shall be multiplied by 80% to determine the additional cost outlier payment.
(b) Payments to acute care providers, when the length of stay exceeds the Medicare thresholds (''day outliers''), shall be determined by applying the Medicare methodology as follows: the DRG payment plus the capital payments shall be divided by the arithmetic mean of length of stay for that DRG as determined by [HCFA] CMS to arrive at a per diem payment rate. This rate shall be multiplied by the number of actual patient days for the claim which are in excess of the outlier threshold as determined by [HCFA] CMS and published in the Federal Register. The result is added to the DRG payment.
* * * * * § 127.115. Inpatient acute care providers-disproportionate--share hospitals.
* * * * * (b) [Payments to disproportionate-share] Dispro- portionate-share hospitals shall be [calculated as follows:] reimbursed by multiplying the add-on percentage identified in the provider's latest [Medicare] interim rate notification [shall be multiplied] by the DRG payment on the date of discharge [and], the product of which shall then be multiplied by 113%.
* * * * * (d) If a hospital loses its right to receive additional payments as a disproportionate-share hospital under the Medicare Program prior to January 1, 1995, it [shall also lose its right to] may not receive additional payments under the act.
* * * * * § 127.116. Inpatient acute care providers--Medicare-dependent small rural hospitals, sole-community hospitals and Medicare-geograph- ically reclassified hospitals.
(a) [Payments for] Medicare-dependent small rural hospitals, sole-community hospitals and Medicare-geographically reclassified hospitals[,] shall be [calculated as follows:] reimbursed by multiplying the hospital's payment rate identified on the latest [Medicare] interim rate [notice shall be multiplied] notification by the DRG payment on the date of discharge, [and] the product of which shall then be multiplied by 113%.
* * * * * (c) If a hospital loses its designation as a Medicare-dependent small rural hospital, sole-community hospital or Medicare-geographically reclassified hospital under the Medicare Program prior to January 1, 1995, it [shall also lose the designation and the right to] may not receive additional payments under the act.
* * * * * § 127.117. Outpatient acute care providers, specialty hospitals and other cost-reimbursed providers [not subject to the Medicare fee schedule].
(a) The following services shall be paid on a cost-reimbursed basis for medical treatment rendered under [Act 44] the act:
* * * * * (b) As of December 31, 1994, the provider's actual charge by procedure as determined from the charge master shall be multiplied by the ratio of cost-to-charges, based on the most recently audited Medicare cost report. Except as stated in subsection (c), this amount will be frozen as of December 31, 1994 for purposes of calculating payments under the act and updated annually by the percentage change in the Statewide average weekly wage.
(c) To calculate rates frozen in subsection (b), the Bureau will multiply the provider's billed charges by the RCC associated with the appropriate Revenue Code. The appropriate Revenue Code is the Revenue Code that applies to the corresponding service descriptor in the charge master as of September 1, 1994, or the Revenue Code that applies to the corresponding service descriptor added to the charge master under subsection (f)(2).
(d) Subsection (b) will not apply when the charge master does not contain unique charges for each item of pharmacy and when actual charges are based on algorithms or other mathematical calculations to compute the charge. For purposes of effectuating the freeze, the providers' RCC for pharmacy (drug charges to patients) will be frozen based on the last audited Medicare cost report as of December 31, 1994. On and after January 1, 1995, the providers' actual charges shall be multiplied by the frozen RCC and then by 113% to determine reimbursement. These payments may not be updated based on changes in the Statewide average weekly wage.
(e) Providers that are reimbursed under this section and add new services requiring the addition of new service descriptors within previously reported Medicare revenue codes and frozen RCCs shall receive payment based on the charge associated with the new service multiplied by the frozen RCC.
(f) Providers that are reimbursed under this section and add new services requiring the addition of new service descriptors outside of the previously reported Medicare revenue codes and frozen RCCs, shall receive payment as follows:
(1) Before the completion of the audited cost report that includes the new services, payment shall be based on 80% of the provider's usual and customary charge.
(2) Upon completion of the first audited cost report that includes the new services, payment shall be based on the charge associated with the new service multiplied by the audited RCC including the charge. Payment rates shall be frozen immediately and updated annually by the percentage change in the Statewide average weekly wage.
(g) Providers reimbursed under this section that, commencing _____ (Editor's Note: The blank refers to the effective date of adoption of this proposed rulemaking.), add new services for which the providers are reimbursed by Medicare on a fee-for-service basis, shall receive reimbursement according to the procedures established under this chapter for Medicare Part B services.
