LEGAL NOTICE

COMMONWEALTH OF VIRGINIA

DEPARTMENT OF MEDICAL ASSISTANCE SERVICES

NOTICE OF INTENT TO AMEND

(Pursuant to §1902(a)(13) of the Act (U.S.C. 1396a(a)(13))

THE VIRGINIA STATE PLAN FOR MEDICAL ASSISTANCE

This Notice was posted on June 28, 2022

The Virginia Department of Medical Assistance Services (DMAS) hereby affords the public notice of its intention to amend the Virginia State Plan for Medical Assistance to provide for changes to the Methods and Standards for Establishing Payment Rates — Inpatient Care (12 VAC 30-70) and Methods and Standards for Establishing Payment Rates – Long-Term Care (12 VAC 30-90).   

This notice is intended to satisfy the requirements of 42 C.F.R. § 447.205 and of § 1902(a)(13) of the Social Security Act, 42 U.S.C. § 1396a(a)(13).  A copy of this notice is available for public review from Meredith Lee, DMAS, 600 Broad Street, Suite 1300, Richmond, VA  23219, or via e-mail at:  Meredith.Lee@dmas.virginia.gov. 

DMAS is specifically soliciting input from stakeholders, providers and beneficiaries, on the potential impact of the proposed changes discussed in this notice.  Comments or inquiries may be submitted, in writing, within 30 days of this notice publication to Meredith Lee and such comments are available for review at the same address.  Comments may also be submitted, in writing, on the Town Hall public comment forum attached to this notice.

This notice is available for public review on the Regulatory Town Hall (https://townhall.virginia.gov) on the General Notices page, found at:  https://townhall.virginia.gov/L/generalnotice.cfm

Methods & Standards for Establishing Payment Rates-Inpatient Care (12 VAC 30-70)

1. In accordance with the 2022 Special Session, Item 304.BBBB, the state plan is being revised to adjust the formula for indirect medical education (IME) reimbursement for managed care discharges for freestanding children's hospitals with greater than 50 percent Medicaid utilization in 2009 by increasing the case mix adjustment factor to the greater of 3.2962 or the most recent rebasing. Total payments for IME in combination with other payments for freestanding children's hospitals with greater than 50 percent Medicaid utilization in 2009 may not exceed the hospital’s Medicaid costs.

The expected increase in annual aggregate expenditures is $1,009,781 in state general funds and $1,029,665 in federal funds in federal fiscal year 2022.

2. In accordance with the 2022 Special Session, Item 304.B(5), the state plan is being revised to clarify any hospitals acquired by or that become fully-owned by designated Type One hospitals shall be considered Type Two facilities for reimbursement including, but not limited to: Indirect Medical Education payments, Graduate Medical Education Payments, Direct Medical Education payments, Disproportionate Share Hospital payments, hospital rate-setting purposes, aggregated cost settlements, and physician supplemental payments. Facilities acquired prior to July 1, 2022, by Type One hospitals shall continue to be designated as Type One hospitals for reimbursement purposes.

There is no expected increase or decrease in annual aggregate expenditures as a result of this change.   

3. In accordance with the 2022 Special Session, Item 304.X(2), Item 304.X(3), and Item 304.X(4), the state plan is being revised to establish rebasing of PRTF rates every three years. The first rebasing of rates shall take effect July 1, 2023. All PRTF and Addiction and Rehabilitation Treatment Services (ARTS) providers who offer qualifying services under 12VAC30-70-418(C) shall be required to submit cost reports as a part of rebasing. Out of state providers with more than 1,500 paid days for Virginia Medicaid members in the most recently completed state fiscal year shall also be required to submit a cost report. A rate ceiling shall be established based on a statewide weighted average cost per day. Rate ceilings shall be established independently for PRTFs and participating ARTS residential services.  DMAS shall also establish inflation increases for each non-rebasing fiscal year for both PRTF and qualifying ARTS providers. Inflation rates shall be tied to the Nursing Facility Moving Average as established by IHS Markit (or its successor). The most recent four quarters will be averaged to create the PRTF inflation rate.  Effective July 1, 2022, the department shall adjust PRTF rates by 8.89% to account for inflation since the last audited cost report of fiscal year 2018.  The rate ceiling shall increase to $460.89 per day.

The expected increase in annual aggregate expenditures is $997,923 in state general funds, $2,668 in special funds, and $1,057,263 in federal funds in federal fiscal year 2022.

Methods & Standards for Establishing Payment Rates-Long-Term Care (12 VAC 30-90)

1. In accordance with the 2022 Special Session, Item 304.VV, the state plan is being revised to establish a new direct and indirect care peer group for nursing facilities operating with at least 80% of the resident population having one or more of the following diagnoses: quadriplegia, traumatic brain injury, multiple sclerosis, paraplegia, or cerebral palsy. In addition, a qualifying facility must have at least 90% Medicaid utilization and a case mix index of 1.15 or higher in fiscal year 2014.  The department shall utilize the data from the most recent rebasing to make this change effective for fiscal year 2023 and subsequent rate years until this change is incorporated into the next scheduled rebasing. This change shall not affect rates established in the most recent rebasing for facilities in any other direct and indirect care peer groups.

The expected increase in annual aggregate expenditures is $899,711 in state general funds and $993,238 in federal funds in federal fiscal year 2022.

2. In accordance with the 2022 Special Session, Item 304.WW, the state plan is being revised to establish specialized care operating rates for fiscal years 2021, 2022 and 2023 by inflating the fiscal year 2020 rates using Virginia nursing home inflation. After fiscal year 2023, the department shall revert to the existing prospective methodology.

There is no expected increase or decrease in annual aggregate expenditures as a result of this change.