Section 148.122 Medicaid Percentage Adjustments

TITLE 89: SOCIAL SERVICES

CHAPTER I: DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES

SUBCHAPTER d: MEDICAL PROGRAMS

PART 148 HOSPITAL SERVICES

SECTION 148.122 MEDICAID PERCENTAGE ADJUSTMENTS

Section 148.122  Medicaid Percentage

Adjustments

Effective for dates of

service on or after July 1, 2014, unless another date is specified, the

Department shall make an annual determination of those hospitals qualified for

adjustments under this Section effective October 1 of each year unless

otherwise noted.

a)         Qualified Medicaid Percentage Hospitals.  The

Department shall make adjustment payments to hospitals that are deemed as a

Medicaid percentage hospital by the Department.  A hospital, except those that

are owned or operated by a unit of government, may qualify for a Medicaid

Percentage Adjustment (MPA) in one of the following ways:

1)         The hospital's Medicaid inpatient

utilization rate (MIUR), as defined in Section 148.120(i)(4), is at least one-half

standard deviation above the mean Medicaid utilization rate, as defined in

Section 148.120(i)(3).

2)         The hospital's low income utilization rate,

as defined in Section 148.120(i)(6), exceeds 25 per centum.

3)         Illinois hospitals that, on July

1, 1991, had an MIUR, as defined in Section 148.120(i)(4), that was at least

the mean Medicaid inpatient utilization rate, as defined in Section 148.120(i)(3),

and that were located in a planning area with one-third or fewer excess beds as

determined by the Illinois Health Facilities Planning Board (see 77 Ill. Adm.

Code 1100), and that, as of June

30, 1992, were located in a federally designated Health Manpower Shortage Area

(see 42 CFR 5 (1989)).

4)         Illinois hospitals that meet the following

criteria:

A)        Have an MIUR, as defined in Section 148.120(i)(4),

that is at least the mean Medicaid inpatient utilization rate, as defined in

Section 148.120(i)(3)

es Planning Board (see 77 Ill. Adm.

Code 1100), and that, as of June

30, 1992, were located in a federally designated Health Manpower Shortage Area

(see 42 CFR 5 (1989)).

4)         Illinois hospitals that meet the following

criteria:

A)        Have an MIUR, as defined in Section 148.120(i)(4),

that is at least the mean Medicaid inpatient utilization rate, as defined in

Section 148.120(i)(3).

B)        Have a Medicaid obstetrical inpatient

utilization rate, as defined in subsection (g)(3), that is at least one

standard deviation above the mean Medicaid obstetrical inpatient utilization

rate, as defined in subsection (g)(2).

5)         Any children's hospital, as defined in Section

148.25(d)(3).

6)         Out of state hospitals meeting the criteria

in Section 148.120(e).

7)         A hospital that reopened a previously

closed hospital facility, which includes hospitals that have been terminated

from participation in the medical assistance program in accordance with 305

ILCS 5/12-4.25, within 4 calendar years of the hospital facility's closure.

b)         In making the determination described in

subsections (a)(1) and (a)(4)(A), the Department shall utilize the data

described in Section 148.120(c) and received in compliance with Section

148.120(f).

Effective for Medicaid

Percentage rate year 2024 and thereafter, the Medicaid Inpatient utilization

rate, as defined in Section 148.120(i)(4) and used in the determination of

eligibility for payments under subsection (d), shall be modified to exclude

from both the numerator and denominator, all days of care provided to military

recruits or trainees for the United States Navy and covered by TRICARE or its

successor

Percentage rate year 2024 and thereafter, the Medicaid Inpatient utilization

rate, as defined in Section 148.120(i)(4) and used in the determination of

eligibility for payments under subsection (d), shall be modified to exclude

from both the numerator and denominator, all days of care provided to military

recruits or trainees for the United States Navy and covered by TRICARE or its

successor.

c)         Hospitals that qualified as an MPA hospital

under subsection (a)(2) for the Medicaid percentage determination year

beginning October 1, 2013 may apply annually to become qualified under

subsection (a)(2) by submitting audited certified financial statements as

described in Section 148.120(d) and received in compliance with Section

148.120(f).

d)         Medicaid Percentage Adjustments.  The adjustment

payments required by subsection (a) for qualified hospitals shall be calculated

annually as follows for hospitals defined in Section 148.25(b)(1), excluding

hospitals defined in Section 148.25(a).

