Sec. 10.09.94.07. Payment Procedures

A. HSCRC Reimbursement Principles.

(1) Except for hospitals reimbursed under the provisions of §B of this regulation and except for administrative days, hospitals located in Maryland that participate in the Program shall charge and be reimbursed according to rates approved by the HSCRC pursuant to COMAR 10.37.03.

(2) If the Program discontinues using rates which have been approved by HSCRC, the Program shall reimburse a provider:

(a) According to Medicare standards and principles for retrospective cost reimbursement described in 42 CFR §413; or

(b) On the basis of charges if less than reasonable cost.

(3) The Department may not reimburse for the services of a hospital’s salaried or contractual physicians as a separate line item.

B. Annual Market Basket Reimbursement Principles.

(1) Except as specified in §B(2)-(5) of this regulation, a special pediatric hospital not approved by the Program for reimbursement according to HSCRC rates shall be reimbursed according to Medicare standards and principles for retrospective cost reimbursement described in 42 CFR §413, or on the basis of charges if less than reasonable cost. In calculating retrospective cost reimbursement rates, the Department or its designee will deduct from the designated costs or group of costs those restricted contributions which are designated by the donor for paying certain provider operating costs, or groups of costs, or costs of specific groups of participants. When the cost, or group or groups of costs designated, cover services rendered to all participants, including Medical Assistance participants, operating costs applicable to all participants shall be reduced by the amount of the restricted grants, gifts, or income from endowments, thus resulting in a reduction of allowable costs.

(2) For days of service on or after July 1, 2006, in special pediatric hospitals with pediatric rehabilitation beds in Maryland not approved by the Program for reimbursement according to HSCRC rates, the Department shall reimburse these hospitals using a prospective payment system consisting of per diem rates based on service categories audited and adjusted in the provider’s fiscal year 2004 cost report. The base per diem rates shall be:

(a) Annually adjusted by the factor indicated in the Centers for Medicare and Medicaid Services Annual Market Basket Update Factor for the Long Term Care Hospital Prospective Payment System; and

(b) Determined by allocating Medicaid inpatient costs into service categories as follows:

(i) Rehabilitation categories - $1,486.58;

(ii) Feeding categories - $2,213.98;

(iii) Severe behavior categories - $2,544.66; and

(iv) Other categories - $1,126.69.

(3) For new services established after July 1, 2006, in special pediatric hospitals with pediatric rehabilitation beds in Maryland not approved by the Program for reimbursement according to HSCRC rates, the Program shall pay at an initial rate that is set as an interim rate at the Medicaid weighted average rate of all existing inpatient per diem rates. After the first full year, actual cost data shall be used to prospectively set the new service rate.

(4) For days of service on or after July 1, 2006, in special pediatric hospitals with pediatric rehabilitation beds in Maryland not approved by the Program for reimbursement according to HSCRC rates, the Department shall reimburse hospital based outpatient services on a prospective basis that shall be adjusted annually by the difference between the:

(a) Medicaid weighted average charge increase; and

(b) Centers for Medicare and Medicaid Services Outpatient Prospective Payment System Market Basket Update Factor.

(5) For outpatient services in §B(4) of this regulation, the revenue shall be maintained at the fiscal year 2011 level beginning July 1, 2011.

C. Out-of-State Hospitals Reimbursement Principles.

(1) An out-of-State hospital, except a hospital located in the District of Columbia, shall be reimbursed the lesser of its charges or the amount reimbursable by the host state’s Title XIX agency. The hospital shall be reimbursed for administrative days in accordance with Regulation .09E of this chapter.

(2) For outpatient services, an out-of-State hospital, except a hospital located in the District of Columbia, shall be reimbursed the lesser of its charges or the amount reimbursable by the host state’s Title XIX agency.