OMH-14-07-00011-E Medical Assistance Payment for Outpatient Programs

4/4/07 N.Y. St. Reg. OMH-14-07-00011-E

NEW YORK STATE REGISTER

VOLUME XXIX, ISSUE 14

April 04, 2007

RULE MAKING ACTIVITIES

OFFICE OF MENTAL HEALTH

EMERGENCY RULE MAKING

 

I.D No. OMH-14-07-00011-E

Filing No. 310

Filing Date. Mar. 20, 2007

Effective Date. Mar. 20, 2007

Medical Assistance Payment for Outpatient Programs

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

Action taken:

Amendment of Part 588 of Title 14 NYCRR.

Statutory authority:

Mental Hygiene Law, sections 7.09(b) and 31.04(a)

Finding of necessity for emergency rule:

Preservation of general welfare.

Specific reasons underlying the finding of necessity:

These amendments increase the Medicaid rate schedule associated with clinic treatment programs and day treatment programs serving children, equalize reimbursement fees for certain outpatient programs, and make certain other changes consistent with the enacted 2005–2006 State Budget and the enacted 2006–2007 State Budget. These changes will avoid a reduction in services that would otherwise take place.

Subject:

Medical assistance payment for outpatient programs.

Purpose:

To increase certain Medicaid rate schedules and make other changes consistent with the enacted 2005–2006 and 2006–2007 State Budgets.

Text of emergency rule:

Part 588 of 14 NYCRR is amended as follows:

Subdivision (a) of Section 588.13 is amended to read as follows:

(a) Reimbursement under the medical assistance program for outpatient programs licensed pursuant to Article 31 of the Mental Hygiene Law and Part 587 of this Title which serve adults with a diagnosis of mental illness and children with a diagnosis of emotional disturbance shall be in accordance with the following fee schedule. This section shall not apply to programs licensed by both the Office of Mental Health and the Department of Health.

(1) Reimbursement under the medical assistance program for clinic treatment programs [operated by agencies which received State aid under article 41 of the Mental Hygiene Law, during the fiscal year ended June 30, 1985 for agencies located in New York City and calendar year 1984 for agencies located outside of New York City,] shall be in accordance with the following fee schedule. Such reimbursement shall be adjusted pursuant to [Section 579.7] subdivisions (i),(j) and (k) of this [Title] Section.

(i) For programs operated in Bronx, Kings, New York, Queens, Richmond, Nassau, Suffolk, Putnam, Rockland and Westchester counties:

Regular at least 30 minutes [$66.00] $71.94

Brief at least 15 minutes [33.00] 35.97

Group at least 60 minutes [23.10] 25.18

Collateral at least 30 minutes [66.00] 71.94

Group Collateral at least 60 minutes [23.10] 25.18

Crisis at least 30 minutes [66.00] 71.94

(ii) For programs operated in Allegheny, Cattaraugus, Chautauqua, Chemung, Erie, Genesee, Livingston, Monroe, Niagara, Ontario, Orleans, Schuyler, Seneca, Steuben, Tioga, Tompkins, Wayne, Wyoming and Yates counties:

Regular at least 30 minutes [$59.40] $64.75

Brief at least 15 minutes [29.70] 32.37

Group at least 60 minutes [20.79] 22.66

Collateral at least 30 minutes [59.40] 64.75

Group Collateral at least 60 minutes [20.79] 22.66

Crisis at least 30 minutes [59.40] 64.75

(iii) For programs operated in Broome, Cayuga, Chenango, Clinton, Cortland, Delaware, Essex, Franklin, Fulton, Hamilton, Herkimer, Jefferson, Lewis, Madison, Montgomery, Oneida, Onondaga, Oswego, Otsego, St. Lawrence, Albany, Columbia, Dutchess, Greene, Orange, Rensselaer, Saratoga, Schenectady, Schoharie, Sullivan, Ulster, Warren and Washington counties:

