Byron Mallott Lieutenant Governor State Capitol Juneau, Alaska 9981 I 907.465.3520 WWW.LTGOV.ALASKA.GOV

530 West 7'" Ave, Suite 1700 Anchorage, Alaska 99501

907.269.7460 L T.GOVERNOR@/\LASKA.GOV

TO:

FROM:

DATE:

RE:

OFFICE OF THE LIEUTENANT GOVERNOR ALASKA

MEMORANDUM

· 1 'riptaa Surve Department of Health & Social Services

Scott Meriwether, Office of the Lieutenant c.;.overnor ~ 465.4081 ~

August 21, 2017

Filed Permanent Regulations: Department of Health & Social Services

Department off lealth and Social Servcies regulations re: Medicaid coverage and payment, rate changes, cost containment, and the non-application of inflation adjustments for fiscal year 2018 (7 A.AC 130.260(c); 7 AAC 130.270(c)(4); 7 AAC 145.012(a); 7 AAC 145.0SO(b)(3),(4); 7 AAC 145.265(b); 7 AAC 145.SOO(b); 7 AAC 145.520(g)(1); 7 A.AC 145.700(b),(c); 7 AAC 145.720(a); 7 AAC 150.150(g); 7 AAC 150.160; 7 AAC 150.190(g))

Attorney General File:

Regulation Filed:

Eff ecrive Date:

Print:

JC'2017200200

8/21/2017

10/1/2017

223, October 201 7

cc with enclosures: Linda Miller, Department of Law Judy Herndon., 1.cxisNexis

ORDER ADOPTING CHANGES TO REGULATIONS OF THE DEPARTMENT OF HEALTH & SOCIAL SERVICES

The attached 9 pages of regulations, dealing with Medicaid rate changes, including cost containment measures through rate and ser.;ice reductions, no inflation rate for fiscal year 2018, and no rebasing for fiscal year 2018 for services that receive customary inflation, are adopted and certified to be a correct copy of the regulation changes that the Department of Health & Social Services adopts under the authority of AS 47.05.010, AS 47.07.020, AS 47.07.030, AS 47.07.036, AS 47.07.040, AS 47.07.070, AS 47.07.071, AS 47.07.073, AS 47.07.074, AS 47.20.060, AS 47.20.070, and AS 47.20.110, and after compliance with the Administrative Procedure Act (AS 44.62), specifically including notice under AS 44.62.190 and 44.62.200 and opportunity for public comment under AS 44.62.210.

This action is not expected to require an increased appropriation.

In considering public comments, the Department of Health & Social Services paid special attention to the cost to private persons of the regulatory action being taken.

The regulation changes adopted under this order take effect on October 1, 2017, as provided in AS 44.62.180.

Date: ·7- /2-·/ 7

/,1 1~~ &/Jon Sherwood

Deputy Commissioner Department of Health & Social Services

FILING CERTIFICATION

I, Byron Mallott. Lieutenant Governor for the State of Alaska, certify that1 on ~ Q \ 20..11': at~·· I filed the attached regulations according to the provisions of~ ~040- \ 44.62.120.

Effective:

Register:

Byron M o Lieutenan Governor

HEALTH AND SOCIAL SERVICES

7 AAC J 30.260(c) is amended to read:

(c) The (IF THE RECIPIENT OF DAY HABILITATION SERVICES IS ALSO

PROVIDED GROUP-HOME HABILITATION SERVICES UNDER 7 AAC I 30.265(f), THE]

department will not pay for more than 624 hours per year of any type [ 15 HOURS PER . . 'It. ..lk we. ,,_, 1--_,,._'L:'"_._• __ . ~ ~/J.f"" f 1'tll\t' I

WEEK] of day habilitation services from all providers combined, unless thc~DEPARTMENT ~~-'<.O.tj JU.t~)I)

@ETERMINES]. a roves a limited number of additional da habilitation hours that were ~ ~ ( 2..) c!,'.{x.(..t/~~ ~re uested in a reci ient's Ian of care aria ustified as necessa'tto rotect the reci icnt's

I ~~C13J) J._t;,.,vuU,)~") tt( ~.t. J health and safe and revent institutionalization [THAT THE RECIPIENT IS UNABLE

JAA~/J TO BENEFIT FRbM ANY OTHER COMMUNITY SERVICE OR ACTIVITIES].

