907 KAR 1:055. Payments for primary care center, federally-qualified health center, federally-qualified health center look-alike, and rural health clinic services.

 

      RELATES TO: KRS 205.560, 216B.010, 216B.105, 216B.130, 216B.990, 42 C.F.R. 413, 438.60, 491, Subpart A, 440.130, 440.230, 447.3251, 45 C.F.R. 74.27, 48 C.F.R. Part 31, 42 U.S.C. 1396a, b, d

      STATUTORY AUTHORITY: KRS 194A.030(2), 194A.050(1), 205.520(3), 205.560(1), 216B.042, 42 U.S.C. 1396a

      NECESSITY, FUNCTION, AND CONFORMITY: The Cabinet for Health and Family Services, Department for Medicaid Services has responsibility to administer the Medicaid Program. KRS 205.520(3) authorizes the cabinet, by administrative regulation, to comply with any requirement that may be imposed, or opportunity presented, by federal law to qualify for federal Medicaid funds. This administrative regulation establishes the Department for Medicaid Services’ reimbursement policies for primary care center, federally-qualified health center, federally-qualified health center look-alike, and rural health clinic services.

 

      Section 1. Definitions. (1) "Advanced practice registered nurse" or "APRN" is defined by KRS 314.011(7).

      (2) "Allowable costs" means costs that are incurred by a federally-qualified health center, federally-qualified health center look-alike, rural health clinic, or primary care center that are reasonable in amount and proper and necessary for the efficient delivery of services.

      (3) "Audit" means an examination, which may be full or limited in scope, of a federally-qualified health center’s, federally-qualified health center look-alike’s, rural health clinic’s, or primary care center’s:

      (a) Financial transactions, accounts, and reports; and

      (b) Compliance with applicable Medicare and Medicaid regulations, manual instructions, and directives.

      (4) "Change in scope of service" means a change in the type, intensity, duration, or amount of service.

      (5) "Clinical psychologist" is defined by 42 C.F.R. 410.71(d).

      (6) "Department" means the Department for Medicaid Services or its designated agent.

      (7) "Enrollee" means a recipient who is enrolled with a managed care organization for the purpose of receiving Medicaid or KCHIP covered services.

      (8) "Federal financial participation" is defined in 42 C.F.R. 400.203.

      (9) "Federally-qualified health center" or "FQHC" is defined in 42 C.F.R. 405.2401.

      (10) "Federally-qualified health center look-alike" or "FQHC look-alike" means an entity that is currently approved by the United States Department of Health and Human Services, Health Resources and Services Administration, and the Centers for Medicare and Medicaid Services to be a federally-qualified health center look-alike.

      (11) "Health care provider" means, for:

      (a) A primary care center:

      1. A licensed physician;

      2. A licensed osteopathic physician;

      3. A licensed podiatrist;

      4. A licensed optometrist;

      5. A licensed or certified advanced practice registered nurse;

      6. A licensed dentist or oral surgeon;

      7. A physician assistant;

      8. A licensed clinical social worker; or

      9. A clinical psychologist;

      (b) An FQHC, FQHC look-alike, or RHC:

      1. A provider or practitioner listed in paragraph (a) of this subsection; or

      2. Contingent upon approval of a state plan amendment by the Centers for Medicare and Medicaid Services, a:

      a. Licensed professional clinical counselor; or

      b. Licensed marriage and family therapist; or

      (c) An FQHC or FQHC look-alike:

      1. A resident in the presence of a teaching physician; or

      2. A resident without the presence of a teaching physician if:

      a. The services are furnished in an FQHC or FQHC look-alike in which the time spent by the resident in performing patient care is included in determining any intermediary payment to a hospital in accordance with 42 C.F.R. 413.75 through 413.83;

      b. The resident furnishing the service without the presence of a teaching physician has completed more than six (6) months of an approved residency program;

      c. The teaching physician:

      (i) Does not direct the care of more than four (4) residents at any given time; and

      (ii) Directs care from a proximity that constitutes immediate availability; and

      d. The teaching physician:

      (i) Has no other responsibilities at the time;

      (ii) Has management responsibility for any recipient seen by the resident;

      (iii) Ensures that the services furnished are appropriate;

      (iv) Reviews with the resident, during or immediately after each visit by a recipient, the recipient’s medical history, physical examination, diagnosis, and record of tests or therapies; and

      (v) Documents the extent of the teaching physician’s participation in the review and direction of the services furnished to each recipient.