Regular at least 30 minutes [$58.30] $63.55

Brief at least 15 minutes [29.15] 31.77

Group at least 60 minutes [20.41] 22.25

Collateral at least 30 minutes [58.30] 63.55

Group Collateral at least 60 minutes [20.41] 22.25

Crisis at least 30 minutes [58.30] 63.55

(2) [Reimbursement under the medical assistance program for clinic treatment programs operated by providers of services which did not receive State aid under article 41 of the Mental Hygiene Law during fiscal year ended June 30, 1985 for agencies located in New York City and calendar year 1984 for agencies located outside of New York City, shall be in accordance with the following fee schedule unless a higher fee was approved by the commissioner in accordance with the appeal methodology under the previous reimbursement regulations.

Regular at least 30 minutes $58.30

Brief at least 15 minutes 29.15

Group at least 60 minutes 20.41

Collateral at least 30 minutes 58.30

Group Collateral at least 60 minutes 20.41

Crisis at least 30 minutes 58.30]

The minimum duration of a group or group collateral visit at a school-based clinic program shall consist of the duration of a scheduled class period at the school in which the program is based, or 60 minutes, whichever is less.

(3) Reimbursement under the medical assistance program for non-state operated continuing day treatment programs licensed pursuant to Article 31 of the Mental Hygiene Law and Part 587 of this Title shall be in accordance with the following fee schedule. [Such reimbursement shall be adjusted pursuant to Part 579.7 of this Title.]

(i) For programs operated in Bronx, Kings, New York, Queens, Richmond, Nassau, Suffolk, Putnam, Rockland and Westchester counties:

(a) Regular, collateral, group collateral, and crisis visits shall be reimbursed on the basis of service hours. The reimbursement for any service hour shall be based upon the cumulative number of service hours provided in a calendar month to an individual recipient. When the service hours of any single visit include more than one rate the provider of service shall be reimbursed at the rate that applies to the first hour of such visit. The rates of reimbursement are as follows:

Service hour 1–50	$13.20 per service hour
Service hour 51–80	$10.45 per service hour
Service hour beyond 80	$ 7.70 per service hour

(ii) For programs operated in Allegheny, Cattaraugus, Chautauqua, Chemung, Erie, Genesee, Livingston, Monroe, Niagara, Ontario, Orleans, Schuyler, Seneca, Steuben, Tompkins, Wayne, Wyoming and Yates counties:

(a) Regular, collateral, group collateral, and crisis visits shall be reimbursed on the basis of service hours. The reimbursement for any service hour shall be based upon the cumulative number of service hours provided in a calendar month to an individual recipient. When service hours of any single visit include more than one rate, the provider of service shall be reimbursed at the rate that applies to the first hour of such visit. The rates of reimbursement are as follows:

Service hour 1–50	$11.88 per service hour
Service hour 51–80	$10.45 per service hour
Service hour beyond 80	$ 7.70 per service hour

(iii) For programs operated in Broome, Cayuga, Chenango, Clinton, Cortland, Delaware, Essex, Franklin, Fulton, Hamilton, Herkimer, Jefferson, Lewis, Madison, Montgomery, Oneida, Onondaga, Oswego, Otsego, St. Lawrence, Tioga, Albany, Columbia, Dutchess, Greene, Orange, Rensselaer, Saratoga, Schenectady, Schoharie, Sullivan, Ulster, Warren and Washington counties:

(a) Regular, collateral, group collateral, and crisis visits shall be reimbursed on the basis of service hours. The reimbursement for any service hour shall be based upon the cumulative number of service hours provided in a calendar month to an individual recipient. When the service hours for any single visit include more than one rate, the provider of service shall be reimbursed at the rate that applies to the first hour of such visit. The rates of reimbursement are as follows:

Service hour 1–50	$11.66 per service hour
Service hour 51–80	$10.45 per service hour
Service hour beyond 80	$ 7.70 per service hour

(4) Reimbursement under the medical assistance program for day treatment programs serving children [operated by agencies which received State aid under article 41 of the Mental Hygiene Law, during the fiscal year ended June 30, 1985 for agencies located in New York City and calendar year 1984 for agencies located outside of New York City,] shall be in accordance with the following fee schedule.

