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PA Bulletin, Doc. No. 13-1091



State-Operated Psychiatric Hospitals and Facilities

[43 Pa.B. 3300]
[Saturday, June 15, 2013]

 The Department of Public Welfare (Department) is announcing its intent to provide definition and clarification to the Medical Assistance (MA) cost reimbursement methodology for payments to State-operated psychiatric hospitals and facilities.


 Currently, all State-operated psychiatric hospitals and facilities participating in the MA Program use the direct method of cost finding. Allowable costs and the result of the cost finding process are reported electronically on the Medicaid Cost Apportionment Report (Report) on a yearly basis. The Report is prepared using the cash basis of accounting and provides a detailed listing of direct charge items and, when applicable, distributes shared costs to various levels of care.

 In conjunction with the Report, all State-operated psychiatric hospitals and facilities prepare a Building Utilization Report each year. The Building Utilization Report categorizes the use of square footage of each building. The costs related to those areas which are not patient-related are deemed unallowable.

 The hospitals and facilities use the Report to calculate the actual per diem for the year as well as the interim settlement.

Rate Setting Methodology Clarification

 Since the early 1990s, State-operated psychiatric hospitals and facilities calculated their per diem from the Report by dividing total allowable costs by total patient days. To eliminate the possibility of non-Medicaid costs from being included in these per diems, the Department is proposing to better define and clarify the manner in which it calculates the per diem for each hospital.

 Specifically, for each hospital and facility, the Department intends to calculate a base per diem rate for the year of the applicable Report by taking all allowable net Medicaid reported facility costs and dividing by total hospital or facility Medicaid patient days. Based on the final submission of the Report, the data available to calculate the rates is 2 years prior, therefore, an inflation factor is applied to this base per diem rate to trend it forward to the payment year. An interim per diem rate is used until the cost report for that year is finalized and a cost settlement can be performed.

 MA payments will be made to each State-operated psychiatric hospital and facility based on its interim Medicaid per diem rate multiplied by the number of Medicaid days of care provided to eligible clients. At the close of the fiscal year, payments will be adjusted to reflect allowable costs as established for the State-operated psychiatric hospital or facility and an interim settlement is calculated.

 The hospital or facility will use the Report to determine the actual per diem rate, which will be multiplied by the number of Medicaid days to arrive at a Gross Medicaid Cost. For each hospital or facility, income received from patients and third party insurance carriers, including gross adjustments, will be deducted from Gross Medicaid Cost to arrive at Net Medicaid Cost. The Federal portion of the Net Medicaid cost will be compared to payments received and a settlement will be processed.

Fiscal Impact

 No fiscal impact will result from this clarification of the rate setting methodology for State-operated psychiatric hospitals and facilities.

Public Comment

 Interested persons are invited to submit written comments regarding this notice to the Department of Public Welfare, Office of Medical Assistance Programs, c/o Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120. Comments received within 30 days will be reviewed and considered for any subsequent revision of the notice.

 Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).

Acting Secretary

Fiscal Note: 14-NOT-823. No fiscal impact; (8) recommends adoption.

[Pa.B. Doc. No. 13-1091. Filed for public inspection June 14, 2013, 9:00 a.m.]

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