Home » 2010 Issues » April 14, 2010 » OMH-15-10-00011-EP Rates of Reimbursement - Hospitals Licensed by the Office of Mental Health
OMH-15-10-00011-EP Rates of Reimbursement - Hospitals Licensed by the Office of Mental Health
4/14/10 N.Y. St. Reg. OMH-15-10-00011-EP
NEW YORK STATE REGISTER
VOLUME XXXII, ISSUE 15
April 14, 2010
RULE MAKING ACTIVITIES
OFFICE OF MENTAL HEALTH
EMERGENCY/PROPOSED RULE MAKING
NO HEARING(S) SCHEDULED
I.D No. OMH-15-10-00011-EP
Filing No. 377
Filing Date. Mar. 30, 2010
Effective Date. Mar. 30, 2010
Rates of Reimbursement - Hospitals Licensed by the Office of Mental Health
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Proposed Action:
Amendment of Part 577 of Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 7.09 and 43.02
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
The amendments are made in accordance with the 2009-2010 enacted Deficit Reduction Legislation, by reducing the growth rate of Medicaid reimbursement associated with private psychiatric hospitals licensed pursuant to Article 31 of the Mental Hygiene Law and issued an operating certificate in accordance with Part 582 of Title 14 NYCRR, effective 1/1/10.
Subject:
Rates of Reimbursement - Hospitals Licensed by the Office of Mental Health.
Purpose:
To reduce the growth of Medicaid reimbursement for licensed Article 31 private psychiatric hospitals.
Text of emergency/proposed rule:
1. Paragraph (1) of subdivision (e) of Section 577.7 is amended to read as follows:
(1) Allowable operating costs in the rate year are calculated by choosing the lower of the base year cost computed on a per diem basis or the limitation cost computed on a per diem basis, and trending this amount forward two years by the inflation factor, except for the rate period effective January 1, 2010, to December 31, 2010, when the inflation factor used to trend costs will be limited to the inflation factor for the first year of the two-year period. Administration costs, as contained in and part of operating costs, shall be subject to an administrative cost screen. Two separate administrative cost screens shall be calculated, one for hospitals with greater than 100 beds (group one), and one for hospitals with 100 or less beds (group two). The administrative cost screen is derived from the costs in the fiscal year one year prior to the base year (i.e., the same cost year from which the limitation is derived), and shall be the group average per diem cost plus 10 percent.
2. Paragraph (4) of subdivision (h) of Section 577.7 is amended to read as follows:
(4) The operating cost component of the rate will be updated annually, except for the period January 1, 2010, to December 31, 2010, with the Medicare inflation factor for hospitals and units excluded from the prospective payment system, until the hospital has operated for six months at a minimum occupancy level of at least 75 percent and files its first cost report for that same period in accordance with section 577.5 of this Part.
This notice is intended:
to serve as both a notice of emergency adoption and a notice of proposed rule making. The emergency rule will expire June 27, 2010.
Text of rule and any required statements and analyses may be obtained from:
Joyce Donohue, NYS Office of Mental Health, 44 Holland Avenue, Albany, NY 12229, (518) 474-1331, email: cocbjdd@omh.state.ny.us
Data, views or arguments may be submitted to:
Same as above.
Public comment will be received until:
45 days after publication of this notice.
Regulatory Impact Statement
1. 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/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 hospitals, licensed by the Office of Mental Health.
2. Legislative Objectives: Article 7 of the Mental Hygiene Law reflects the Commissioner's authority to establish regulations regarding mental health programs. The amendments to Part 577 are needed to reduce the growth rate of Medicaid reimbursement associated with private psychiatric hospitals licensed pursuant to Article 31 of the Mental Hygiene Law and issued an operating certificate in accordance with Part 582 of Title 14 NYCRR. (Note: These amendments are not applicable to psychiatric hospitals which are jointly licensed pursuant to Article 31 of the Mental Hygiene Law, as well as Article 28 of the Public Health Law.) These amendments are made in accordance with the 2009-2010 enacted Deficit Reduction Legislation.