1)         The payment adjustment shall be calculated

based upon the hospital's MIUR, as defined in Section 148.120(i)(4), and

subject to subsection (e), as follows:

A)        Hospitals with an MIUR below the mean

Medicaid inpatient utilization rate shall receive a payment adjustment of $25;

B)        Hospitals with an MIUR that is equal to or

greater than the mean Medicaid inpatient utilization rate but less than one

standard deviation above the mean Medicaid inpatient utilization rate shall

receive a payment adjustment of $25 plus $1 for each one percent that the

hospital's MIUR exceeds the mean Medicaid inpatient utilization rate;

C)        Hospitals with an MIUR that is equal to or

greater than one standard deviation above the mean Medicaid inpatient

utilization rate but less than 1.5 standard deviations above the mean Medicaid

inpatient utilization rate shall receive a payment adjustment of $40 plus $7

for each one percent that the hospital's MIUR exceeds one standard deviation

above the mean M

ient utilization rate;

C)        Hospitals with an MIUR that is equal to or

greater than one standard deviation above the mean Medicaid inpatient

utilization rate but less than 1.5 standard deviations above the mean Medicaid

inpatient utilization rate shall receive a payment adjustment of $40 plus $7

for each one percent that the hospital's MIUR exceeds one standard deviation

above the mean Medicaid inpatient utilization rate; and

D)        Hospitals with an MIUR that is equal to or

greater than 1.5 standard deviations above the mean Medicaid inpatient

utilization rate shall receive a payment adjustment of $90 plus $2 for each one

percent that the hospital's MIUR exceeds 1.5 standard deviations above the mean

Medicaid inpatient utilization rate.

E)        Hospitals that reopen a previously closed

hospital facility

within 4 calendar years of the

hospital facility's closure,

if the previously closed hospital facility

qualified for payments under subsection (d) at the time of closure, shall

receive the rate in place at the time of the closure until utilization data for

the new facility is available for the Medicaid inpatient utilization rate

calculation.

2)         The MPA payment, calculated in accordance

with this subsection (d), to a hospital shall not exceed $155 per day for a

children's hospital, as defined in Section 148.25(d)(3), and shall not exceed

$215 per day for all other hospitals.

3)         The amount calculated pursuant to

subsections (d)(1) through (d)(2) shall be adjusted by the aggregate annual

increase in the national hospital market basket price proxies (DRI)

hospital cost index from DSH determination year 1993, as defined in Section 148.120(i)(2),

through DSH determination year 2003 and annually thereafter, by a percentage

equal to the lesser of:

A)        The increase in the national hospital market

basket price proxies (DRI) hospital cost index for the most recent 12 month

period for which data are available; or

B)        The percentage increase in the Statewide

aver

m DSH determination year 1993, as defined in Section 148.120(i)(2),

through DSH determination year 2003 and annually thereafter, by a percentage

equal to the lesser of:

A)        The increase in the national hospital market

basket price proxies (DRI) hospital cost index for the most recent 12 month

period for which data are available; or

B)        The percentage increase in the Statewide

average hospital payment rate, over the previous year's Statewide average

hospital payment rate.

4)         The amount calculated pursuant to

subsections (d)(1) through (d)(3) shall be the inpatient payment adjustment in

dollars for the applicable Medicaid percentage determination year. The

adjustments calculated under subsections (d)(1) through (d)(3) shall be paid on

a per diem basis and

, except as provided

in subsection (d)(5),

shall be applied to

each covered day of care provided.