(h) Providers that are reimbursed under this section and add new services under subsections (f) or (g) shall provide the service descriptor, HCPCS codes, applicable Medicare revenue codes and applicable cost data to the Bureau within 30 days of the date on which the provider first provides the new service. The Bureau will include all reimbursement rates relating to the new service in the next publication of the charge master. Providers shall thereafter be reimbursed for the service as set forth in the charge master, and may not assert that the service is new as set forth in subsection (f)(1).
§ 127.118. RCCs--generally.
Payments for services listed in § 127.117 (relating to outpatient acute care providers, specialty hospitals and other cost reimbursed providers [not subject to the Medicare fee schedule]) shall be based on the provider's specific Medicare departmental RCC for the specific services or procedures performed. For treatment rendered on and before December 31, 1994, the provider's latest audited Medicare cost report, with an NPR date preceding the date of service, shall provide the basis for the RCC.
§ 127.119. Payments for services using RCCs.
(a) Payments for services listed in § 127.117(a)(1) (relating to outpatient acute care providers, specialty hospitals and other cost reimbursed providers [not subject to the Medicare fee schedule]) shall initially be calculated [as follows:] by multiplying the provider charge [shall be multiplied] by the applicable RCC, the product of which [then] shall then be multiplied by 113%. This amount shall be updated as set forth in § 127.117.
* * * * * (c) Payments for inpatient services listed in § 127.117(a)(2) shall initially be calculated as follows, and updated as set forth in § 127.117:
(1) Inpatient routine services shall be reimbursed based on the inpatient routine cost per diem from the most recently audited Medicare cost report, HCFA Form 2552-89 or 2552-92, Worksheet D-1, Part II, Line 38. The routine cost per diem shall be updated by the TEFRA (Tax Equity and Fiscal Responsibility Act of 1982) target rate of increase as published by [HCFA] CMS in the Federal Register. The applicable update shall be applied cumulatively based on the annual update factors published subsequent to the date of the audited cost report year end and prior to December 31, 1994.
* * * * * § 127.120. RCCs--comprehensive outpatient rehabilitation facilities (CORFs) and outpatient physical therapy centers.
(a) Except as [noted] provided in [subsection (c)] this section, payments for services listed in § 127.117(a)(3) and (4) (relating to outpatient acute care providers, specialty hospitals and other cost reimbursed providers [not subject to the Medicare fee schedule]) relating to CORFs and outpatient physical therapy centers, shall be calculated [as follows:] by multiplying the provider's charge [shall be multiplied] by the applicable RCC, the product of which [then] shall then be multiplied by 113%. This amount shall be updated as set forth in subsection (d).
* * * * * (d) On and after January 1, 1995, payments to CORFs and outpatient physical therapy centers under this section, will be frozen and updated as follows:
(1) For providers whose basis of Medicare apportionment is gross charges, payment rates will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
(2) For providers whose basis of Medicare apportionment is therapy visits or weighted units, the computed payment rate as of December 31, 1994, will be frozen and updated annually by the percentage change in the Statewide average weekly wage.
§ 127.121. Cost-reimbursed providers--medical education costs.
* * * * * (b) If the cost-reimbursed provider loses its right to receive add-on payments for medical education costs under the Medicare Program, it [shall also lost its right to] may not receive add-on payments for medical education costs under the act, commencing with services rendered on or after January 1 of the year succeeding the change in status. The provider shall notify the Bureau in writing of this change in status on or before November 30 of the year in which the provider has lost the right to receive a medical education add-on payment.
(c) On and after January 1, 1995, if the cost-reimbursed provider begins receiving add-on payments for medical education costs under the Medicare Program, it [shall] may also [gain the right to] receive add-on payments for medical education costs under the act, commencing with services rendered on or after January 1 of the year succeeding the change in status.
(1) The provider shall notify the Bureau in writing of this change on or before November 30 of the year in which the provider has gained the right to receive a medical education add-on payment. The notification [shall] must include the following:
* * * * * (iii) The notice of [biweekly] payment rates received from the Medicare intermediary.
* * * * * (2) If the provider gained the right to receive a medical education add-on payment on or after January 1, 1995, the payment shall be based on the notice of [biweekly] payment [amount] rates. This amount shall be annualized and divided by the sum of the hospitals' inpatient and outpatient cost from Supplemental Worksheet E-3, Part IV, Column 1, Line 12.05 and Line 13.03. This ratio shall then be multiplied by the provider's charges, multiplied by the applicable RCC, multiplied by applicable updates and added to the charge master payment rates.