3. Needs and Benefits: Effective January 1, 2010, the amendments remove the 2010 trend factor of 2.5 percent in developing the 2010 per diem Medicaid rates for Article 31 private psychiatric hospitals. Normally, under the Commissioner's authority, OMH trends base year costs forward two years to the rate year by using two annual trend factors (representing a trend factor for the year preceding the rate year and another trend factor for the rate year). But for the 2010 rate year, OMH will not use the 2010 trend factor and only use the 2009 trend factor of 3.8 percent. This action is consistent with the elimination of the inflationary adjustments and trends applied to rates for community mental health programs in 2009-2010. This amendment is a reflection of the serious fiscal condition of the State. As a result of the enacted Deficit Reduction Legislation, the rate of growth in Medicaid expenditures for the private psychiatric hospitals will be slowed, but the expectation is that the level of services provided by such hospitals will be maintained.
4. Costs:
(a) cost to State government: These regulatory amendments will not result in any additional costs to State government.
(b) cost to local government: These regulatory amendments will not result in any additional costs to local government.
(c) cost to regulated parties: This regulatory amendment will not result in any additional cost to regulated parties, but will reduce the rate of growth in Medicaid payments that the Article 31 private psychiatric hospitals would have received, projected to be 2.5 percent. Currently there are nine such providers. It is estimated that this action will result in an annual reduction in Medicaid growth of approximately $1.0 million State share of Medicaid ($2.0 million gross Medicaid).
5. Local Government Mandates: These regulatory amendments will not result in any additional imposition of duties or responsibilities upon county, city, town, village, school or fire districts.
6. Paperwork: This rule should not substantially increase the paperwork requirements of affected providers.
7. Duplication: These regulatory amendments do not duplicate existing State or federal requirements.
8. Alternatives: As noted above, this amendment is consistent with the 2009-2010 enacted Deficit Reduction Legislation and the budgetary constraints included therein. The elimination of the 2010 trend factor of 2.5 percent is consistent with the elimination of the inflationary adjustments and trends applied to rates for community mental health programs in 2009-2010 and reflects the serious fiscal condition of the State. The only alternative to this rulemaking would have been to make budgetary cuts to another program which may have already sustained previous cuts and could have the potential for putting those providers at financial risk. Therefore, that alternative was not considered. It should be noted that residential treatment facilities and Department of Health-licensed hospitals have had the same budgetary constraints enacted.
9. Federal Standards: The regulatory amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.
10. Compliance Schedule: The regulatory amendments would become effective immediately upon adoption.
Regulatory Flexibility Analysis
The rulemaking will reduce the rate of growth in Medicaid reimbursement associated with private psychiatric hospitals licensed pursuant to Article 31 of the Mental Hygiene Law and issued an operating certificate in accordance with Part 582 of Title 14 NYCRR. The proposed change is consistent with the 2009-10 enacted Deficit Reduction Legislation and recognizes the serious fiscal condition of the State. This change removes the 2010 trend factor in the development of the 2010 per diem Medicaid rates for Article 31 private psychiatric hospitals, and, as a result, slows the rate of growth in Medicaid expenditures. There will be no adverse economic impact on small businesses or local governments; therefore, a regulatory flexibility analysis is not submitted with this notice.
Rural Area Flexibility Analysis
A Rural Area Flexibility Analysis is not submitted with this notice because the rulemaking, which serves to reduce the growth rate of Medicaid reimbursement associated with private psychiatric hospitals licensed pursuant to Article 31 of the Mental Hygiene Law and issued an operating certificate in accordance with Part 582 of Title 14 NYCRR, will not impose any adverse economic impact on rural areas. The proposed change is consistent with the 2009-10 enacted Deficit Reduction Legislation and recognizes the serious fiscal condition of the State. This change removes the 2010 trend factor in the development of the 2010 per diem Medicaid rates for Article 31 private psychiatric hospitals, and, as a result, slows the rate of growth in Medicaid expenditures.
Job Impact Statement
A Job Impact Statement is not submitted with this notice because the regulation eliminates the 2010 trend factor in the development of the 2010 per diem Medicaid rates for Article 31 private psychiatric hospitals, and, as a result, slows the rate of growth in Medicaid expenditures. The proposed change is consistent with the 2009-10 enacted Deficit Reduction Legislation and recognizes the serious fiscal condition of the State. There will be no adverse impact on jobs and employment opportunities.
