Sec. 10.09.92.08. District of Columbia Hospital Reimbursement

A. Inpatient Services Rate Calculation.

(1) A hospital in the District of Columbia shall:

(a) Bill its usual and customary charges; and

(b) Be reimbursed for covered services the lesser of its percentage of charges as calculated in §A(2) of this regulation or its charges.

(2) The percentage of charges in §A(1) of this regulation is the product of the following:

(a) The cost-to-charges percentage using only those costs of the hospital reported in the hospital’s most recent cost report as determined by the Program or its designee;

(b) The lesser of 100 percent or the cost-to-charge projection percentage which is:

(i) The hospital’s cost-to-charge ratio in its most recent cost report trended by its cost-to-charge ratio in the 2 prior years’ cost reports or, if 3 years of data are not available, the hospital’s cost-to-charge ratio in its most recent cost report divided by its cost-to-charge ratio in the prior year’s cost report; and

(ii) Applied from the midpoint of the report period used to develop the cost-to-charges percentage in §A(2)(a) of this regulation, to the midpoint of the prospective payment period;

(c) The percentage of the hospital’s costs which are efficiently and economically incurred as adjusted to reflect labor market differences between District of Columbia hospitals and Maryland hospitals; and

(d) The uncompensated care factor which is equal to:

(i) For pediatric hospitals with average lengths of stay less than 18 days, one plus two and a half times the quotient of the hospital’s uncompensated care divided by gross revenue; or

(ii) For all other hospitals, one plus the quotient of the hospital’s uncompensated care divided by gross revenue.

(3) Effective for dates of service starting July 1, 2012, and forward, the rate calculated for FY 2012 in accordance with §A(2) of this regulation shall be increased by 9 percent.

(4) A hospital in the District of Columbia shall be reimbursed for administrative days in accordance with Regulation .07C of this chapter.

(5) Efficiently and economically incurred District of Columbia hospitals’ costs are those costs which are:

(a) Less than or equal to the adjusted costs for the same all-participant, refined-diagnosis-related groups in Maryland hospitals;

(b) For hospitals with average lengths of stay of 18 days or more:

(i) Less than or equal to the adjusted cost for the same diagnosis-related groups in Maryland hospitals; and

(ii) Categorized into the following two age groups: younger than 18 years old, and 18 years old or older;

(c) Exclusive of:

(i) Maryland case charges greater than $500,000; and

(ii) District of Columbia hospital case charges greater than $500,000 times the ratio of the average charge of the District of Columbia hospital case divided by the average charge of the Maryland hospital case; and

(d) Derived from hospital costs as specified in this subsection.

(6) Maryland hospital costs are the hospitals’ charges reduced by the hospital-specific ratio of operating costs to gross charges as determined by the Program or designee.

(7) There may not be a year-end cost settlement.

B. Outpatient Services.

(1) A hospital located in the District of Columbia shall:

(a) Bill its usual and customary charges; and

(b) Be reimbursed for covered services the lesser of its percentage of charges as calculated in §B(2) of this regulation or its charges.

(2) The percentage of charges in §B(1) of this regulation is the product of:

(a) The cost-to-charges percentage using only those costs of the hospital reported in the hospital’s most recent cost report as determined by the Program or its designee; and

(b) The lesser of 100 percent or the cost-to-charge projection percentage which is:

(i) The hospital’s cost-to-charge ratio in its most recent cost report trended by its cost-to-charge ratio in the 2 prior years’ cost reports or, if 3 years of data are not available, the hospital’s cost-to-charge ratio in its most recent cost report divided by its cost-to-charge ratio in the prior year’s cost report; and

(ii) Applied from the midpoint of the report period used to develop the cost-to-charges percentage in §B(2)(a) of this regulation, to the midpoint of the prospective payment period.

(3) Effective for dates of service starting July 1, 2012, and forward, the rates calculated for FY 2012 in accordance with §B(2) of this regulation shall be increased by 9 percent.

(4) The analysis shall be performed by the Program or its designee.

(5) There may not be a year-end cost settlement.

(6) Outpatient reimbursement rates are implemented in conjunction with, and are applicable to, the same dates of service as inpatient rates.

C. Submitting Cost Reports.

(1) The provider shall submit to the Department or its designee, in the form prescribed, financial and statistical data within 5 months after the end of the provider’s fiscal year unless the Department grants the provider an extension or the provider discontinues participation in the Program.

(2) When reports are not received within 5 months and an extension has not been granted:

(a) For hospitals reimbursed in accordance with this regulation, the Program shall reduce the inpatient percentage of payment for that hospital by 5 percentage points, starting the calendar month after the calendar month in which the report is due, which will remain in effect until the report has been submitted, and there will be no refund; or

(b) For hospitals reimbursed according to Medicare standards and principles for retrospective cost reimbursement as described in 42 CFR §413, the Department shall:

(i) Withhold from the provider a maximum of 5 percent of the current monthly interim payment starting the calendar month after the calendar month in which the report is due and any subsequent calendar months until the report has been submitted; and

(ii) Refund withholdings at cost settlement.

(3) If a provider discontinues participation in the Program, financial and statistical data shall be submitted to the Department within 45 days after the effective date of termination.

(4) The Program shall grant an extension for submission of cost reports:

(a) Upon written request by the provider, setting forth the specific reasons for the request, if the Department determines, taking into consideration the totality of the circumstances, that the request is reasonable; or

(b) Concurrent with any extension granted to the hospital by Medicare, but not to exceed 60 days from the due date of cost reports.

(5) In addition to a reduction in payment percentage or withholding a percentage of interim payment pursuant to §C(2) of this regulation, when a report is not submitted by the last day of the 6th month after the end of the provider’s fiscal year and the provider has not received an extension, the Department may impose one or more sanctions as provided for in Regulation .12 of this chapter.

(6) When a report is not submitted by the last day of the 6th month after the end of the provider’s fiscal year or a report is submitted but the provider cannot furnish proper documentation to verify costs, the Department shall, if applicable, make final cost settlement for that fiscal year at a certain percentage of the last final per diem rates for which the Department has verified costs for that facility, provided that the rates established will not exceed the maximum per diem rates in effect when the facility’s costs were last settled.

(7) For purposes of §C(1)-(6) of this regulation, reports are considered received when the submitted reports are completed according to instructions issued by the Department or its designee.

(8) When a report is received after imposing a reduction as specified in §C(2)(a) of this regulation, the rate of reimbursement calculated using the latest cost report information shall be implemented starting with the 1st day of the 4th full calendar month after the month in which the report was received by the Program.