(i) For programs operated in Bronx, Kings, New York, Queens and Richmond counties:

Full day at least 5 hours $[70.01] 72.89

Half day at least 3 hours [35.01] 36.45

Brief day at least 1 hour [23.34] 24.30

Collateral at least 30 minutes [23.34] 24.30

Home at least 30 minutes [70.01] 72.89

Crisis at least 30 minutes [70.01] 72.89

Preadmission — full day at least 5 hours[70.01] 72.89

Preadmission — half day at least 3 hours [35.01] 36.45

(ii) For programs operated in other than Bronx, Kings, New York, Queens and Richmond counties:

Full day at least 5 hours $[67.68] 70.46

Half day at least 3 hours [33.84] 35.23

Brief day at least 1 hour [22.52] 23.45

Collateral at least 30 minutes [22.52] 23.45

Home at least 30 minutes [67.68] 70.46

Crisis at least 30 minutes [67.68] 70.46

Preadmission — full day at least 5 hours [67.68] 70.46

Preadmission — half day at least 3 hours [33.84] 35.23

(5) [Reimbursement under the medical assistance program for day treatment programs serving children operated by agencies which did not receive State aid under article 41 of the Mental Hygiene Law, during the fiscal year ended June 30, 1985 for agencies located in New York City and calendar year 1984 for agencies located outside of New York City, shall be in accordance with the following fee schedule unless a higher fee was approved by the commissioner in accordance with the appeal methodology under the previous reimbursement regulations.

Full day at least 5 hours $63.80

Half day at least 3 hours 31.90

Brief day at least 1 hour 21.23

Collateral at least 30 minutes 21.23

Home at least 30 minutes 63.80

Crisis at least 30 minutes 63.80

Preadmission — full day at least 5 hours 63.80

Preadmission — half day at least 3 hours 31.90

(6)] Providers whose reimbursement under the medical assistance program for clinic, continuing day treatment, and/or day treatment has been supplemented in accordance with subdivision (g) of this section will have this additional reimbursement limited in total to an amount established by the Commissioner which shall be subject to the availability of appropriations in the Office of Mental Health's budget. Supplemental reimbursement received in excess of this threshold will be recovered in a succeeding year through the medical assistance recovery process authorized pursuant to Section 368-c of the Social Services Law.

Subdivision (b) of Section 588.13 is amended to read as follows:

(b) Reimbursement under the medical assistance program for regular, collateral, and crisis visits to all non-State operated partial hospitalization programs licensed pursuant to Article 31 of the Mental Hygiene Law and Part 587 of this Title shall be in accordance with the following fee schedule.

(1) For programs located in Nassau and Suffolk counties, the fee shall be [$21.55] $22.15 for each service hour.

(2) For programs located in New York City, the fee shall be [$28.30] $29.09 for each service hour.

(3) For programs located in the counties included in the region of New York State designated by the Office of Mental Health as the Hudson River Region, the fee shall be [$23.78] $24.45 for each service hour.

(4) For programs located in the counties in the region of New York State designated by the Office of Mental Health as the Central Region, the fee shall be [$16.30] $16.76 for each service hour.

(5) For programs located in the counties included in the region of New York State designated by the Office of Mental Health as the Western Region, the fee shall be [$20.21] $20.78 for each service hour.

Subdivision (c) of section 588.13 is amended to read as follows:

(c) Reimbursement under the medical assistance program for on-site, and off-site visits for all non-State operated intensive psychiatric rehabilitation treatment programs, licensed pursuant to Article 31 of the Mental Hygiene Law and Part 587 of this Title shall be at [$23.22] $23.87 for each service hour.

