Final Notice Of Action

PUBLIC NOTICE
FINAL NOTICE of ACTION
SOUTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES
Payment to Medicaid Providers Reduced and Beneficiary Co-payments Increased July 11, 2011
The South Carolina Department of Health and Human Services (SCDHHS), as required by
Federal Regulations of Title 42 Part 447 Section 205, gives final notice of the following actions
regarding its methods and standards for paying providers and beneficiary cost sharing under the
State Plan under Title XIX of the Social Security Act Medical Assistance Program (Medicaid).
SCDHHS estimates that combined with the April 8, 2011 3% rate reduction , these changes will
help maintain expenditures within appropriated funds during State Fiscal Year 2012. The
agency is confident that there will be sufficient reimbursement to provide adequate access to
care. Public Notice of proposed changes was published June 6, 2011. Comments were
accepted and considered through 5:00 p.m. on July 6, 2011. Any Medicaid service described
that is provided by state agencies will not be impacted unless noted.
SCDHHS has actively engaged providers in discussions concerning the Medicaid budget
shortfalls during this and upcoming budget cycles. The agency has provided meeting
opportunities to discuss and gather input on ways to address the need to reduce expenditures
but continue to provide quality care. No adverse effect on available care for the Medicaid
population is expected, but SCDHHS will monitor the impact of any changes. Because capitation
premiums to the managed care plans are based on fee-for-service (FFS) rates, these
adjustments will also reflect cost savings in managed care initiatives. As a result of all of these
actions, total annual Medicaid expenditures are expected to decrease by approximately $233
million.
Non-institutional Rate Reductions
The reductions in this notice are in addition to the 3% reduction providers incurred on April 8,
2011. Effective for services provided on or after July 11, 2011, SCDHHS will reduce provider
payments by the aggregate of the April 8 reductions and those indicated below.
Children’s Personal Care (see Home and Community Based Waiver Services)
Clinic Services
4% rate reduction (does not include FQHCs and RHCs) For a complete listing of clinic
provider types refer to Information for Providers at www.scdhhs.gov.
Dental Services
3% rate reduction (including any waiver services offered by these providers)
Durable Medical Equipment
Expenditure reductions taken through updated state specific fee schedule
Home and Community Based Waiver Services (includes waivers operated by both SCDHHS and
the SC Department of Disabilities and Special Needs)
2% rate reduction for the following services: Case Management, Personal Care I,
Personal Care II (including State Plan Children’s Personal Care), Attendant Care
(including Head and Spinal Cord Injury Waiver Attendant Care), Companion, Private
Duty Nursing (including State Plan and enhanced nursing for children), Adult Day Care,
Adult Day Care Transportation, Adult Day Care Nursing, Adult Care Home, Home
Delivered Meals, Bath Safety items, Pest Control, Telemonitoring, Environmental
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Modifications (payment will be reduced from 97% to 95% of billed/authorized amount),
Nutritional Supplements (payment will be reduced from 97% to 95% of billed/authorized
amount), Specialized Supplies and Equipment (payment will be reduced from 97% to
95% of billed/authorized amount), Care Coordination, and Pediatric Medical Day Care
35% reduction taken through updated incontinence supplies fee schedule based on the
discontinuation of the bid process
The rate for the Personal Emergency Response Service (PERS) will be reduced to $30
for both installation and monthly monitoring
Home Health Services
4% rate reduction
Integrated Personal Care (Personal Care Aides in a community residential care facility)
7% rate reduction
Lab and X-ray
7 % rate reduction
Medical Professionals (including any waiver services offered by these providers)
Podiatrist, Audiologist, Speech, Physical and Occupational Therapist, Licensed
Independent Professional/Behavioral Health providers, Psychologist, Chiropractor - 7%
rate reduction
Optometrist - 5% rate reduction (based on state regulations requiring parity with
Ophthalmologist)
CRNA – 3% reduction reflected from Anesthesiologist rate
Nurse Practitioner, Nurse Midwife and Licensed Nurse Midwife – reduction reflected as a
percentage of applicable physician rate
Non-Broker Provided Transportation
4% rate reduction
Pharmacy Services
Reduce reimbursement from AWP minus 13% to AWP minus 16% (including waiver
prescription medications)
Reduce dispensing fee from $4.05 to $3.00 (including waiver prescription dispensing
fees)
Physician Services
Pediatric Subspecialist, excluding Neonatologist – 2% rate reduction
Reduce Labor and Delivery reimbursement from $1164 to $1100 for Vaginal delivery and
$1000 for C-section delivery
Family Practice, General Practice, Osteopath, Internal Medicine, Pediatrics, Geriatrics, -
2% rate reduction
Anesthesiologist – 3% rate reduction
All other physicians, excluding Obstetrics, OB/GYN, Maternal Fetal Medicine - 5% rate
reduction
EPSDT Well Visit codes – 2% rate reduction
Private Duty Nursing (see Home and Community Based Waiver Services)
Inpatient/Outpatient Hospital Rate Reductions
For inpatient hospital discharges occurring and outpatient hospital services provided on or after
July 11, 2011, SCDHHS takes the following actions to ensure that inpatient and outpatient
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hospital expenditures remain within budgeted funds during State Fiscal Year 2012. These
actions will not impact Medicaid inpatient and outpatient hospital services provided by qualifying
burn intensive care unit hospitals, critical access hospitals, isolated rural, small rural and certain
large rural hospitals as defined by Rural/Urban Commuting Area (RUCA) classes. These large
rural hospitals must also be located in a Health Professional Shortage Area (HPSA) for primary
care for total population.
