DHS proposes Medicaid changes: formula payment increases, mandatory CMS reporting and extended appeal window

The Administrative Rules Subcommittee reviewed a package of Department of Human Services Division of Medical Services rule changes affecting Medicaid provider payments, reporting and appeals timelines and approved the rules that were presented.

Elizabeth Pittman, Division of Medical Services, said an increase to specialized-formula payment rates and unbundling of supply billing was needed after providers and hospitals reported rates were not covering costs. Pittman said the change results in a total fiscal impact of $1,700,000, of which $504,000 is the state share, to increase payments to providers for specialized formulas and associated supplies. "This unbundles those, allows them to bill for them separately and sets them according to Medicare rates," Pittman said.

Pittman also described mandatory reporting of CMS's core-set quality metrics (children and adults) effective Jan. 1, 2024; the state had previously reported voluntarily. She said the Division is attesting in the state plan to report metrics as required by CMS. Separately, the division proposed a change to Medicaid provider manuals to extend the appeal window for beneficiaries from 10 to 35 days to comply with federal regulations and a settlement from a federal lawsuit. Pittman said that change carries a fiscal impact the department estimated at $40,700,000 total, of which $6,000,000 will be the state's share; she described the change as required for compliance with federal rules. The hospice coding change to identify facility vs. nonfacility hospice admissions had no fiscal impact and drew no comments.

Committee members asked clarifying budget questions; Pittman provided the $1.7 million and $504,000 figures for specialized formulas. The package of rules was reviewed and approved without objection.