ASA-31-07-00006-E Medical Assistance for Chemical Dependence Services
8/1/07 N.Y. St. Reg. ASA-31-07-00006-E
NEW YORK STATE REGISTER
VOLUME XXIX, ISSUE 31
August 01, 2007
RULE MAKING ACTIVITIES
OFFICE OF ALCOHOLISM AND SUBSTANCE ABUSE SERVICES
EMERGENCY RULE MAKING
I.D No. ASA-31-07-00006-E
Filing No. 711
Filing Date. Jul. 13, 2007
Effective Date. Jul. 13, 2007
Medical Assistance for Chemical Dependence Services
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Amendment of sections 841.11(a), (b), 841.14(a) and addition of section 841.11(d) to Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 19.07(e), 19.09(b), 19.15(a), 19.40, 32.01, 32.07(a), 32.09, 43.02; and Social Services Law, section 364
Finding of necessity for emergency rule:
Preservation of public health and general welfare.
Specific reasons underlying the finding of necessity:
Modification to Inpatient Medically Supervised Withdrawal Services fee methodology is essential to continue operations of a number of service providers. Modification of Residential Rehabilitation Services for Youth rate setting methodology is required to meet Federal Medicaid State plan.
Subject:
Medical assistance for chemical dependence services.
Purpose:
To modify fee methodology.
Text of emergency rule:
1. New sections 841.11(a)(4), (5), (6) and (7) are added to read as follows:
(4) “Service operating fees” shall mean fees calculated pursuant to sections 841.11(b) and (c) as payment in full for operating costs as required by Part 816 of this Title. Prior to April 1, 2007, such fees shall be inclusive of all reimbursement for capital costs. Beginning on April 1, 2007 such fees shall not be inclusive of reimbursement for capital costs and such costs shall be reimbursed through provider-specific capital add-ons.
(5) “Capital add-on” shall mean a provider-specific cost-based per diem calculated pursuant to section 841.11(d) of this section to address allowable and approved real property, equipment, and start-up costs not included in the service operating fee. The provider-specific capital add-on shall not be utilized for reimbursement purposes prior to April 1, 2007.
(6) “Fee Period” shall be the calendar year, beginning January 1, 2008.
(7) For purposes of computing capital add-ons, the “Base Period” shall be the calendar year two years prior to the fee period.
2. Section 841.11(b) is amended to read as follows:
(b) Calculation of service operating fees. Service operating [F] fees shall be developed for inpatient medically supervised withdrawal services. Such [F]fees shall reflect geographic variations in cost. Such [F]fees, and associated provider-specific capital add-ons, as may be applicable, shall be all inclusive and payment in full for inpatient medically supervised withdrawal services provided pursuant to Part 816 of this Title. Separate inpatient medically supervised withdrawal service operating fees shall be established for the upstate region and the downstate region.
3. Section 841.11(c) is amended to read as follows:
(c) Fee Methodology. The service operating fees for inpatient medically supervised withdrawal services shall be determined using a cost model based on the requirements of Part 816 of this Title and a review of historical costs for inpatient medically supervised withdrawal services. The cost model shall contain personal service and non-personal service costs. Upstate and downstate fees shall be used to recognize cost differentials between these regions of the State. Two [unit] per diem fee models shall be developed: inpatient medically supervised withdrawal downstate and inpatient medically supervised withdrawal service upstate.
4. Section 841.11(d) is re-lettered section 841.11(e)
5. A new section 841.11(d) is added to read as follows:
(d) Calculation of the capital add-on.
(1) To be considered as allowable, capital costs must be reasonable and necessary to patient care under Part 816 of this Title. Allowable capital costs shall be determined and reimbursed by the office in accordance with the requirements of section 841.14 of this Title. Except as provided for in paragraph (4) of this subdivision, allowable patient days for the purpose of calculating the capital add-on shall be the higher of the actual days in the base period or 85 percent of possible days based upon annualized certified bed capacity.
(2) The capital add-on to the service operating fee shall be calculated for each fee period on a provider-specific basis by dividing the provider's allowable capital costs from the base period by allowable patient days as defined in paragraph (1) of this subdivision.
(3) Interest on current working capital shall be treated and reported as an administrative operating expense and as such is not considered an allowable capital cost.
(4) At the discretion of the office, the capital add-on may be calculated or adjusted on a retroactive or prospective basis to more accurately reflect the actual or anticipated allowable capital cost, the base period as defined in section 841.11(a)(7) and the methodology as described in section 841.11(d)(2) notwithstanding. At the discretion of the office, when the capital add-on is adjusted retroactively, actual patient days for the fee period of the adjustment may be used instead of allowable patient days as defined in paragraph (1) of this subdivision.