New subdivisions (i), (j), and (k) are added to Section 588.13 to read as follows:

(i) Clinic treatment programs for which an operating certificate has been issued shall receive an adjustment to the fee schedules set forth in paragraph (1) of subdivision (a) of this Section if they are enrolled in a continuous quality improvement initiative implemented by the Commissioner. In order to be enrolled in such continuous quality improvement initiative, the program shall execute an agreement with the Office of Mental Health under which the provider agrees to participate in such initiative, and undertake such quality improvement measures as shall be developed by the Commissioner.

(j) Any program eligible to receive supplemental medical assistance reimbursement pursuant to subdivision (i) of this Section, and which fails at any time to meet the requirements set forth in the agreement executed pursuant to such subdivision, shall have its continuous quality improvement adjustment suspended until such time as the program meets such requirements, as determined by the Commissioner.

(k) A clinic treatment program that has been approved by the Office of Mental Health to provide services to children and adolescents during evening and weekend hours shall receive a rate enhancement for regular or collateral clinic visits provided to recipients under the age of 18 years, when such services are provided during weekdays commencing 6 p.m. or later, or on a Saturday or Sunday, provided, however, that an enhanced rate shall only be paid for one visit provided for a recipient on any given day.

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 17, 2007.

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

Dan Odell, Bureau of Policy, Legislation and Regulation, Office of Mental Health, 44 Holland Ave., Albany, NY 12229, [phone], e-mail: [e-mail]

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 364-3 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 2005 provides increased funding appropriations in support of amendments to Part 588. (Section 1, State Agencies, Office of Mental Health, lines 25–29 on page 268 and lines 16–20 on page 273.)

Chapter 54 of the Laws of 2006 provides increased funding appropriations in support of further amendments to Part 588. (Section 1, State Agencies, Office of Mental Health, lines 44–50 on page 277 and lines 1–5 on page 278.)

2. Legislative Objectives: Articles 7 and 31 of the Mental Hygiene Law reflect the Commissioner's authority to establish regulations regarding mental health programs.

3. Needs and Benefits: These amendments increase the medicaid reimbursement associated with certain outpatient treatment programs regulated by the Office of Mental Health (OMH) consistent with the enacted 2005–2006 state budget and the enacted 2006–2007 state budget. These changes will be targeted in such a way as to provide general fiscal relief to providers, as well as improve the quality and availability of services. They will also clarify that the minimum duration of a group or group collateral visit for a school-based clinic is the shorter of 60 minutes or the duration of a scheduled class period at the school where the clinic is located. They will also equalize reimbursement fees for clinic, children's day treatment and continuing day treatment with geographic areas, as approved by the Division of the Budget.

The enacted state budget for State Fiscal Year 2005–2006 provided for an approximately $6 million annual increase for clinic treatment programs. 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. Medicaid reimbursement for services provided by clinic treatment programs is available based on fee schedules established in Part 588 of 14 NYCRR. This rulemaking includes a proposed increase in the Medicaid fee schedules for clinics of approximately 9%.

The enacted state budget for State Fiscal Year 2005–2006 provided for implementation of Children's Day Treatment initiatives that are budgeted to cost $200,000 per year. Children's Day Treatment programs provide treatment to individuals, up to 18 years of age, designed to stabilize children's adjustment to educational settings, to prepare children for return to educational settings, and to transition children to educational settings. Admission to Children's Day Treatment programs is based on a diagnosis of a designated mental illness, plus either an extended impairment in functioning due to emotional disturbance or a current impairment in functioning with severe symptoms. Medicaid reimbursement for services provided by Children's Day Treatment programs is available based on a fee schedule established in Part 588 of 14 NYCRR. This rulemaking includes a proposed increase in the Medicaid fee schedule for these programs of approximately 6%.