(Eff. 2/ t/20 10, Register 193; am 7I l/20 13, Register 206; am~-'-' JO!J, Register 223 )

Authority: AS 47.05.010 AS 47.07.030 AS 47.07.040

-"1 AAC 139.27Q, Sttpported en:ipJoynient serviee~

The introductory language of? AAC 130.270(c)(4) is amended to read:

( 4) more than three months of services lUlder (b )( l ); J (3), or @!lf 4) or this

section during a recipient's term of eligibility for home and community-based waiver services,

unless the home and community-based waiver services provider demonstrates that the recipient ... . ,. (Eff. 2/1/2010, Register 193; am 7/1/2013, Register 206; am 7/1/2015, Register 214;

am .J!.j_/_IJ.0'7 , Register 1.f3)

Authority: AS 47.05.010 AS 47.07.030 AS 47.07.040

The introductory language of 7 AAC l45.012(a) is amended to read:

(a) To address that appropriations for fiscal year 2018 [2017] are insufficient to cover the

costs of medical assistance for all persons eligible under AS 47.07 and 7 AAC I 00, the

Register 22 ~ , 0c../J% 17 HEALTH AND SOCIAL SERVICES

department will implement cost containment measures that prohibit the following adjustments to

Medicaid payment rates for Medicaid claims with dates of services after June 30, 2017 [JUNE

30, 2016], and before July l, 2018 [JULY I, 2017]: .. . ~ (Eff. 7/112015, Register 215; am 7/1/2016, Register 219; am J}!_!_J_I ;lDIZ Register _lW

Authority: AS 47.05.0lO AS 47.07.030 AS 47.07.036

ttt "P-. •. b· o,. ~ _.on_ .•· ....,_, , -~ -,-: AS 47.07.020 ~ ~...MU~

tiUJJJ(c)../ ~ 1-<hLI i AAC.. f\.f S".-6f"<!llLb)C L{)_, . .iloa ~D ~~),> ~ ::J:1;;. "CV\oliJ utv~.()~-;;;~ l 7 AAC 145. OSO(b )(3) is amended to read: ""-<.<oL f '7 A A e. I~.>. 6 5<> ( b) (Z). J» J,;, +.ut by re.fu-Vl ~ a conversion factor (CF), that is a dollar amount used to conve11 new and

(J1- \!.! ~ tn /\A <!., ~(,.u .f~J

existing CPT and HCPCS codes~escribed in this subsectio1 into a fee amount; this conversion /I ~

factor as of July l, 2017J [DECEMBER l, 201 lJ is $40.573 [$45.90]; the CF will be adjust~d

effective July 1. 2017, [DECEMBER I, 2011] and annually thereafter on July 1 so that an

adjustment provision results in an overall average net change for all procedures described in this

subsection that equals the percent change from the previous year in the most recent annual

Consumer Price Index.for all Urban Consumers (CPl-U), all items, for Anchorage, Alaska

published by the United States Department of Labor, Bureau of Labor Statistics, adopted by

reference in 7 AAC 160.900; the department will announce and post the CF adjusted under this

paragraph at the depattment's Internet website or at a designated contractor's Internet website.i

2

HEALTH AND SOCIAL SERVICES

(Eff. 211120 I 0, Register 193; am 12/1/2011, Register 200; am 5/l l/2012, Register 202; am

312212014, Register 209; am_j!.)_1_1~017, .Register 2Z3 )

Authority: AS 47.05.0IO AS 47.07.030 AS 47.07.040 tlt~~;'s;) ~~~1'., wf ""1-W 7 AAC l'is.us- (b)(1~), ~ c),... ~ .L., .~ "1,· u:t. ~

7 AAC 145.265 b) is amended by adding a new para r,a h to read: ~ . .I -rr;~r.... I 'ts. :U:s-(t.)Cq) ~ olep4 rtl'UZf'i- w ill nof- a..ff> I • lt.t:XJv!.~ ,u_:;,ribe.nl vi"' 7 ..:t;;. o..,

(10) for s late fiscal year 2018, the inflation . in (9) of this subsection 0 ~.)))

~Got be appliea .

(Eff. 2/l /20 I 0, Register 193; am /0 /_/_/ ~017 , Register .E.3.)

