PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Amendment of Part 592 of Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 7.09, 31.04, 43.02; and Social Services Law, sections 364 and 364-a
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
The amendments are a result of the enacted State Budget and the Financial Management Plan.
Subject:
Comprehensive Outpatient Programs.
Purpose:
To adjust the Medicaid reimbursement associated with certain outpatient programs regulated by OMH.
Text of emergency rule:
1. Subdivision (b) of Section 592.5 of Title 14 NYCRR is amended to read as follows:
(b) If the local governmental unit shall not have designated such providers of service or entered into agreements ensuring that comprehensive outpatient mental health services shall be available within the county, the Commissioner of Mental Health may directly designate providers of services as comprehensive outpatient providers pursuant to this Part.
(1) Any provider of service designated by the [commissioner] Commissioner shall meet the requirements of this Part. Any comprehensive outpatient program which fails at any time to meet the requirements set forth in [paragraph] paragraphs [(a)](1), (2) or (3) of subdivision (a) of this section shall have its supplemental medical assistance payments suspended until such time as the program substantially meets such requirements, as determined by the [commissioner] Commissioner. For purposes of this subdivision, a program which has failed to receive a renewed operating certificate of at least six months duration [as set forth in section 588.13(g)(4) of this Title] may be deemed to have met such requirement if it has submitted a plan of corrective action that has been approved by the [commissioner] Commissioner or his/her designee; has been visited to verify implementation of such plan; and has been issued an operating certificate of at least six months in duration.
(2) Prior to designating such providers, the [commissioner] Commissioner shall notify the local governmental unit of his/her intention to directly designate comprehensive outpatient programs within such county and shall provide the local governmental unit with an opportunity to respond.
2. Subdivisions (c), (d), (e), and (k) are amended and a new subdivision (l) is added to section 592.8 of Title 14 NYCRR as follows:
(c) The supplemental rate, for providers with at least one Level I comprehensive outpatient program, shall be calculated as follows:
(1) For outpatient mental health programs other than clinics which are designated Level I providers pursuant to this Part, grants received for the local fiscal year ended in 2001 for upstate and Long Island based providers, and for the local fiscal year ended in 2001 for New York City based providers, as well as grants received for subsequent fiscal years which have been identified for inclusion by the Office of Mental Health shall be added, if applicable, to the annualized eligible deficit approved in the calculation of the previous supplemental rate. Effective January 1, 2009, the amount of the grant funding utilized in calculation of the rate supplement was reduced as follows:
(i) if the rate supplement effective immediately prior to January 1, 2009 was less than $100 per visit, no reduction to the grant funding used in the rate calculation will be made;
(ii) if the rate supplement immediately prior to January 1, 2009 was greater than or equal to $100 but less than $250, a reduction of 3 percent shall be made to the grant funding used in the rate calculation, provided, however, that the resultant rate calculated effective January 1, 2009 in accordance with paragraph (3) of this subdivision shall not result in a rate lower than the highest rate for the providers described in subparagraph (i) of this paragraph;
(iii) if the rate supplement immediately prior to January 1, 2009 was greater than or equal to $250 but less than $300, a reduction of 5 percent shall be made to the grant funding used in the rate calculation, provided, however, that the resultant rate calculated effective January 1, 2009 in accordance with paragraph (3) of this subdivision shall not result in a rate lower than the highest rate for the providers described in subparagraph (ii) of this paragraph;
(iv) if the rate supplement immediately prior to January 1, 2009 was greater than or equal to $300, a reduction shall be made to the grant funding used in the rate calculation that is the greater of 10 percent of the grant funding or an amount necessary to reduce the rate supplement to $300, provided, however, that the resultant rate calculated effective January 1, 2009 in accordance with paragraph (3) of this subdivision shall not result in a rate lower than the highest rate for the providers described in subparagraph (iii) of this paragraph;
(2) For clinic treatment programs which are designated Level I programs pursuant to this Part, grants received for the local fiscal year ended in 2001 for upstate and Long Island based providers, and for the local fiscal year ended in 2001 for New York City based providers, as well as grants received for subsequent fiscal years which have been identified for inclusion by the Office of Mental Health shall be added, if applicable, to the annualized eligible deficit approved in the calculation of the previous supplemental rate. Effective January 1, 2009, the amount of the grant funding utilized in calculation of the rate supplement was reduced as follows:
(i) if the rate supplement effective immediately prior to January 1, 2009 was less than $100 per visit, no reduction to the grant funding used in the rate calculation will be made;
(ii) if the rate supplement immediately prior to January 1, 2009 was greater than or equal to $100 but less than $250, a reduction of 3 percent shall be made to the grant funding used in the rate calculation, provided, however, that the resultant rate calculated effective January 1, 2009 in accordance with paragraph (3) of this subdivision shall not result in a rate lower than the highest rate for the providers described in subparagraph (i) of this paragraph;
(iii) if the rate supplement immediately prior to January 1, 2009 was greater than or equal to $250 but less than $300, a reduction of 5 percent shall be made to the grant funding used in the rate calculation, provided, however, that the resultant rate calculated effective January 1, 2009 in accordance with paragraph (3) of this subdivision shall not result in a rate lower than the highest rate for the providers described in subparagraph (ii) of this paragraph;
(iv) if the rate supplement immediately prior to January 1, 2009 was greater than or equal to $300, a reduction shall be made to the grant funding used in the rate calculation that is the greater of 10 percent of the grant funding or an amount necessary to reduce the rate supplement to $300, provided, however, that the resultant rate calculated effective January 1, 2009 in accordance with paragraph (3) of this subdivision shall not result in a rate lower than the highest rate for the providers described in subparagraph (iii) of this paragraph.
(3) The sum of grants received by the provider, as recalculated under paragraph (1) or (2) of this subdivision as applicable, shall be divided by the projected number of annual visits to the provider's designated programs. The projected number of annual visits shall be calculated as follows:
(i) For outpatient programs other than clinic treatment programs, the [The] combined total of outpatient mental health program visits reimbursed by medical assistance for each provider shall be calculated by using the average number of visits provided in the most recent three fiscal years multiplied by 90.9 percent. These visits shall include all visits reimbursed by Medicaid, including visits partially reimbursed by Medicare. Providers, who in the three most recent fiscal years earned less than the full Medicaid supplemental rate on visits partially reimbursed by Medicare, shall have the projected number of annual visits adjusted to reflect the lower supplemental revenue earned on Medicare/Medicaid dually eligible visits. The calculation of the Medicare/Medicaid adjusted visits shall be based on the percentage of Medicaid supplemental payments earned on Medicare/Medicaid dually eligible visits provided during the three most recent fiscal years and the number of dually eligible visits provided in the three most recent fiscal years. The Medicare/Medicaid adjusted visits are calculated by multiplying the projected annual volume of dually eligible visits by the average percentage of Medicaid supplemental revenue earned on these visits during the three most recent fiscal years.
(ii) For clinic treatment programs, the combined total of outpatient mental health program visits reimbursed by medical assistance for each provider shall be calculated by using the average number of visits provided in the most recent three fiscal years multiplied by 90.9 percent, for rates effective prior to July 1, 2008. For rates effective July 1, 2008 and January 1, 2009, the higher of the number of paid visits from calendar year 2007 or the average number of paid visits provided in the calendar years 2005 – 2007, multiplied by 90.9 percent, shall be used. These visits shall include all visits reimbursed by Medicaid, including visits partially reimbursed by Medicare, and those for which payment has been made or approved by a Medicaid managed care organization. Providers, who in the three most recent fiscal years earned less than the full Medicaid supplemental rate on visits partially reimbursed by Medicare, shall have the projected number of annual visits adjusted to reflect the lower supplemental revenue earned on Medicare/Medicaid dually eligible visits. The calculation of the Medicare/Medicaid adjusted visits shall be based on the percentage of Medicaid supplemental payments earned on Medicare/Medicaid dually eligible visits provided during the three most recent fiscal years and the number of dually eligible visits provided in the three most recent fiscal years. The Medicare/Medicaid adjusted visits are calculated by multiplying the projected annual volume of dually eligible visits by the average percentage of Medicaid supplemental revenue earned on these visits during the three most recent fiscal years.