Additionally, this rulemaking adds a provision to Part 588 that the minimum duration of a group or group collateral visit at a school-based clinic treatment program shall consist of the duration of a scheduled class period at that school or 60 minutes, which ever is less. Currently the regulation provides only for a group or group collateral visit of 60 minutes minimum duration. In meeting with school-based clinic program providers, the agency learned that this caused problems when the regular school period was less than 60 minutes. Such school periods may range from 45 minutes to one hour. In order to comply with the 60 minute requirement, in some cases children had to be kept for a period greater than a normal school period, and this resulted in their being late to their next class. In other cases children had to leave class early to attend a group or group collateral session. Both of these situations caused difficulties for children, treatment staff, and teachers. By aligning the group and group collateral visit duration with regular school periods, these services can be more effectively integrated into the child's school day, are less likely to disrupt other educational activities, and will be more effective.

This rulemaking also provides authority to the Commissioner to provide an adjustment to the Medicaid fee schedules for those clinic treatment programs that choose to enroll in a Continuous Quality Improvement (CQI) enhancement to be implemented by the Commissioner. This initiative uses a proven best practices model to help providers deliver high quality services. In order to encourage broad participation, OMH will provide financial incentives to providers who undertake measurable quality improvement approaches.

Further, this rulemaking provides for an enhanced rate for clinic treatment programs, approved by OMH to provide services to children and adolescents during weekend and evening hours. This rate increase, to be known as the Children's Evening and Weekend (CEW) enrichment, will be an incentive to serve children and families at times that are more convenient to their schedules.

Finally, the enacted state budget for State Fiscal Year 2006–2007 provided for approximately $2,000,000 to equalize, within geographic areas, the reimbursement fees for clinics, children's day treatment and continuing day treatment programs licensed solely under Article 31 of the Mental Hygiene Law, as approved by the Division of the Budget and provided for an increase in intensive psychiatric rehabilitation treatment program and partial hospital program fees.

4. Costs:

a) Costs of regulated parties: There are no costs to providers associated with these amendments.

b) Costs to State and Local government and the agency:

Costs associated with 2005–2006 enacted state budget:

Medicaid services typically involve both a state and county share in matching the federal portion. While the state share of this $24 million outpatient initiative is over $6 million, the impact on local governments is much less. This is because most of 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 9% base increase was implemented April 1, 2005. But because Medicaid is billed on an approximate 2 month lag, only 7 months, or 7/12 of the expected increase will impact on the local share Medicaid cap in the first year. None of the 7% CQI increase was paid in calendar year 2004 nor was any of the CEW enrichment paid in calendar year 2005. Of the children's school group visits, only September and October (2 out of the 10 school months) were paid in calendar year 2005. For this reason, the expected impact on local governments will be $1.7 million each year.

Annual Costs Effective for 2005
	Total Initiative	State Share	Local Share
Clinic Increase	10,781,260	2,695,315	1,572,267
CQI Enhancement	8,385,344	2,096,336	0
CEW Enrichment	4,439,068	1,109,767	0
School Based Group	370,012	92,503	9,250
Day Treatment Increase	799,528	199,882	139,917
TOTAL	24,775,212	6,193,803	1,721,434

Costs associated with and funded from the 2006–2007 enacted state budget:

For equalizing, within geographic areas the reimbursement fees for clinics, children's day treatment and continuing day treatment effective October 1, 2006: $2,000,000 for state share of Medicaid (no local share).

For intensive psychiatric rehabilitation program fee increases effective October 1, 2006: $79,221.00 for state share of Medicaid (no local share).

For partial hospital fee increases, effective October 1, 2006: $34,365.00 (no local share).

For implementation of children's day treatment initiatives: $300,000 for state share of Medicaid (no local share).

5. Local government mandates: Other than the local share of Medicaid participation, noted in Section 4, 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:

A. Alternatives to providing increased Medicaid rates.

The application of the increased funding for certain outpatient programs consistent with the 2005–2006 enacted state budget, resulted in a statewide across the board rate increase for all clinic treatment programs, other than those operated by general hospitals, of approximately 9%. It was also determined to increase rates for Children's Day Treatment programs on a statewide basis by approximately 6%.