6. Section 841.12(a)(10) is amended to read as follows:
(10) “Service operating fee” shall mean fees calculated pursuant to subdivision (b) of this section as payment in full for operating expenses as required by Part 817 of this Title. Such fee shall not include [the] capital [or admission review team] add-ons.
7. Section 841.12(a)(12) is deleted.
8. Section 841.12(b)(4)(i) is amended to read as follows:
(i) the application of an annual trend factor to the service operating fee. Such trend factor shall be based on the Congressional Budget Office's Consumer Price Index for all Urban Consumers and shall apply to all components of the service operating fee, but shall not apply to the capital [or admission review team] add-on[s] to the service operating fee;
9. Section 841.12(d) is deleted.
10. Section 841.12(e) is amended to read as follows:
(3) [If] Where the office determines that sufficient allowable expense exists, a capital [and admission review team] add-on shall be calculated and added to the service operating per diem fee. Capital [and admission review team] add-ons to the service operating fee shall be calculated as defined in [subdivisions] section 841.12 [(c) and (d) of this section].
12. Section 841.12(g) (2) is amended to read as follows:
(2) The service operating fee and [admission review team] capital add-on for each new eligible residential rehabilitation services for youth provider shall be calculated and reimbursed pursuant to the requirements of subdivisions (b) to [(f)] (e) of this section[. The capital add-on shall be approved, calculated and reimbursed pursuant to the requirements of subdivision (c), (e), and (f) of this section] and section 841.14 of this Part.
13. Sections 841.12(e), (f), (g), (h) and (i) are re-lettered 841.12(d), (e), (f), (g), and (h).
14. Section 841.13(c) is amended to read as follows:
(c) Revisions to rates for inpatient rehabilitation programs, revisions to capital [and admission review team] add-ons for residential rehabilitation services for youth programs, revisions to service operating fees for residential rehabilitation services for youth programs based on changes in certified capacity.
15. Section 841.14(a) is amended to read as follows:
(a) This section shall apply [only] to [those] all programs with Medicaid reimbursement calculated pursuant to [Section 841.10 of this Title or Section 841.12 of] this Part.
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 October 10, 2007.
Text of emergency rule and any required statements and analyses may be obtained from:
Patricia Flaherty, Office of Alcoholism and Substance Abuse Services, 1450 Western Ave., Albany, NY 12203-3539, (518) 485-2317, e-mail: PatriciaFlaherty@oasas.state.ny.us
Regulatory Impact Statement
Part 841 – Medical Assistance for Chemical Dependence Services will be amended to revise the fee setting methodology for inpatient medically withdrawal services and residential rehabilitation services for youth.
1. Statutory Authority:
Section 19.07(e) of the Mental Hygiene Law authorizes the Commissioner of the Office of Alcoholism and Substance Abuse Services (“the Commissioner”) to ensure that persons who abuse or are dependent on alcohol and/or substances and their families are provided with care and treatment which is effective and of high quality.
Section 19.09(b) of the Mental Hygiene Law authorizes the Commissioner to adopt regulations necessary and proper to implement any matter under his or her jurisdiction.
Section 19.15(a) of the Mental Hygiene Law bestows upon the Commissioner the responsibility of promoting, establishing, coordinating, and conducting programs for the prevention, diagnosis, treatment, aftercare, rehabilitation, and control in the field of chemical abuse or dependence.
Section 19.40 of the Mental Hygiene Law authorizes the Commissioner to issue a single operating certificate for the provision of chemical dependence services.
Section 32.01 of the Mental Hygiene Law authorizes the Commissioner to adopt any regulation reasonably necessary to implement and effectively exercise the powers and perform the duties conferred by Article 32.
Section 32.07(a) of the Mental Hygiene Law gives the Commissioner the power to adopt regulations to effectuate the provisions and purposes of Article 32.
Section 32.09 of the Mental Hygiene Law gives the Commissioner the authority to issue operating certificates to providers of chemical dependence services.
Section 43.02 of the Mental Hygiene Law gives the Commissioner the authority to determine rates or methods of payment for inpatient services subject to licensure or certification and to adopt rules and regulations to effectuate provisions of this section.
2. Legislative Objectives:
Chapter 558 of the Laws of 1999 requires the promulgation of rules and regulations to regulate and ensure the consistent high quality of services provided within the state to persons suffering from chemical abuse or dependence, their families and significant others, and those who are at risk of becoming chemical abusers. The amendments to Part 841 will remove a standardized regional capital component from the inpatient medically supervised withdrawal (MSW) fee and replace it with a provider specific capital add-on based on each providers actual capital expenditures as reported in their annual cost reports and adjusted by OASAS to remove any costs not allowable under Part 841. Reimbursement for MSW operating costs would continue in the form of regional fees. This change would also comport with the fee/rate methodologies for other inpatient programs which separately reimburse capital costs. In addition the admission review team provision in the residential rehabilitation services for youth section will be deleted. This is deletion is necessary because this provision was not approved as part of the federal approval of the Medicaid state plan amendment for residential services for youth.