      (12) "Interim rate" means a reimbursement amount established by the department to pay an FQHC, FQHC look-alike, RHC, or a PCC for covered services prior to the establishment of a PPS rate.

      (13) "Licensed clinical social worker" means an individual who is currently licensed in accordance with KRS 335.100.

      (14) "Licensed marriage and family therapist" is defined by KRS 335.300(2).

      (15) "Licensed professional clinical counselor" is defined by KRS 335.500(3).

      (16) "Managed care organization" means an entity for which the Department for Medicaid Services has contracted to serve as a managed care organization as defined in 42 C.F.R. 438.2.

      (17) "Medical Group Management Association Physician Compensation and Production Survey Report" means a report developed and owned by the Medical Group Management Association which:

      (a) Highlights the critical relationship between physician salaries and productivity;

      (b) Is used to align physician salaries and benefits with provider production; and

      (c) Contains:

      1. Performance ratios illustrating the relationship between compensation and production; and

      2. Comprehensive and summary data tables that cover many specialties.

      (18) "Medically necessary" or "medical necessity" means that a covered benefit is determined to be needed in accordance with 907 KAR 3:130.

      (19) "Medicare Economic Index" or "MEI" means the economic index referred to in 42 U.S.C. 1395u(b)(3)(L).

      (20) "Parent facility" means a federally-qualified health center, federally-qualified health center look-alike, or primary care center that is:

      (a) Licensed and operating with a unique Kentucky Medicaid program provider number;

      (b) Operating under the same management as a satellite facility; and

      (c) The original facility which existed prior to the existence of a satellite facility.

      (21) "PCC" or "primary care center" means an entity that is currently licensed as a PCC in accordance with 902 KAR 20:058.

      (22) "Percentage increase in the MEI" is defined in 42 U.S.C. 1395u(i)(3).

      (23) "Physician assistant" is defined by KRS 311.840(3).

      (24) "PPS" means prospective payment system.

      (25) "Rate year" means, for the purposes of the MEI, the twelve (12) month period beginning July 1 of each year for which a rate is established for an FQHC, FQHC look-alike, RHC, or a PCC under the prospective payment system.

      (26) "Reasonable cost" means a cost as determined by the:

      (a) Applicable Medicare cost reimbursement principles established in 42 C.F.R. Part 413, 45 C.F.R. 74.27, and 48 C.F.R. Part 31; and

      (b) Medical Group Management Association Physician Compensation and Production Survey Report for the applicable year and region.

      (27) "Recipient" is defined by KRS 205.8451(9).

      (28) "RHC" or "rural health clinic" is defined in 42 C.F.R. 405.2401(b).

      (29) "Satellite facility" means a federally-qualified health center, federally-qualified health center look-alike, or primary care center that:

      (a) Is at a different location than the parent facility; and

      (b) Operates under the same management as the parent facility.

      (30) "Telehealth" means two (2)-way, real time interactive communication between a patient and a physician or practitioner located at a distant site for the purpose of improving a patient’s health through the use of interactive telecommunication equipment that includes, at a minimum, audio and video equipment.

      (31) "Visit" means a face-to-face encounter or encounter which occurs via telehealth between a recipient or enrollee and a health care provider during which an FQHC, FQHC look-alike, or RHC service is delivered.