5)         Covered days associated with claims for

normal newborn DRGs 626 or 640 are not eligible for the MPA adjustment or the

per diem payments on adjustments calculated under subsections (d)(1) through

(d)(3).

e)         Inpatient Adjustor for Children's

Hospitals.  For a children's hospital, as defined in Section 148.25(d)(3), the

payment adjustment calculated under subsection (d)(1) shall be multiplied by

2.0.

f)         Medicaid

Percentage Adjustment Limitations

1)         In addition, to be deemed an MPA hospital,

a hospital must provide to the Department, in writing, the names of at least

two obstetricians with staff privileges at the hospital who have agreed to

provide obstetric services to individuals entitled to such services under a

State Medicaid plan.  In the case of a hospital located in a rural area (that

is, an area outside of a Metropolitan Statistical Area, as defined by the

federal Executive Office of Management and Budget), the term

"obstetrician" includes any physician with staff privileges to

perform obstetric services at the hospital

provide obstetric services to individuals entitled to such services under a

State Medicaid plan.  In the case of a hospital located in a rural area (that

is, an area outside of a Metropolitan Statistical Area, as defined by the

federal Executive Office of Management and Budget), the term

"obstetrician" includes any physician with staff privileges to

perform obstetric services at the hospital.  This requirement for obstetric

services does not apply to a hospital:

A)        In which the inpatients are predominantly

individuals under 18 years of age;

B)        That does not offer non-emergency obstetric

services as of December 22, 1987; or

C)        That was providing obstetric services prior

to February 1, 2019 and

discontinues

obstetric services after February 1, 2019 and is located within 15 miles of a

hospital that continues to provide obstetric services at the time of

discontinuation

. Hospitals that do not offer obstetric services to the

general public, with the exception of those hospitals described in Section

148.25(d), must submit a statement to that effect that includes the date

obstetric services were discontinued.

2)         Hospitals that qualify for MPAs under this

Section shall not be eligible for the total MPA if, during the MPA

determination year, the hospital discontinues provision of obstetric services.

The provisions of this subsection (f)(2) shall not apply to those hospitals

described in Section 148.25(d) or those hospitals that have not offered obstetric

services as of December 22, 1987,

or those hospitals

that discontinue obstetric services after February 1, 2019 and are located

within 15 miles of a hospital that continues to provide obstetric services at

the time of discontinuation

.  In this instance, the adjustments

calculated under subsection (d) shall cease to be effective on the date that

the hospital discontinued the provision of obstetric services

December 22, 1987,

or those hospitals

that discontinue obstetric services after February 1, 2019 and are located

within 15 miles of a hospital that continues to provide obstetric services at

the time of discontinuation

.  In this instance, the adjustments

calculated under subsection (d) shall cease to be effective on the date that

the hospital discontinued the provision of obstetric services.

3)         Appeals based upon a hospital's

ineligibility for Medicaid Percentage payment adjustments, or their payment

adjustment amounts, in accordance with Section 148.310(b), that result in a

change in a hospital's eligibility for Medicaid Percentage payment adjustments

or a change in a hospital's payment adjustment amounts, shall not affect the

Medicaid Percentage status of any other hospital or the payment adjustment

amount of any other hospital that has received notification from the Department

of its eligibility for Medicaid Percentage payment adjustments based upon the

requirements of this Section.

4)         Medicaid Inpatient Utilization Rate Limit.

Hospitals that qualify for Medicaid percentage payment adjustments under this

Section shall not be eligible for Medicaid percentage payment adjustments if

the hospital's MIUR, as defined in Section 148.120(i)(4), is less than one

percent.

g)         Inpatient Payment Adjustment Definitions.

