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016.06.20-250.301. Definitions of Important Terms.

AR ADC 016.06.20-250.301Arkansas Administrative Code

West's Arkansas Administrative Code
Title 016. Department of Human Services
Division 06. Division of Medical Services
Rule 20. Hospital/Critical Access Hospital (CAH)/End-Stage Renal Disease (ESRD) Provider Manual (Refs & Annos)
Section 250.000. Reimbursement.
Ark. Admin. Code 016.06.20-250.301
016.06.20-250.301. Definitions of Important Terms.
Currentness
A. A hospital's rural or urban status determines which qualifying criteria to apply to a particular hospital's data.
1. A hospital located within a Metropolitan Statistical Area (MSA), as determined by the Executive Office of Management and Budget, is an urban hospital.
2. A hospital located outside an MSA is a rural hospital.
B. In the disproportionate share payment calculation to follow, the term “Medicaid day(s)” shall have one meaning only. Its meaning shall be in accordance with government regulators' interpretation of the following expression excerpted from Section 1923(b) of the Social Security Act in its instructions for calculating the Medicaid inpatient utilization rate and the low-income utilization rate: “...eligible for medical assistance under (an approved Medicaid) State plan...”
1. A Medicaid day is a day on which an individual receives inpatient services from a hospital and is “...eligible for medical assistance under (an approved Medicaid) State plan...”
a. The individual's eligibility for Medicaid is concurrent with all or part of one or more inpatient stays and is on file with the state during the time of the individual's inpatient stay, or
b. A retroactively determined period of Medicaid eligibility is concurrent with all or part of one or more inpatient stays.
2. Whether Medicaid makes any payment to the hospital is immaterial to whether the patient is eligible for Medicaid.
a. The relationship of the individual's eligibility is solely to the days that the individual receives services from the hospital. (For example, if a patient is eligible for Medicaid, but all of the current stay is beyond his or her inpatient benefit limit, the patient is still “...eligible for medical assistance.” Related charge or cost data is handled accordingly, per instructions.)
b. Charges for inpatient services on days on which an individual has no Medicaid eligibility and no source of payment are included as charity care. (See part C, below, for the definition of charity care.)
3. Individuals dually eligible for Medicare Part A and Medicaid are considered not to be “...eligible for medical assistance under (an approved Medicaid) State plan...” for the purposes of these calculations.
4. Aid Categories 03 and 04 (listed on an eligibility verification transaction response after “AID CATEGORY CODE”) are not Arkansas Medical Assistance categories of eligibility and are so noted on the eligibility verification response. Charges for services for individuals who are on file with the State under Aid Categories 03 and 04 and who have no source of payment are entered under charity care.
5. Aid category 69 is a family planning category of eligibility. Women eligible in this category may receive only family planning services, and this restriction is noted on the eligibility verification response. The hospital may consider an individual in this category as Medicaid-eligible only with respect to outpatient family planning services. Individuals in this category are never considered “...eligible for medical assistance under (an approved Medicaid) State plan...” for purposes related to disproportionate share payments.
C. Charity care is care provided to individuals who have no source of payment and are “not eligible for medical assistance under (an approved Medicaid) State plan.”
1. Charges for services not covered by an individual's insurance and which the individual is unable to pay are included in charity care even if the individual's insurance has paid on other services that it does cover.
2. Charges for services on days on which the individual has no Medicaid eligibility and no source of payment are included as charity care.
3. Charges attributable to charity care do not include contractual allowances and discounts.
a. The hospital may not add to charity-care charges the amounts discounted or written off as a result of arrangements made with payers such as HMOs, Medicare or indemnity plans.
b. Charges unpaid due to Arkansas Medicaid policies that limit payments, such as benefit limits, caps on transplant reimbursement, upper limits on payments, etc., are not included in charity care. These amounts comprise “Medicaid shortfall” and are addressed later in the disproportionate share payment process.
D. A standard deviation is a common statistical tool. It is one of several indices of variability used to characterize dispersions among measures in a given population.
1. With respect to disproportionate share payments, the standard deviation is a number derived from the difference (or variance) among the rates at which the population of Medicaid-eligible inpatients uses the services of individual in-state hospitals.
2. The standard deviation is used to evaluate the difference between the utilization rate of a single hospital and the average utilization rate for all hospitals in the sample.
E. An inpatient day, in the context of disproportionate share payment eligibility, is any day “...in which an individual (including a newborn) is an inpatient in the hospital, whether or not the individual is in a specialized ward and whether or not the individual remains in the hospital for lack of suitable placement elsewhere.”
F. The Medicaid inpatient utilization rate represents service utilization by the Medicaid-eligible population in the form of a fraction of the total utilization of the hospital's services.
1. It is calculated by dividing the number of Medicaid days during the cost reporting period (as defined above in part B) by the total number of the hospital's inpatient days (as defined directly above in part E).
2. Hospital E has 4014 inpatient days in its fiscal year 2004. Of those inpatient days, Arkansas Medicaid covered 437.
437 / 4014 = 0.1089
3. Hospital E's Medicaid Inpatient Utilization Rate for fiscal year 2004 is 0.1089.
G. The low-income utilization rate is a fraction expressed as a percentage that is determined by adding together the following two calculated quotients:
1. Quotient 1 calculation:
a. Total Medicaid inpatient receipts/income paid to the hospital plus total inpatient cash subsidies received directly from state and/or local governments divided by
b. The total amount of receipts/income received for inpatient services.
2. Quotient 2 calculation:
a. Total hospital inpatient charges attributable to charity care less total inpatient cash subsidies received directly from state and/or local government, divided by
b. Total hospital inpatient charges. Calculation of low-income utilization rate Example:
1.) For cost reporting year 2004, Hospital E has Medicaid income/receipts of $ 1,613,412, out of total hospital inpatient income/receipts of $ 5,413,891. The county has granted a $ 500,000 cash subsidy to Hospital E. Of this $ 500,000 subsidy, $ 300,000 is for inpatient services.
2.) In the same cost reporting year Hospital E's total charges for all inpatient services are $ 9,222,117, of which $ 1,842,336 is attributable to charity care.
Medicaid revenue:
$ 1,613,412
Add inpatient cash subsidy:
+ 300,000
Total
$ 1,913,412
Divide by total inpatient income/receipts:
+ $ 5,413,891
Quotient 1 =
0.3534
Charity care charges:
$ 1,842,336
Less inpatient cash subsidy:
300,000
Total uncovered charity care:
$ 1,542,336
Divide by total inpatient charges:
+ $ 9,222,117
Quotient 2=
0.1672
Quotient 1
0.3534
Quotient 2
+ 0.1672
Sum =
0.5206
Rounded, expressed as a percentage:
52%
3.) Hospital E's low-income utilization rate for fiscal year 2004 is 52%.

Credits

Eff. Oct. 13, 2003.
<Editor’s Note: Nonfunctioning links so in original.>
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 016.06.20-250.301, AR ADC 016.06.20-250.301
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