 

      Section 2. Provider Participation Requirements. (1)(a) A participating FQHC, FQHC look-alike, RHC, or PCC shall be currently:

      1. Enrolled in the Kentucky Medicaid Program in accordance with 907 KAR 1:672; and

      2. Participating in the Kentucky Medicaid program in accordance with 907 KAR 1:671.

      (b) A satellite facility of an FQHC, an FQHC look-alike, or a PCC shall:

      1. Be currently listed on the parent facility’s license in accordance with 902 KAR 20:058;

      2. Comply with the requirements regarding extensions established in 902 KAR 20:058; and

      3. Comply with 907 KAR 1:671.

      (2)(a) To be initially enrolled with the department, an FQHC, FQHC look-alike, or RHC shall:

      1. Enroll in accordance with 907 KAR 1:672; and

      2. Submit proof of its certification by the United States Department of Health and Human Services, Health Resources and Services Administration as an FQHC, FQHC look-alike, or RHC.

      (b) To remain enrolled and participating in the Kentucky Medicaid program, an FQHC, FQHC look-alike, or RHC shall:

      1. Comply with the enrollment requirements established in 907 KAR 1:672;

      2. Comply with the participation requirements established in 907 KAR 1:671; and

      3. Annually submit proof of its certification by the United States Department of Health and Human Services, Health Resources and Services Administration as an FQHC, FQHC look-alike, or RHC to the department.

      (c) The requirements established in paragraphs (a) and (b) of this subsection shall apply to a satellite facility of an FQHC or FQHC look-alike.

      (3) An FQHC, FQHC look-alike, or PCC that operates multiple satellite facilities shall:

      (a) List each satellite facility on the parent facility’s license in accordance with 902 KAR 20:058; and

      (b) Consolidate claims and cost report data of its satellite facilities with the parent facility.

      (4) An FQHC, FQHC look-alike, RHC, or PCC that has been terminated from federal participation shall be terminated from Kentucky Medicaid program participation.

      (5) A participating:

      (a) FQHC and its staff shall comply with all applicable federal laws and regulations, state laws and administrative regulations, and local laws and regulations regarding the administration and operation of an FQHC;

      (b) FQHC look-alike and its staff shall comply with all applicable federal laws and regulations, state laws and administrative regulations, and local laws and regulations regarding the administration and operation of an FQHC look-alike;

      (c) RHC and its staff shall comply with all applicable federal laws and regulations, state laws and administrative regulations, and local laws and regulations regarding the administration and operation of an RHC; or

      (d) PCC and its staff shall comply with all applicable federal laws and regulations, state laws and administrative regulations, and local laws and regulations regarding the administration and operation of a PPC.

      (6) An FQHC, FQHC look-alike, RHC, or PCC performing laboratory services shall meet the requirements established in 907 KAR 1:028 and 907 KAR 1:575.

 

      Section 3. Standard Reimbursement for an FQHC, FQHC look-alike, or RHC for a Visit by a Recipient Who is not an Enrollee and that is Covered by the Department. (1) For a visit by a recipient who is not an enrollee and that is covered by the department, the department shall reimburse:

      (a) An FQHC, FQHC look-alike, or RHC an all-inclusive encounter rate per patient visit in accordance with a prospective payment system (PPS) as required by 42 U.S.C. 1396a(aa); or

      (b) A satellite facility of an FQHC or FQHC look-alike an all-inclusive encounter rate per patient visit in accordance with a prospective payment system (PPS) as required by 42 U.S.C. 1396a(aa).

      (2) Costs related to outpatient drugs or pharmacy services shall be excluded from the all-inclusive encounter rate per patient visit referenced in subsection (1) of this section.

      (3) The department shall calculate a PPS rate for a new FQHC, FQHC look-alike, or RHC in accordance with Section 4 of this administrative regulation.

      (4) The department shall adjust a PPS rate per visit:

      (a) By the percentage increase in the MEI applicable to FQHC, FQHC look-alike, or RHC services on July 1 of each year; and

      (b) In accordance with Section 8 of this administrative regulation:

      1. Upon request and documentation by an FQHC, FQHC look-alike, or RHC that there has been a change in scope of services; or

      2. Upon review and determination by the department that there has been a change in scope of services.

      (5) A rate established in accordance with this administrative regulation shall not be subject to an end of the year cost settlement.