(iii) Rates calculated pursuant to [subparagraph] subparagraphs (i) or (ii) of this paragraph are subject to appeal by the local governmental unit, or by the provider with the approval of the local governmental unit. Appeals pursuant to this paragraph shall be made within [one year] 120 days after receipt of initial notification of the most recent supplemental reimbursement rate calculation. However, under no circumstances may the recalculated rate be higher than the rate cap set forth in paragraph [(3)] (4) of this subdivision.
[(3)](4) The supplemental rate for a provider operating a licensed outpatient mental health program shall be the lesser of the rate calculated in paragraph [(2)] (3) of this subdivision or a rate cap as established by the Commissioner of Mental Health and approved by the Director of the Division of the Budget. Effective January 1, 2009, the rate cap that shall be used in the calculation of the supplemental rate shall be $300.00 per visit.
(d) Excess supplemental payments shall be recouped as follows:
(1) For outpatient programs other than clinic treatment programs, in [In] order to recoup supplemental payments for those visits in excess of 110 percent of the number of visits used to calculate the supplemental rate for a Level I provider, the Office of Mental Health may adjust the supplemental rates for the period in which the excess visits occurred. Such adjustments shall be made no more frequently than quarterly during the year. The Office of Mental Health may recover such funds by requesting that the Department of Health withhold such funds from future Medicaid payments to the provider.
(2) For clinic treatment programs, in order to recoup supplemental payments for those visits provided prior to July 1, 2008 in excess of 110 percent of the number of visits used to calculate the supplemental rate for a Level I program, the Office of Mental Health may adjust the supplemental rates for the period in which the excess visits occurred. Such adjustments shall be made no more frequently than quarterly during the year. The Office of Mental Health may recover such funds by requesting that the Department of Health withhold such funds from future Medicaid payments to the provider. For services provided July 1, 2008, and thereafter, the Office of Mental Health will no longer recover supplemental payments in excess of 110 percent of the number of visits used to calculate the supplemental rate of a Level I provider.
(e) [The following visit categories] Collateral and group collateral visits for all clinic and continuing day treatment programs licensed pursuant to Part 587 of the Title shall not be eligible for Medicaid supplemental rate, and shall be excluded from the Medicaid visit volume used to calculate rate adjustments for designated programs operated by general hospitals[:
(1) collateral and home visits for day treatment and continuing treatment programs licensed pursuant to Part 585 of this Title;
(2) collateral and group collateral visits for clinic programs licensed pursuant to Part 585 of this Title; and
(3) collateral and group collateral visits for all clinic and continuing day treatment programs licensed pursuant to Part 587 of this Title].
(k) When a clinic treatment provider opens a new clinic program location, the supplemental rate shall be re-calculated to include the volume of Medicaid visits projected for the location in the provider's approved Application for Prior Approval Review. The funding used in calculation of the supplemental rate shall be increased by the amount calculated by multiplying the increased volume of Medicaid visits from the approved Application for Prior Approval Review by the Level II COPS supplement for the applicable program/region.
(l) Each general hospital, as defined by article 28 of the Public Health Law, which is operated by the New York City Health and Hospitals Corporation, which received a grant pursuant to section 41.47 of the Mental Hygiene Law for the local fiscal year ending in 1989, shall be designated as a Level I comprehensive outpatient program for all outpatient programs licensed pursuant to Part 587 of this Title. For purposes of calculating supplemental Medicaid rates pursuant to this Part, all such programs in the New York City Health and Hospitals Corporation are combined for a uniform supplemental Medical Assistance program rate.
