OMH-45-10-00006-P Medical Assistance Rates of Payment for Residential Treatment Facilities for Children and Youth

11/10/10 N.Y. St. Reg. OMH-45-10-00006-P

NEW YORK STATE REGISTER

VOLUME XXXII, ISSUE 45

November 10, 2010

RULE MAKING ACTIVITIES

OFFICE OF MENTAL HEALTH

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. OMH-45-10-00006-P

Medical Assistance Rates of Payment for Residential Treatment Facilities for Children and Youth

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

This is a consensus rule making to amend Part 578 of Title 14 NYCRR.

Statutory authority:

Mental Hygiene Law, sections 7.09 and 43.02

Subject:

Medical Assistance Rates of Payment for Residential Treatment Facilities for Children and Youth.

Purpose:

To carve out the cost of pharmaceuticals from the per diem reimbursement rate for Residential Treatment Facilities.

Text of proposed rule:

A new subdivision (o) is added to Section 578.14 of Title 14 NYCRR to read as follows:

(o) Effective on or after January 1, 2011, and contingent upon federal approval, allowable operating costs shall not include the costs of pharmaceuticals listed on the New York State Medicaid formulary. Such costs may be reimbursed, as appropriate, on a fee-for-service basis by the Medicaid program.

Text of proposed rule and any required statements and analyses may be obtained from:

Joyce Donohue, NYS Office of Mental Health, 44 Holland Avenue, Albany, NY 12229, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Consensus Rule Making Determination

This rule making is filed as a Consensus rule on the grounds that it is non-controversial and makes a technical correction. No person is likely to object to this rule since its purpose is to provide fiscal relief to residential treatment facility (RTF) providers and to improve access to services by children and adolescents who require the level of care provided in a RTF.

The amendment to Part 578 specifies that, on or after January 1, 2011, and contingent upon approval by the Centers for Medicare and Medicaid Services (CMS), allowable operating costs for RTFs for children and youth licensed by the Office shall not include the costs of pharmaceuticals listed on the New York State Medicaid formulary. These costs may be reimbursed, as appropriate, on a fee-for-service basis by the Medicaid program.

This amendment will provide financial relief to RTFs, as the costs of psychiatric medications have increased more rapidly than the rate of inflation. Currently, RTF providers are paid on an all-inclusive basis, and rates are set prospectively. The rates are based upon allowable costs reflected in the provider's cost report, which is submitted two fiscal years prior to the rate year. Thus, there is a significant lag before increased costs are reflected in the provider's rate. Because pharmaceutical costs are high, and tend to rise quickly, this lag can result in a serious cash flow problem for providers. This amendment will give fiscal relief to providers and ultimately reduce taxpayer costs.

In addition, this amendment should allow for an improvement in access to services by high-need children and adolescents who require the level of care provided in a RTF. Often, high-need individuals have complex health care problems, but some RTF providers have been unable to admit these patients due to the fact that the cost of purchasing the required drug treatments was found to be financially impossible for the provider. The carve out of the pharmaceutical costs included in the New York State Medicaid formulary will permit RTF providers to access medically necessary drugs, including HIV/AIDS-related medications, directly from the fee-for-service billing pharmacy.

Statutory Authority: Section 7.09 of the Mental Hygiene Law grants the Commissioner of the Office of Mental Health the authority and responsibility to adopt regulations that are necessary and proper to implement matters under his or her jurisdiction. Section 43.02 of the Mental Hygiene Law provides that the Commissioner has the power to establish standards and methods for determining rates of payment made by government agencies pursuant to Title 11 of Article 5 of the Social Services Law for services provided by facilities, including residential treatment facilities for children and youth licensed by the Office of Mental Health.

Job Impact Statement

A Job Impact Statement is not submitted with this notice because it is evident by the nature of the rule that there will be no adverse impact on jobs and employment opportunities. This rule specifies that, effective on or after January 1, 2011, and contingent upon the approval of the Centers for Medicare and Medicaid Services approval, allowable operating costs for residential treatment facilities (RTF) will not include the costs of pharmaceuticals listed on the New York State Medicaid formulary. These costs may, as appropriate, be reimbursed on a fee-for-service basis by the Medicaid program. This rule will provide financial relief to RTF providers and improve access to services provided in a RTF for children and adolescents.