 

      Section 4. Establishment of a PPS Rate for a New FQHC, FQHC look-alike, or RHC.

      (1)(a) The department shall establish a PPS rate to reimburse a new FQHC, FQHC look-alike, or RHC 100 percent of its reasonable cost of providing Medicaid covered services during the FQHC’s, FQHC look-alike’s, or RHC’s base year.

      (b) Except for a time frame in which the department reimburses an FQHC, FQHC look-alike, or RHC an interim rate, the initial and subsequent final PPS rate established for an FQHC, FQHC look-alike, or RHC shall:

      1. Be prospective; and

      2. Not settled to cost.

      (2)(a) The department shall determine the reasonable costs of an FQHC, FQHC look-alike, or RHC based on the cost report which contains twelve (12) full months of operating data most recently submitted to the department by the FQHC, FQHC look-alike, or RHC.

      (b) The base rate referenced in subsection (1)(a) of this section shall be based on the reasonable cost determination made by the department pursuant to paragraph (a) of this subsection..

      (3)(a) Until an FQHC, FQHC look-alike, or RHC submits a Medicaid cost report containing twelve (12) full months of operating data for the facility’s base year, the department shall reimburse the FQHC, FQHC look-alike, or RHC an interim rate equal to the all-inclusive per visit rate established for the FQHC, FQHC look-alike, or RHC by Medicare.

      (b) An FQHC, FQHC look-alike, or RHC shall provide the department with a copy of the Medicare rate letter for the rates in effect during the FQHC’s, FQHC look-alike’s, or RHC’s interim period.

      (c)1. The department shall adjust an interim rate for an FQHC, FQHC look-alike, or RHC based on the establishment of the final rate.

      2. All claims submitted to the department and paid by the department based on the interim rate shall be adjusted to comport with the final rate.

      (4)(a) An FQHC, FQHC look-alike, or RHC shall submit a cost report to the department by the end of the fifth month following the end of the FQHC’s, FQHC look-alike’s, or RHC’s first full fiscal year.

      (b) The department shall:

      1. Review the cost report referenced in paragraph (a) of this subsection submitted by an FQHC, FQHC look-alike, or RHC within ninety (90) business days of receiving the cost report; and

      2. Notify the FQHC, FQHC look-alike, or RHC of the:

      a. Necessity of the FQHC, FQHC look-alike, or RHC to submit additional documentation if necessary;

      b. Final rate established;

      c. Appeal rights regarding the final rate; and

      d. Estimated time for determining a final rate if a final rate is not established within ninety (90) days.

      (c)1. If additional documentation is necessary to establish a final rate, the FQHC, FQHC look-alike, or RHC shall:

      a. Provide the additional documentation to the department within thirty (30) days of the notification of need for additional documentation; or

      b. Request an extension beyond thirty (30) days to provide the additional documentation.

      2. The department shall grant no more than one (1) extension.

      3. An extension shall not exceed thirty (30) days.

      (d) If the department requests additional documentation from an FQHC, FQHC look-alike, or RHC but does not receive additional documentation or an extension request within thirty (30) days, the department shall reimburse the FQHC, FQHC look-alike, or RHC based on the Medicaid physician fee schedule applied to physician services pursuant to 907 KAR 3:010 until:

      1. The additional documentation has been received by the department; and

      2. The department has established a final rate.

 

      Section 5. Reimbursement for Services or Drugs Provided to an Enrollee by a PCC That is Not an FQHC, FQHC Look-Alike, or RHC and that are Covered by an MCO. (1) For a service or drug provided to an enrollee by a PCC that is not an FQHC, FQHC look-alike, or RHC and that is covered by an MCO, the PCC’s reimbursement shall be the reimbursement established pursuant to an agreement between the PCC and the managed care organization with whom the enrollee is enrolled.

      (2) The department shall not supplement the reimbursement referenced in subsection (1) of this section.