3. Subdivision (b) is amended and a new subdivision (c) is added to section 592.10 of Title 14 NYCRR as follows:
(b) In order to recoup supplemental payments for those visits in excess of the number of visits used to calculate the supplemental rate under this section, the Office of Mental Health may adjust the supplemental rates for the period in which the excess visits occurred. Such adjustments shall be made no more frequently than quarterly during the year. Effective with all services rendered July 1, 2008 and thereafter, no such recoupment of supplemental payments to clinic treatment programs shall be made.
(c) Any program eligible to receive supplemental medical assistance reimbursement as a Level II Comprehensive Outpatient Program which fails at any time to meet the requirements set forth in this section shall have its supplemental medical assistance payments suspended until such time as the program substantially meets such requirements, as determined by the Commissioner. For purposes of this subdivision, a program which has failed to receive a renewed operating certificate of at least six months duration may be deemed to have met such requirement if it has submitted a plan of corrective action that has been approved by the Commissioner or his/her designee; has been visited to verify implementation of such plan; and has been issued an operating certificate of at least six months in duration.
This notice is intended
to serve only as a notice of emergency adoption. This agency intends to adopt this emergency rule as a permanent rule and will publish a notice of proposed rule making in the State Register at some future date. The emergency rule will expire June 27, 2009.
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
Regulatory Impact Statement
1. Statutory Authority: Subdivision (b) of 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.
Subdivision (a) of Section 31.04 of the Mental Hygiene Law empowers the Commissioner to issue regulations setting standards for licensed programs for the provision of services for persons with mental illness.
Subdivision (a) of Section 43.02 of the Mental Hygiene Law grants the Commissioner the power to set rates for facilities licensed under Article 31 of the Mental Hygiene Law.
Sections 364 and 364-a of the Social Services Law give the Office of Mental Health responsibility for establishing and maintaining standards for care and services eligible for Medicaid reimbursement in facilities under its jurisdiction, in accordance with cooperative arrangements with the Department of Health.
Chapter 54 of the Laws of 2008 provides adjusted funding appropriations in support of amendments to Part 592. (Section 1, State Agencies, Office of Mental Health, lines 18-29 on page 393, lines 46-50 on page 403, and lines 1-7 on page 404.)
2. Legislative Objectives: Articles 7 and 31 of the Mental Hygiene Law reflect the Commissioner's authority to establish regulations regarding mental health programs. The amendments to Part 592 adjust the Medicaid reimbursement associated with certain outpatient treatment programs regulated by the Office of Mental Health (OMH) consistent with the enacted 2008-2009 state budget. These changes will be targeted in such a way as to provide general fiscal relief to providers most in need, as well as improve the quality and availability of services, all while recognizing the serious fiscal condition of the State. They will also equalize reimbursement fees for clinic treatment within geographic areas, as approved by the Division of Budget.
3. Needs and Benefits: The enacted state budget for State Fiscal Year 2008-2009 provided for an approximately $5 million increase for clinic treatment programs in State share of Medicaid ($10 million gross Medicaid funds) through adjustments to the Medicaid fee supplements calculated in accordance with Part 592. This funding would have had a full annual value of $10 million in State share of Medicaid ($20 million in gross Medicaid funds) but was adjusted to reduce the highest rate supplements. This resulted in an increase of $4.39 million State share of Medicaid funds, with a full annual value of $7.54 million State share of Medicaid funds ($15.07 million in gross Medicaid funds).
Clinic treatment programs provide outpatient treatment designed to reduce symptoms, improve functioning and provide ongoing support to adults and children admitted to the program with a diagnosis of a designated mental illness. This rulemaking includes provisions to increase certain programs to a minimum payment level and removes the requirement to recover monies generated by paid visits in excess of 110 percent of the visits used to calculate the rate supplement effective July 1, 2008.