(d) On and after January 1, 1995, add-on payments based on medical education costs under this section will be frozen based on the calculations made using the Medicare cost report. These rates shall be updated annually by the percentage change in the Statewide average weekly wage.
(1) Cost-reimbursed providers that lose their right to receive add-on payments based on medical education costs under the Medicare Program on and after January 1, 1995, may not receive these payments under the act. Commencing with services rendered on or after January 1 of the year succeeding the change in status, the add-on payment that has been computed and included in the Medicare fee cap as frozen on December 31, 1994, including annual updates attributable to those medical education add-on payments, shall be eliminated from the calculation of the reimbursement. The new reimbursement rate will be frozen immediately and updated annually by the percentage change in the Statewide average weekly wage.
(2) Cost-reimbursed providers that gain the right to receive add-on payments based on medical education costs under the Medicare Program on and after January 1, 1995, may receive payments based on the rates calculated in this section. These rates will be frozen immediately and updated annually by the percentage change in the Statewide average weekly wage.
§ 127.122. Skilled nursing facilities.
(a) Payments to providers of skilled nursing care who file Medicare cost reporting forms HCFA 2540 (freestanding facilities) or HCFA 2552 (hospital-based facilities), or any successor forms, shall be calculated [as follows:] by multiplying the most recent Medicare interim per diem rate [shall be multiplied] by the number of patient days [and], the product of which shall then be multiplied by 113%.
(b) On and after January 1, 1995, the payment set forth in subsection (a) will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
§ 127.123. Hospital-based and freestanding home health care providers.
(a) Payments to providers of home health care who file [an] HCFA Form 1728 (freestanding facilities) or [an] HCFA Form 2552 (hospital-based facilities), or any successor forms, shall be calculated [as follows:] by multiplying the per visit limitation as determined by the Medicare Program [multiplied] by 113%. If the usual and customary charge per visit is lower than this calculation, then payment shall be limited to the usual and customary charge per visit. Payment at 113% of the Medicare limit shall represent payment for the entire service including all medical supplies and other items subject to cost reimbursement by the Medicare Program.
(b) On and after January 1, 1995, the payment set forth in subsection (a) will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
§ 127.124. Outpatient and end-stage renal dialysis payment.
(a) Payments to providers of outpatient and end-stage renal dialysis shall be calculated [as follows:] by multiplying the Medicare composite rate, per treatment, [shall be multiplied] by 113%.
* * * * * (c) On and after January 1, 1995, payments to providers of outpatient and end-stage renal dialysis under subsection (a) will be frozen on December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
§ 127.125. ASCs.
(a) Payments to providers of outpatient surgery in an ASC [,] licensed by the Department of Health shall be based on the ASC payment groups defined by [HCFA, and shall include the Medicare list of covered services and related classifications in these groups] CMS. This payment amount shall be multiplied by 113%. [For surgical procedures not included in the Medicare list of covered services, payment shall be based on 80% of the usual and customary charge.]
(b) On and after January 1, 1995, payments to providers of outpatient surgery in ASCs under subsection (a) will be frozen as of December 31, 1994, and updated annually by the percentage change in the Statewide average weekly wage.
§ 127.126. New providers.
* * * * * (b) New providers who are receiving payments in accordance with § 127.117 (relating to outpatient acute care providers, specialty hospitals and other cost-reimbursed providers [not subject to the Medicare fee schedule]) shall receive payments calculated as follows:
(1) Commencing with the date the provider begins treating its first patient until the completion and filing of the first Medicare cost report, payment shall be based on the aggregate RCC using the most recent [Medicare] interim rate notification.
(2) Within 30 days of the filing of the first cost report a new provider shall submit to the Bureau a copy of the [detailed] charge master in effect at the conclusion of the first cost report year and a copy of the filed cost report. Upon receipt of the filed cost report, payments shall be made in accordance with § 127.119 (relating to payments for services using RCCs), using the filed RCCs. The [detailed] charge master will be frozen in accordance with [§ 127.155 (relating to medical fee updates on and after January 1, 1995--outpatient acute care providers, specialty hospitals and other cost reimbursed providers)] § 127.119 (relating to payments for services using RCCs).