 

      Section 6. Reimbursement for Services or Drugs Provided to a Recipient by a PCC That is Not an FQHC, FQHC Look-Alike, or RHC and that are Covered by the Department. (1) For a service or drug provided to a recipient that is not an enrollee by a PCC that is not an FQHC, FQHC look-alike, or RHC, the department shall reimburse the rate or reimbursement established for the service or drug on the Medicare Fee Schedule established for Kentucky.

      (2) The reimbursement referenced in subsection (1) of this section shall not exceed the federal upper payment limit determined in accordance with 42 C.F.R. 447.321.

      (3)(a) The coverage provisions and requirements established in 907 KAR 1:054 shall apply to a service or drug provided by a PCC.

      (b) If a Medicare coverage provision or requirement exists regarding a given service or drug that contradicts a provision or requirement established in 907 KAR 1:054, the provision or requirement established in 907 KAR 1:054 shall supersede the Medicare provision or requirement.

 

      Section 7. Supplemental Reimbursement for FQHC Visits, FQHC Look-Alike Visits, and RHC Visits. If a managed care organization’s reimbursement to an FQHC, FQHC look-alike, or RHC for a visit by an enrollee to the FQHC, FQHC look-alike, or RHC is less than what the FQHC, FQHC look-alike, or RHC would receive pursuant to Sections 3 and 4 of this administrative regulation, the department shall supplement the reimbursement made by the managed care organization in a manner that:

      (1) Equals the difference between what the managed care organization reimbursed and what the reimbursement would have been if it had been made in accordance with Sections 3 and 4 of this administrative regulation;

      (2) Is in accordance with 42 U.S.C. 1396a(bb)(5)(A); and

      (3) Ensures that total reimbursement does not exceed the federal upper payment limit in accordance with:

      (a) 42 C.F.R. 447.304; and

      (b) 42 C.F.R. 447.321.

 

      Section 8. Change in Scope and PPS Rate Adjustment.

      (1)(a) If an FQHC, FQHC look-alike, or RHC changes its scope of services after the base year, the department shall adjust the FQHC’s, FQHC look-alike’s, or RHC’s PPS rate.

      (b) An adjustment to a PPS rate resulting from a change in scope that occurred after an FQHC’s, FQHC look-alike’s, or RHC’s base year shall be retroactively effective to the date that the FQHC, FQHC look-alike, or RHC applied for the change in scope.

      (2) A change in scope of service shall be restricted to:

      (a) Adding or deleting a covered service;

      (b) Increasing or decreasing the intensity of a covered service pursuant to subsection (5) of this section; or

      (c) A statutory or regulatory change that materially impacts the costs or visits of an FQHC, FQHC look-alike, or RHC.

      (3) The following items individually shall not constitute a change in scope:

      (a) A general increase or decrease in the costs of existing services;

      (b) An expansion of office hours;

      (c) An addition of a new site that provides the same Medicaid covered services;

      (d) A wage increase;

      (e) A renovation or other capital expenditure;

      (f) A change in ownership; or

      (g) An addition or deletion of a service provided by a non-licensed professional or specialist.

      (4)(a) An addition of a covered service shall be restricted to the addition of a licensed professional staff member who can perform a Medicaid covered service that is not currently being performed within the FQHC, FQHC look-alike, or RHC by a licensed professional employed or contracted by the facility.

      (b) The deletion of a covered service shall be restricted to the deletion of a licensed professional staff member who can perform a Medicaid covered service that was being performed within the FQHC, FQHC look-alike, or RHC by the licensed professional staff member.

      (5) A change in intensity shall:

      (a) Include a material change;

      (b) Increase or decrease the existing PPS rate by at least five (5) percent; and

      (c) Last at least twelve (12) months.

      (6) The department shall consider a change in scope request due to a statutory or regulatory change that materially impacts the costs of visits at an FQHC, FQHC look-alike, or RHC if:

      (a) A government entity imposes a mandatory minimum wage increase and the increase was:

      1. Not included in the calculation of the final PPS rate; or

      2. Subsequently included in the MEI applied yearly; or

      (b) A new licensure requirement or modification of an existing requirement by the state results in a change that affects all facilities within the class. A provider shall document that an increase or decrease in the cost of a visit occurred as a result of a licensure requirement or policy modification.

