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Virginia Administrative Code
Title 12. Health
Agency 30. Department of Medical Assistance Services
Chapter 70. Methods and Standards for Establishing Payment Rates; In-Patient Hospital Care
12/22/2024

12VAC30-70-425. Supplemental payments for non-state-government-owned hospitals for inpatient services.

A. In addition to payments made elsewhere, effective July 1, 2005, DMAS shall draw down federal funds to cover unreimbursed Medicaid costs for inpatient services provided by non-state-government-owned hospitals as certified by the provider through cost reports.

B. A non-state-government-owned hospital is owned or operated by a unit of government other than a state.

C. Effective July 1, 2018, additional supplemental payments will be issued to each non-state-government-owned acute care hospital for inpatient services provided to Medicaid patients.

1. The supplemental payment shall equal inpatient hospital clam payments times the upper payment limit (UPL) gap percentage.

a. The annual UPL gap percentage is the percentage calculated where the numerator is the difference for each non-state-government-owned acute care hospital between a reasonable estimate of the amount that would be paid under Medicare payment principles for inpatient hospital services provided to Medicaid patients, as calculated in accordance with 42 CFR 447.272, and what Medicaid paid for such services, and the denominator is Medicaid claim payments to each hospital for inpatient hospital services provided to Medicaid patients in the same years used in the numerator.

b. The UPL gap percentage will be calculated annually for each hospital using data for the most recent year for which comprehensive annual data are available and inflated to the state fiscal year for which payments are to be made.

c. Maximum aggregate payments to all qualifying hospitals shall not exceed the available upper payment limit. If inpatient payments for non-state-government-owned hospitals would exceed the upper payment limit, the numerator in the calculation of the UPL gap percentage shall be reduced proportionately.

2. After the close of each quarter, beginning with the July 1, 2018, to September 30, 2018, quarter, each qualifying hospital shall receive supplemental payments for the inpatient services paid during the prior quarter. The supplemental payments for each qualifying hospital for each quarter shall be calculated by multiplying the Medicaid inpatient hospital payments paid in that quarter by the annual UPL gap percentage for each hospital.

Statutory Authority

§ 32.1-325 of the Code of Virginia; 42 USC § 1396 et seq.

Historical Notes

Derived from Virginia Register Volume 20, Issue 8, eff. January 28, 2004; amended, Virginia Register Volume 22, Issue 23, eff. August 23, 2006; Volume 36, Issue 11, eff. March 5, 2020.

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