Selection of these rate schedule changes was determined in consultation with the New York State Division of Budget, to be consistent with the enacted state budget. The programs selected were determined most in need of rate adjustments as they do not receive the cost based rate that is used for outpatient programs operated by general hospitals. This across the board increase is a balanced and fair approach. Other rate changes and increases consistent with the 2006–2007 enacted state budget were determined, in consultation with the New York State Division of Budget, to be consistent with the enacted state budget and to be necessary and required by the statute.

B. Alternatives to adjustment of minimum duration of group or group collateral visit duration.

The change in the minimum duration from a fixed 60 minutes for the duration of a scheduled class period was selected with input from providers. The alternative of reducing the time period to some fixed duration of less than 60 minutes was considered and rejected as unresponsive to needs given that the approach to be used, i.e., match the duration of group visit to that of a scheduled class period at the school where the clinic is located, will best address the concerns of providers and the children receiving services.

C. Alternatives to the continuous quality improvement incentive.

Provision of a fiscal incentive, in the 2005–2006 enacted state budget, for those clinic programs who meet requirements for enrolling in a continuous quality improvement (CQI) initiative was selected as a best practice model that will encourage providers to deliver high quality services. The alternative of developing a continuous quality improvement program without a financial incentive was rejected as lacking incentive and less fair to those providers who choose to invest the time and effort necessary to maintain and enhance quality service and improve their service delivery. The alternative of also providing added funds to programs that do not participate in the CQI initiative was rejected as not supportive of the Office's efforts to improve program quality.

D. Alternatives to equalize reimbursement for certain outpatient programs.

Equalizing Medicaid reimbursement fees, within geographic areas, for clinic, children's day treatment and continuing day treatment programs licensed solely under Article 31 of the Mental Hygiene Law is required by the enacted 2006–2007 state budget. This will provide added resources to these programs to enable them to continue to deliver quality services. The rates involved with equalization, or “leveling up”, require approval by the Division of Budget. The alternative of not providing equalization was not available since it would conflict with statute.

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 rate changes associated with the 2005–2006 enacted state budget regulatory amendments were effective upon their adoption, and were deemed to have been effective on and after April 1, 2005 consistent with the 2005–2006 enacted state budget. The adjustment of minimum duration of a group or group collateral visit and the continuous quality improvement incentive were effective on September 26, 2005.

The rate changes associated with the 2006–2007 enacted budget which provide for equalization for clinic, children's day treatment and continuing day treatment were effective upon adoption and were deemed to have been effective on and after April 1, 2006, consistent with the 2006–2007 enacted state budget. The fee increases for partial hospital programs and intensive psychiatric rehabilitation treatment programs were effective upon adoption and were deemed to have been effective on and after October 1, 2006, consistent with the 2006–2007 enacted state budget.

Regulatory Flexibility Analysis

A Regulatory Flexibility Analysis for Small Businesses and Local Governments is not being submitted with this notice because the amended rule will not impose a significant economic impact on small businesses, or local governments. The rate increases associated with this rule are required by state statute, the enacted state budgets for state fiscal years 2005–2006 and 2006–2007.

Rural Area Flexibility Analysis

A Rural Area Flexibility Analysis is not being submitted with this notice because the amended rules will not impose any adverse economic impact on rural areas. This rule impacts outpatient treatment program rates of reimbursement. The impact of the rate change will be to increase the medicaid reimbursement rates associated with outpatient programs in rural and non-rural areas. This will support the continued provision of these vital programs which serve children, adolescents and adults in both rural and non-rural areas.

Job Impact Statement

A Job Impact Statement is not being submitted with this notice because it is apparent from the nature and purpose of this rule that it involves adjustments to financing mechanisms for existing outpatient treatment programs and will not have a substantial adverse impact on jobs and employment activities.