Inpatient Hospital Specific Per Discharge Rates
Inpatient hospital specific per discharge rates for the following hospitals will be reduced
to 93% of the October 1, 2010 per discharge rate:
o Private general acute care hospitals,
o Non-profit general acute care hospitals,
o Non-state owned governmental SC general acute care hospitals, and
o Out of state border hospitals with SC Medicaid inpatient utilization of at least 200
inpatient claims (per the hospital’s 2006 base year cost report).
All other SC non-general acute care hospitals and out-of-state contracting hospitals that
receive the SC statewide average per discharge rate will receive a rate reduced to 93%
of the October 1, 2010 SC statewide average per discharge rate.
Hospital Specific Inpatient Per Diem Multipliers
While there will be no update to the statewide per diem rates, the hospital specific per
diem multipliers for qualifying hospitals will be reduced to 93% of the October 1, 2010
hospital specific inpatient per diem multipliers.
All hospitals receiving a hospital specific per diem multiplier of 0.97 will have its per diem
multiplier reduced to 0.93.
Inpatient Hospital Retrospective Cost Settlements
Retrospective cost settlements will continue to be made for qualifying hospitals but will
be limited to 93% of allowable Medicaid reimbursable costs for discharges occurring on
or after July 11, 2011.
Private and non-profit Long Term Psychiatric Hospitals
Inpatient per diem rates will be reduced to 93% of the October 1, 2010 per diem rate.
Outpatient Hospital Specific Multipliers
While there will be no update to the October 1, 2007 SC Medicaid outpatient hospital fee
schedule rates, the hospital specific outpatient multipliers will be reduced to 93% of the
October 1, 2010 outpatient multipliers.
All hospitals receiving a hospital specific outpatient multiplier of 0.97 will have its
outpatient multiplier reduced to 0.93.
Outpatient Hospital Retrospective Cost Settlements
Retrospective cost settlements will continue to be made for qualifying hospitals but will
be limited to 93% of allowable Medicaid reimbursable costs for services provided on or
after July 11, 2011.
Outpatient Hospital Clinical Lab Services
Outpatient hospital clinical lab services will be reimbursed at 90% of the 2010 Medicare
Clinical Lab Fee Schedule rates.
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Other Actions
Due to a proviso ending June 30, 2011 the largest teaching hospital in the state will be
subject to the same inpatient and outpatient hospital rate/multiplier reductions.
SCDHHS will eliminate payment for Hospital Acquired Conditions per federal regulations.
SCDHHS will discontinue reimbursing out of state border hospitals for graduate medical
education (direct and indirect medical education) costs relating to intern/resident
programs as well as direct medical education costs related to allied health programs and
will adjust inpatient per discharge rates, per diem multipliers and outpatient multipliers
accordingly.
SCDHHS will reduce graduate medical education (direct and indirect) costs for SC
teaching hospitals (including intern/reside nt and allied health programs) by 10% and
adjust inpatient per discharge rates, per diem multipliers and outpatient multipliers
accordingly. Cost settlements will be adjusted accordingly for inpatient discharges and
outpatient hospital services to account for the reduction in allowable graduate medical
education costs.
Nursing Facility and Intermediate Care Facilities for the Mentally Retarded (ICF-MR) Rate
Reductions
Effective for services provided on or after July 11, 2011, SCDHHS will amend the payment
methodology for hospice room and board services provided in nursing and ICF-MR facilities by
reimbursing at 95% of the April 8, 2011 payment rates.
As a result of the action relating to the reduction in the hospice room and board payment for
services provided in all nursing facilities on or after July 11, 2011, the weighted average rate is
projected to be $144.13. The weighted average April 8, 2011 rate was $148.69. This represents
a weighted average per diem decrease of $4.56 per Medicaid patient day or a 3.07% decrease.
As a result of the action relating to the reduction in the hospice room and board payment for
services provided in ICF-MR on or after July 11, 2011, the weighted average rate is projected to
be $270.41. The weighted average April 8, 2011 rate was $278.95. This represents a weighted
average per diem decrease of $8.54 per Medicaid patient day or a 3.06% decrease.
Increase in Co-payment
SCDHHS will increase the beneficiary co-payment amount of $2.30 to $3.30 for the following
services:
Doctor office visits
Home Health visits
Clinic visits
Optometrist visits
All other copayment amounts will remain the same. Co-payments do not apply to persons under 19
years of age.
Effective July 11, 2011, persons age 19 and older who are enrolled in a Medical Home Network
must make a co-payment for their medical services according to established policy.
Beneficiaries may contact toll free 1-888-549-0820 with questions regarding co-payments.
Services Provided When There Is Third Party Coverage Including Medicare
In addition to the reimbursement changes above, e ffective for claims received on or after August
1, 2011, SCDHHS will update the method and standard for payment of professional claims with
third party coverage including Medicare. The Medicaid payment will be the Medicaid allowed
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amount less the amount paid by the third party. If the provider has contracted to accept an
amount less than the Medicaid allowed or the provider files an assigned claim for a dual eligible
recipient, the Medicaid payment may not exceed the sum of the third party coinsurance and
deductible.
Copies of this notice are available for public review at each County Department of Health and
Human Services Office and www.scdhhs.gov. Written comments submitted to the prior notice of
proposed changes may be reviewed at www.scdhhs.gov or at the Department of Health and
Human Services, Division of Acute Care Reimbursement, 1813 Main Street, Columbia, South
Carolina, Monday through Friday between the hours of 9:00 a.m. and 5:00 p.m

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