As a result of other actions proposed in the Financial Management Plan, there will be reductions made to the highest rate supplements. Providers with current rate supplements above $300 will have the funding used in the supplement calculation reduced by 10 percent; providers with rate supplements of $250-$300 will have the funding used in the supplement calculation reduced by 5 percent; and providers with rate supplements of $100-$250 will have the funding used in the supplement calculation reduced by 3 percent. OMH's intent in these proposals is to begin to move the reimbursement for mental health clinic services toward a more uniform reimbursement system, by raising the reimbursement amounts for the lowest paid providers and lowering the reimbursement amounts for the providers with the highest rates.
4. Costs:
a) Costs to regulated parties: The reduction of funding used in the calculation of the rate supplements will impact approximately one third or 102 of the approximately 317 providers currently receiving such a supplement. The impact of these reductions totals $4.93 million in gross Medicaid funds for the providers impacted by the reductions.
b) Costs to State and Local government and the agency: Medicaid services typically involve both a State and County share in matching the Federal portion. The annual State share of these outpatient initiatives is $7.54 million, with no impact to local governments, after netting the increase to provide general fiscal relief to providers most in need, with reductions to those providers with the highest rate supplements. The increase is being implemented after the local share Medicaid cap is already in place. (The local share Medicaid cap was an initiative included in the enacted State budget for 2005-2006, under which the state pays for increases in the local share of Medicaid after January 1, 2006.) The proposed changes to increase certain programs to a minimum payment level and remove the requirement to recover monies generated by paid visits in excess of 110 percent of the visits used to calculate the rate supplement were implemented effective July 1, 2008. The proposed changes to reduce the funding used in the calculation of the rate supplements for the providers with the highest supplement rates was effective January 1, 2009.
5. Local Government Mandates: These regulatory amendments will not involve or 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: The application of the increased funding for certain outpatient programs consistent with the 2008-2009 enacted State budget resulted in increases for certain clinic treatment programs, and allows clinic treatment programs to retain additional Medicaid rate supplement payments, should they increase the number of services they provide. The determination of the methodology to implement the supplement changes and the decision to allow clinic treatment programs to retain additional Medicaid rate supplement payments were made in consultation with the New York State Division of Budget, to be consistent with the enacted State budget. This allows for the continued strengthening and expansion of the ambulatory mental health system and supports a movement away from more expensive modalities of treatment. However, to address the serious fiscal condition of New York State, the Special Session of the Legislature included reductions in rate payments. The only alternative to this rulemaking would have been inaction, which would have resulted in the agency not being in compliance with the enacted State budget and amendments made as a result of the Legislative Special Session. Therefore that alternative was not considered.
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: This rulemaking will be effective upon adoption.
Regulatory Flexibility Analysis
The emergency rulemaking will adjust the Medicaid reimbursement associated with certain outpatient treatment programs regulated by the Office of Mental Health. These changes are consistent with the 2008-09 enacted State budget. The changes are targeted in such a way as to provide general fiscal relief to providers most in need and improve the quality and availability of services, all while recognizing the serious fiscal condition of the State. The amendments equalize reimbursement fees for clinic treatment within geographic areas, as approved by the Division of Budget, and allow for movement toward establishing a more uniform reimbursement system by raising the reimbursements amounts for the lowest paid providers and lowering the reimbursement amounts for providers with the highest rates. 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 emergency rulemaking, which serves to adjust Medicaid reimbursement associated with certain outpatient treatment providers, will not impose any adverse economic impact on rural areas. These changes are consistent with the 2008-09 enacted State budget. The changes are targeted in such a way as to provide general fiscal relief to providers most in need and improve the quality and availability of services, all while recognizing the serious fiscal condition of the State. The amendments equalize reimbursement fees for clinic treatment within geographic areas, as approved by the Division of Budget, and allow for movement toward establishing a more uniform reimbursement system by raising the reimbursements amounts for the lowest paid providers and lowering the reimbursement amounts for providers with the highest rates.
Job Impact Statement
A Job Impact Statement is not submitted with this notice because the emergency regulation adjusts the Medicaid reimbursement associated with certain outpatient treatment programs regulated by the Office of Mental Health. These changes are consistent with the 2008-09 enacted State budget. There will be no adverse impact on jobs and employment opportunities.