* * * * * (c) A new provider shall submit a copy of the audited Medicare cost report and NPR to the Bureau within 30 days of receipt of each by the provider.
§ 127.128. Trauma centers and burn facilities--exemption from fee caps.
* * * * * (i) Trauma centers and burn facilities shall continue to receive their usual and customary charges on and after January 1, 1995, as set forth in this section.
§ 127.129. Out-of-State medical treatment.
[(a)] When injured [employes] employees are treated outside of this Commonwealth by providers who are licensed by the Commonwealth to provide health care services, the applicable medical fee cap shall be as follows:
* * * * * [(b) When injured employes are treated outside of this Commonwealth by providers who are not licensed by the Commonwealth to provide health care services, medical fees shall be capped based on the Medicare reimbursement rate applicable in Harrisburg, Pennsylvania, under the Medicare Program for the services rendered subject to § 127.152.]
§ 127.130. Special reports.
(a) Payments shall be made for special reports [(CPT code 99080)] only if these reports are specifically requested by the insurer.
(b) Office notes and other documentation which are necessary to support provider codes billed [may not be considered] are not special reports. Providers may not request payment for these notes and documentation. [Payments for special reports shall be at 80% of the provider's usual and customary charge.]
(c) The Bureau-prescribed report required by § 127.203 (relating to medical bills--submission of medical reports) [may not be considered] is not a special report [that is chargeable under this section].
§ 127.131. Payments for prescription drugs and pharmaceuticals--generally.
(a) Payments for prescription drugs and professional pharmaceutical services shall be limited to 110% of the average wholesale price (AWP) of the product. The AWP shall be established by the most recent edition of the ''Drug Topics Redbook,'' published by Medical Economics Company of Montvale, NJ or its successor.
(b) [Pharmacists and insurers may reach agreements on which Nationally recognized schedule shall be used to define the AWP of prescription drugs. The Bureau in resolving payment disputes, may use any of the Nationally recognized schedules to determine the AWP of prescription drugs. The Bureau will provide information by an annual notice in the Pennsylvania Bulletin as to which of the Nationally recognized schedules it is using to determine the AWP of prescription drugs.
(c)] Pharmacists may not bill or [otherwise] hold the [employe] employee liable, for the difference between the actual charge for the prescription drugs and pharmaceutical services and 110% of the AWP of the product.
(c) Pharmacists dispensing prescriptions for injuries compensable under the act shall comply with the act of November 24, 1976 (P. L. 1163, No. 259) (35 P. S. §§ 960.1--960.7), known as the Generic Equivalent Drug Law.
§ 127.132. Payments for prescription drugs and pharmaceuticals--direct payment.
* * * * * (b) When agreements are reached under subsection (a), insurers shall promptly notify injured [employes] employees of the names and locations of pharmacists who have agreed to directly bill and accept payment from the insurer for prescription drugs. However, insurers may not require [employes] employees to fill prescriptions at the designated pharmacies, except as provided in Subchapter D (relating to employer list of designated providers).
§ 127.133. Payments for prescription drugs and pharmaceuticals--effect of denial of coverage by insurers.
[If an injured employe pays more than 110% of the average wholesale price of a prescription drug because the insurer initially does not accept liability for the claim under the act, or denies liability to pay for the prescription, the] The insurer shall reimburse the injured [employe] employee for the actual [cost] costs of [the] prescription drugs[, once liability has been admitted or determined] as provided in the act and this chapter.
§ 127.134. Payments for prescription drugs and pharmaceuticals--ancillary services of [health care] providers.
(a) A pharmacy or pharmacist owned or employed by a [health care] provider, which is recognized and reimbursed as an ancillary service by Medicare, and which dispenses prescription drugs to individuals during the course of treatment in the provider's facility, shall receive payment under the applicable Medicare reimbursement mechanism multiplied by 113%.
(b) On and after January 1, 1995, payments for prescription drugs and professional pharmaceutical services will be limited to 110% of the average wholesale price.
§ 127.135. Payments for prescription drugs and pharmaceuticals--drugs dispensed at a physician's office.
(a) When a prescription is filled at a physician's office, payment for the prescription drug shall be limited to 110% of the average wholesale price (AWP) of the product.
* * * * *
MEDICAL FEE UPDATES § 127.152. Medical fee updates on and after January 1, 1995--generally.
(a) Changes in Medicare reimbursement rates on and after January 1, 1995, may not be included in calculations of payments to providers under [Act 44] the act, except as permitted in this chapter.
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