Authority: AS 47.05.010 AS 47.07.040 AS 47.20.070

AS 47.07.030 AS 47.20.060 AS 47.20.110

7 AAC 145.SOO(b) is amended to read:

(b) Each July l, rates established in the Chart of Personal Care Attendant and Waiver

Services Rates will be adjusted as provided in 7 AAC 145.520(g). For state fisca l year 2018, h.t. ~J><lf~ tvVit w \ll '\o: •'- I ~(tt~j~J~ : ' u:d·~t .J.e.sr..ribu:t j 11 ; 111\C /../$ . S°;td(_g Xi).

e mflat1on

(Eff. 2/1/2010, Register 193; am 3/1/2011, Register 197; am 8/18/2015, Register 215;

am _12_/_I_! ;.017 , Register .fil)

Authority: AS 47.05.010 AS 47.07.030 AS 47.07.040

7 AAC l 45.520(g)(l) is amended to read:

{{,( ~ ~ 0 ·> '' ~J.Jl ~ (1) the depaiiment will first adjust the rates for inflation, using the CMS

Home Health Agency Market Basket in the most recent quarterly publication of Global Insight's

3

1-ker Register 2.2 ~ , ~ 2017 HEALTH AND SOCIAL SERVICES

:tt.l.l~· ~ .M ».., .J ~hwAt 1.<.1; 11 n.<.l't CL.~f>iLJ ....,...__ l~Ud../ v

o--J.M.v,....t;;1->Healthcare Cost Review available 60 days before July I; for state fiscal year 20t8:'the inflation ~;) d ·~

(tl /----? ~Q.d;c,~+f\<JU\. "t QIO~scr~ ~ Jl 1.;t.!.d. . jefere11ced j11 in this paragrapb~iU Bet he eppli&d; ~ ; -.-- ~...t.x..U.J ,A,.,LJA~t..,))/ -(Eff. 2/1/2010, Register 193; am 3/l/20l l, Register 197; am 4/1/2012, Register 201; am

7/112013, Register 206; am 1/1/2014, Register 208; am 7/1/2015, Register 214; am 8/18/2015,

Register 2 15; am J!j _j_f <AO 17, Register 221 )

Authority: AS 47.05.0lO AS 47.07.030 AS 47.07.040

7 AAC l45.700(b) is amended to read:

(b) Unless the department and a health clinic make an agreement for the department to

'"~ ~ - pay the clinic at the rates calculated under (g) of this section, the department will pay the clinic ~))/

.Ji. in accordance with 42 U.S.C. I 396a(bb)(1) - (5), adopted by reference in 7 AAC 160.900. For l.I:_k o4ev-tl«QA't UJiTI "''A- a.-.d .. j '->s f,i ,. 1nflo...Tio11

s tate fiscal year 1 , the payment rate under tltis subsectionrwill net ~e adjusted fer 4 0 .

.in.fl&tie~ - (a 1>~/~~ .):L.. ~)J)

7 AAC L45.700(c)(2)(A) is amended to read: ;} . .i;- «1 <~ O'\U-. (), c; .. ..t-a.b .)/)

(ll ..QJOl.a jµ,u..:~- ~, ~j~JJJ H~o.Hh c.tAl~ -f-- (A) increased in that fiscal year by using the first qua11er publication of

fr.. c r " G lobal Insight's !Health-Car~ Cost Review, Skilled Nursin Facility Total Market Basket for ~C1'lN!. . ... )' ,Al7 tt<C6(>,,.J)J fJr.~~~fJ 1iv2. k p"""h<t..tA.t w1l1 no\- r~·J~~ ·for i"fl"'"i·l<:'> I\ ~ yearly adjustment factors applied to health clinics; for state fiscal year 2018,, the payment ra c ~ ..AA~) ) under this subparagraphr"viJI 11gt b0 adjusted fur inflation;. and :a MJ. /. l ~ c.a fxrUJ ~ M .J~ JV

~ iA~'~®cJ ·ciy C(J'\~.'.l°'o/" of

7 AAC 145.700(c)(3) is amended to read:

(3) the payment rate calculated under this subsection must result in a payment to

the health clinic that is equal to or greater than the amount required to be paid to the clinic under