The definitions of terms used with reference to calculation of Inpatient

Payment Adjustments are as follows:

1)         "Medicaid Percentage determination

year" has the same meaning as the DSH determination year defined in

Section 148.120(i)(2), except that:

A)        The Medicaid Percentage determination year that

begins on October 1, 2022 will end on December 31, 2023; and

B)        Effective January 1, 2024, Medicaid

Percentage determination years will begin on January 1 and end on December 31

ws:

1)         "Medicaid Percentage determination

year" has the same meaning as the DSH determination year defined in

Section 148.120(i)(2), except that:

A)        The Medicaid Percentage determination year that

begins on October 1, 2022 will end on December 31, 2023; and

B)        Effective January 1, 2024, Medicaid

Percentage determination years will begin on January 1 and end on December 31.

2)         "Mean Medicaid obstetrical inpatient utilization

rate" means a fraction, the numerator of which is the total Medicaid

(Title XIX) obstetrical inpatient days, as defined in subsection (g)(4),

provided by all Medicaid-participating Illinois hospitals providing obstetrical

services to patients who, for such days, were eligible for Medicaid under Title

XIX of the federal Social Security Act (42 U.S.C. 1396a), and the denominator

of which is the total Medicaid inpatient days, as defined in subsection (g),

for all such hospitals.  That information shall be derived from claims for

applicable services provided in the Medicaid obstetrical inpatient utilization

rate base year that were subsequently adjudicated by the Department through the

last day of June preceding the Medicaid percentage determination year and

contained within the Department's paid claims data base.

3)         "Medicaid obstetrical inpatient

utilization rate" means a fraction, the numerator of which is the Medicaid

(Title XIX) obstetrical inpatient days, as defined in subsection (g)(4), provided

by a Medicaid-participating Illinois hospital providing obstetrical services to

patients who, for such days, were eligible for Medicaid under Title XIX of the

federal Social Security Act (42 U.S.C. 1396a), and the denominator of which is

the total Medicaid (Title XIX) inpatient days, as defined in subsection (g),

provided by such hospital

atient days, as defined in subsection (g)(4), provided

by a Medicaid-participating Illinois hospital providing obstetrical services to

patients who, for such days, were eligible for Medicaid under Title XIX of the

federal Social Security Act (42 U.S.C. 1396a), and the denominator of which is

the total Medicaid (Title XIX) inpatient days, as defined in subsection (g),

provided by such hospital.  This information shall be derived from claims for

applicable services provided in the Medicaid obstetrical inpatient utilization

rate base year that were subsequently adjudicated by the Department through the

last day of June preceding the Medicaid Percentage determination year and

contained within the Department's paid claims data base.

4)         "Medicaid (Title XIX) obstetrical

inpatient days" means hospital inpatient days that were subsequently

adjudicated by the Department through the last day of June preceding the MPA

determination year and contained within the Department's paid claims data base,

for recipients of medical assistance under Title XIX of the Social Security Act

(specifically excluding Medicare/Medicaid crossover claims), with a Diagnosis

Related Grouping (DRG) of:

A)        370 through 375 for claims adjudicated

before July 1, 2014; or

B)        540, 541, 542 or 560 for claims adjudicated

on or after July 1, 2014.

5)         "Total Medicaid (Title XIX) inpatient

days", as referred to in subsections (g)(2) and (g)(3), means hospital

inpatient days, excluding days for normal newborns, that were subsequently

adjudicated by the Department through the last day of June preceding the

Medicaid Percentage determination year and contained within the Department's

paid claims data base, for recipients of medical assistance under Title XIX of

the Social Security Act, and specifically excludes Medicare/Medicaid crossover

claims

ital

inpatient days, excluding days for normal newborns, that were subsequently

adjudicated by the Department through the last day of June preceding the

Medicaid Percentage determination year and contained within the Department's

paid claims data base, for recipients of medical assistance under Title XIX of

the Social Security Act, and specifically excludes Medicare/Medicaid crossover

claims.

6)         "Medicaid obstetrical inpatient

utilization rate base year" means, for example, fiscal year 2002 for the

October 1, 2003 MPA determination year; fiscal year 2003 for the October 1,

2004 MPA determination year; etc.

7)         "Obstetric services" shall at a

minimum include non-emergency inpatient deliveries in the hospital.