3. Needs and Benefits:
The modification to the fee is necessitated by the expiration of the legislative “hold harmless” which assisted MSW providers with high capital costs which were not sufficiently reimbursed in the existing MSW fee by allowing those providers to use cost-based rates. These providers provide MSW services to almost 5,000 patients. Many of these providers will have to drastically cut or eliminate services endangering the health and safety of patients and the communities they serve. Many of these communities do not have alternative programs to serve these patients. The elimination of the admission review team provision in the RSY fee setting methodology is necessary to comply with the Medicaid state plan and essential to begin the certification of this new program model for youth. The elimination of the admission review team provision is necessary to comply with the Medicaid state plan. It should be noted that the admission review team will continue to operate with state funding.
4. Costs:
a. Costs to regulated parties.
Some providers who currently are covered by the hold harmless will see a reduction in revenues. However, implementation of the amendments to Part 841 will significantly reduce such loses.
b. Costs to the agency, state and local governments.
The state and local impact of the fee modification is estimated to be approximately $2.1 million annually of which 50% is state share and 50% is local share. These increases in Medicaid costs will be offset by elimination of the hold harmless which will provide an overall cost savings of $1.7 million. The savings will be 50% state and 50% local.
5. Local Government Mandates:
The proposed rule does not impose any new local government mandates.
6. Paperwork:
The proposed rule does not impose additional paperwork requirements.
7. Duplication:
The proposed rule does not duplicate of other state or federal regulations.
8. Alternatives:
The only alternative to the proposed regulation is to continue the hold harmless.
9. Federal Standards:
Federal standards governing Medicaid requirements for these services are currently incorporated into Part 841.
10. Compliance Schedule:
It is expected that full implementation of these Part 841 become effective for these providers retroactively upon the expiration of the hold harmless on April, 1 2007.
Regulatory Flexibility Analysis
1. Effect of Rule: The proposed amendments to 14 NYCRR Section 841.11 will affect inpatient medically supervised withdrawal services by their reimbursing capital costs on a program basis instead of through a fixed fee. Currently programs are paid an all inclusive fee which includes a capital component. This amendment would remove the capital component from the fee and each provider would have an individual capital add-on to their fee based upon their actual capital costs. This will also assist providers who no longer are covered by the hold harmless, particularly those providers with high capital costs. Local governments where the hold harmless programs are located will be impacted by this change in reimbursement methodology. The state and local impact of the fee modification is estimated to be approximately $2.1 million annually of which 50% is state share and 50% is local share. These increases in Medicaid costs will be offset by elimination of the hold harmless which will provide an overall cost savings of $1.7 million. The savings will be 50% state and 50% local.
The amendments to 14 NYCRR Section 841.11 will have no impact on small business or local governments. OASAS will reimburse all costs associated with the Admissions Review Team.
2. Compliance Requirements: Inpatient medically supervised withdrawal services will not be required to comply with any additional requirements. Existing cost reporting requirements will contain the data necessary to calculate the capital add-on. There will be no added compliance requirements resulting from the elimination of the Admission Review Team from the reimbursement methodology for Residential Rehabilitation Services for Youth.
3. Professional Services: There will be no additional requirements for professional services resulting from these amendments.
4. Compliance Costs: There will be no additional costs resulting from compliance with these amendments.
5. Economic and Technological Feasibility: Compliance with the recordkeeping and reporting requirements of the Part 841 amendments and Part 817 are not expected to have an economic impact or require any changes to technology for small businesses and government.
6. Minimizing Adverse Impact: There will be no adverse impact on residential rehabilitation services for youth providers or local governments. The capital add-on to the medically supervised inpatient withdrawal fees will not negatively impact any providers and will provide additional revenues to most providers.
7. Small Business and Local Government Participation: Since this is an emergency rule, small business and local governments have not participated in the rulemaking process.
Rural Area Flexibility Analysis
The proposed amendments do not impose any adverse impact on rural areas because none of the impacted inpatient medically supervised withdrawal services are located in rural areas. The amendments will have no impact on residential rehabilitation facilities for youth programs in rural areas.
Job Impact Statement
Nature of Impact: If the amendments to rate/fee setting methodology are not made and the hold harmless expires there could be a major impact to the fiscal viability of a number of inpatient medically supervised withdrawal service providers. This could result in job layoffs and/or program closures.