4

r L.~..­Register 22 3> ,~201 7 HEAL TH AND SOCIAL SERVICES

42 U.S.C. l 396a(bb)(l) - (6), adopted by reference in 7 AAC 160.900; if the payment rate

calculated under this subsection is less than that amount. the department will pay the health clinic ~ c4 or ~+ v..>\ I n · ·"-""'-· vst for i "f'\ Q.3-1 of\ ~ _... cc. ~J ~)}

un er (b) of 1s section; or state fiscal ear 2018 he a meat rate under A ~B of

tbis paragraph:Jt¥ill llot be adjnst.ed f6r ittflaaouito ensure compliance with this paragraph, l.. -- 41' ..R.,~ ;.,.....,,_~ .11J

the department will evaluate annually the

... (Eff. 2/ 1/2010, Register 193; am /D/!_j)Oll , Register 223 )

Authority: AS 47.05.010 AS 47.07.040 AS 47.07.073

AS 47.07.030 AS 47.07.070

7 AAC 145.720(a) is amended to read:

(a) The base years used to establish rates in future rate years for a rural health clinic or

this section and whether and when to conduct an audit. The department

(1) will perform a re-basing no less than every four years£n~ ] ""t. t£{~.JJJ

(2) may perform a re-basing sooner than every four years.;. tttU.at.;~-.xm... ~./)J~(::;:) ""

(3) will not implcmenf if asing for state fiscal year 2018; jl-@.e. (a~/~ J) tll~/ .......... ~ ~ ~J> · (4) will not apply {3) of this subsection to facilities that are currently under a

'"' - ,... ~ - ~/~.J1J uc.fb.o<Y../~ ~ ~;;) state wei hted avera e that are scheduled to have their first cost ased rate established in

state fiscal year 20l(i5ca11se a facil.it¥ receiving its first cost based rate is net ~easid4lred as--

being re hase~

(Eff. 2/ l /2010, Register l93; am J2.j_l_/J.<>t7 , Register l:!lJ

5

1 Ler-Register~~ 2017 HEALTH AND SOCIAL SERVICES

Authority: AS 47.05.010 AS 47.07.073 AS 47.07.074

AS 47.07.070

7 AAC 150.150 is amended by adding a new subsection to read: ';kti. J.t..p co.rl rv.v-f ....... ~ 11 "cJ} ~ tJrt for lnf'I~ ti ••I'-.. /;;:') {.;";:)

(g) For state fiscal year 201 8, tie nontcapital ~capital components of the payment rate c..... (!)

~ll not-be adjusted for ifltlatio.11. .,. 'S/' ~ ----~ff. 2/l /20 I 0, Register l 93; am __iEJ_I_/ ~ Register 223 )

Authority: AS 47.05.010 AS 47.07.071 AS 47.07.073

AS 47.07.070

7 AAC 150. l 60(a)(4) is amended to read:

"'{a) The El~a11men1 will use the follewiflg methodology aae criteria iR nwiewiag aacl.Y

"'eStablishing prospective p~s fer t-he-Medieaicl progi:an~ ~ t«l'f~; ~ ~c.:t,d .;t;..x.:t-.{ 7 A/J.C. >s-o. ll.o(<L).M "-'AA..~· )})

( 4) for all facilities, except facilities with rate agreements established under 7

4 AAC · 150.190, the department ({~ o.~; , ;;:;;.)))Ir (A) will perform a re-basing for the first fiscal year beginning after

notification to the facilities that a re-basing will be done;