      (7) A requested change in scope shall:

      (a) Increase or decrease the existing PPS rate by at least five (5) percent; and

      (b) Last at least twelve (12) months.

      (8) For a change in scope that is effective during a base year for determining an FQHC’s, FQHC look-alike’s, or RHC’s final PPS rate, the base year costs associated with the change in scope shall not be duplicated when determining the revised PPS rate due to the change in scope.

      (9) The following documents shall be submitted to the department within six (6) months of the effective date of a change in scope:

      (a) A narrative describing the change in scope;

      (b) A projected cost report containing twelve (12) months of data for the interim rate change; and

      (c) A completed MAP 100501, Prospective Payment System Rate Adjustment, completed according to the Instructions for Completing the MAP 100501 Form.

      (10) The department shall:

      (a) Review the documentation listed in subsection (9) of this section; and

      (b) Notify the FQHC, FQHC look-alike, or RHC in writing of the approval or denial of the request for change in scope within ninety (90) business days from the date the department received the request.

      (11)(a) If the department requests additional documentation to calculate the rate for a change in scope, the FQHC, FQHC look-alike, or RHC shall:

      1. Provide the additional documentation to the department within thirty (30) days of the notification of need for additional documentation; or

      2. Request an extension beyond thirty (30) days to provide the additional documentation.

      (b)1. The department shall grant no more than one (1) extension.

      2. An extension shall not exceed thirty (30) days.

 

      Section 9.

 

       Limitations. (1) Except for a case in which a recipient or enrollee, subsequent to the first encounter, suffers an illness or injury requiring additional diagnosis or treatment, an encounter with more than one (1) health care provider or multiple encounters with the same health care provider which take place on the same day and at a single location shall constitute a single visit.

      (2) A vaccine available without charge to an FQHC, FQHC look-alike, RHC, or PCC through the department’s Vaccines for Children Program and the administration of the vaccine shall not be reported as a cost to the Medicaid Program.

 

      Section 10. Out-of-State Providers. Reimbursement to an out-of-state FQHC, FQHC look-alike, or RHC shall be the rate on file with the FQHC’s, FQHC look-alike’s, or RHC’s state Medicaid agency.

 

      Section 11. Federal Financial Participation. A policy established in this administrative regulation shall be null and void if the Centers for Medicare and Medicaid Services:

      (1) Denies federal financial participation for the policy; or

      (2) Disapproves the policy.

 

      Section 12. Appeal Rights. (1) An appeal of a negative action taken by the department regarding a Medicaid beneficiary shall be in accordance with 907 KAR 1:563.

      (2) An appeal of a negative action taken by the department regarding Medicaid eligibility of an individual shall be in accordance with 907 KAR 1:560.

      (3) An FQHC, FQHC look-alike, PCC, or RHC may appeal a department decision as to the application of this administrative regulation as it impacts the facility’s reimbursement rate in accordance with 907 KAR 1:671.

 

      Section 13. Incorporation by Reference. (1) The following material is incorporated by reference:

      (a) "MAP 100501, Prospective Payment System Rate Adjustment", February 2013 edition; and

      (b) "Instructions for Completing the MAP 100501 Form", February 2013 edition.

      (2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department for Medicaid Services, 275 East Main Street, Frankfort, Kentucky 40621, Monday through Friday, 8 a.m. to 4:30 p.m. (Recodified from 904 KAR 1:055, 5-2-86; Am. 13 Ky.R. 389; eff. 9-4-86; 15 Ky.R. 1326; eff. 12-13-88; 1981; eff. 3-15-89; 16 Ky.R. 281; eff. 9-20-89; 2601; eff. 6-27-90; 18 Ky.R. 543; eff. 10-6-91; 29 Ky.R. 824; 1279; eff. 10-16-02; 40 Ky.R. 49; 299; eff. 9-6-2013.)