~I +- (B) will perform a re-basing no less than every four years; [AND]

~~~ ,,-> I ..!!-- (C) may perfonn a re-basing sooner than every four years;. ~~ f ~ ~ 1 ~ (D) will not implement re-basing for state fiscal year 2018; ~

, I ;---- (E) will not appl! (D) of this pa.-agraph t.o facilities that are curre~ "' ..:.. - :; ..::. : ~ -----(et.~j~ I~

under a swin bed rate or a state wei hted avera e that are scheduled to have their first

,.. Lb<=...-Register 2b:L, ~ 2017 HEALTH AND SOCIAL SERVICES

:_-' ..:::... :;"1!-(tt.U~J~~~11 cost based rate e tablished in state fiscal ear 201

? uthorlty: A~ 47.05.010 l\S 47. tl7 .0~ 14 "P~; '-;; ~ ~

~.f~ 7AA~ J$0. 1 c.oc:t·~x:io), ~cl~

7 AAC l 50. I 60(b) is amended by adding a new paragraph to read: cttu_ ~,J_ • ..;t J1U._ -~cto (i$J <>'? 7 A AC. )~ 0 . 16''> (b )(9 ~ ,J.:i: a_.

( 10) in state fiscal ear 2018 the payment rate~e s0t ltt 95 percent of the ~~.A) G\. ·o ... .: . .'i l;ty 0 ?syc r ic

rate calculated in (I) - (9) of this su sec 10n; licensed a' specialized hospitalr ~ (ffu: -krwf~+ l'U'fo.Asib le. fo r lk~..11.s,";}) J..ui,~-0 ~ thefffiHe division ~health care services, H~ Facilities.LiGensing Certifieation List, .9--'

o< ~ (P~~r~~ " .1pdau:d Ap1:i I 2017 exempt from this Ji·~~on and wiH be reimbursed at 100 percent of

the rate calculated in ( l) - (9) of this subsection.

{tt"'f'~ 1 ':f., *AJ.. ~ "'.-,,...JWJ 7 AAC /So . I C.ol'.c.~ ( 7))~~<r-­~~~ ...X ..J1U. ...u-<.oLo-(- 7 AA<:..., ls-0 . 1(,0(<.)(G.) _,to~~.~.~

7 AAC J 50. l60(c) is amended by adding a new paragraph to read:

(7) in state fiscal year 2018, the payment rate ~ 95 percent of the

rate calculated in (1)-(6) of this subsection.

7 AAC 150.160(h) is amended to read:

(h) The department will determine a rate of payment for ambulatory surgical centers

based on the federal Medicare ambulatory surgical center payment rates for federal fiscal year

2000, adopted by reference in 7 AAC l 60. 900, and as adjusted annually by the adjustment

7

Register 223 , QJ"Dh~~17 HEAL TH AND SOCIAL SERVICES

..... ttt.txr<ct /-<AM~.);) factors in 7 AAC 150.150. !Jll!ll ..[St~a~te~fi!!1~sc~a!!.l l:£lC.a!!.!•G· 2f,!OlJJ~8~~~ml~:.!!!@...~~~tt!!!·J9~S~e:rr£!Ce~n!!t

of the rate calculated in in this subsection.

(Eff 2/1 /20l0, Register 193; am JE.j_ f I ).()f7, Register fil)

Authority: AS 47.05.010 AS 47.07.070

7 AAC 150.190(g)(l) is amended to read:

(I) the first year payment rate for inpatient acute care services will be expressed

as a per-day rate calculated under 7 AAC 150.160(b ); for each complete fiscal year of the small

facility that begins during the period after the first payment year of the rate agreement made

under ( d) of this section and that ends at the expiration of the rate agreement, the first year

payment rate will be increased by updating the noncapital portion of the payment rate annually at

the rate of three percent per year and by updating the capital portion of the payment rate annually OlepAr r«V\ (.,_) 1 n.o t;A.ppl

at the rate of 1.1 percent per year,:· f~o~r~s~ta~t~eJfi~1s~c!alLy~e~aur~OUlJ8~, ~th~ej~~@~~~~filifil~~r~

paragrapl).tv.ill i:aot be applied; ·

j_ ~· cu. Jlxr<A. j~ N

7 AAC l 50. l 90(g)(3) is amended to read:

(3) a first year payment rate for long-term care will be expressed as a per-day rate

as calculated in 7 AAC l 50.160(e); for each complete fiscal year of the small facility that begins

during the period after the first payment year of the rate agreement made under (d) of this section

and that ends at the expiration of the rate agreement, the first year payment rate will be increased

by updating the noncapital portion of the payment rate annually at the rate of three percent per

year and by updating the capital portion of the payment rate annually at the rate of 1.1 percent

8

J.. be• Register '2:.2-3 , ~ 2017 HEALTH AND SOCIAL SERVICES <>krarh~uvd w~ll n..ot' u..pp~y ~~ ~~ i.l\ue.Q...'>e,.s olt.sa;~~ fttJl><1~/..t....<-~)A) per year; fol· state 1scal car 2018 the · m this ara ·a

(Eff. 2/1/2010, Register 193; am /0 1_1_1~017 , Register 223 )

Authority: AS 47.05.010 AS 47.07.071 AS 47.07.073

AS 47.07.070

9