Md. Code Regs. 10.37.10.06 - Application for Alternative Method of Rate Determination

A. At any time on or after July 1, 1974, a hospital may file a written application with the Commission requesting an alternative method for submitting or reviewing any or all of its rates and charges, specifying the reasons for and details of the alternative methods.

B. If warranted by the circumstances set forth in the application, the Executive Director may grant a temporary approval of an alternative method of rate determination.

C. The procedure for submitting and reviewing an application under an alternative method of rate determination shall follow as closely as possible the procedure for a regular rate application, except that the time periods and limitations set forth in these regulations do not apply to an application for an alternative method of rate determination.

D. At anytime after the approval of an alternative method of rate review by the Executive Director, the Commission may initiate further proceedings to determine the hospital's continuing qualification for the alternative method of rate determination.

E. ARM System.

(1) The Commission may implement a system providing for alternative rate setting methods (ARM) which would permit hospitals to accept financial risk for the provision of hospital services under certain conditions and circumstances.

(2) The implementation of an ARM system shall be consistent with the principles of equity and access embodied in the Commission's all-payer rate setting system.

(3) The ARM Manual shall set forth the process and requirements associated with the ARM system.

F. Required Reports under ARM System.

(1) A hospital granted approval for an alternative method of charging under this regulation is required to file quarterly reports and annual reports, to include but not be limited to those listed below in this section, in order to determine that the hospital continues to qualify for the alternative method of rate determination.

(2) Quarterly Reports. The following reports shall be completed in the form prescribed by the Commission and submitted to the Commission within 30 days after the end of each hospital's calendar quarter:

(a) Statistical Data Summary-Each Capitation or Risk-Sharing Contract;

(b) Statistical Data Summary-Each Fixed-Price Contract;

(c) Statistical Data Summary-Other;

(d) Revenue Summary-Each Capitation or Risk-Sharing Contract;

(e) Revenue Summary-Each Fixed-Price Contract; and

(f) Revenue Summary-Other.

(3) Annual Reports. The following annual reports shall be completed in the form prescribed by the Commission and submitted to the Commission within 90 days after the end of the appropriate fiscal year:

(a) Statement of Revenue and Expense-Each Capitation or Risk-Sharing Contract;

(b) Statement of Revenue and Expense-Each Fixed-Price Contract;

(c) Statement of Revenue and Expense-Other;

(d) Audited Statement of Revenue and Expense-Contracting Entity; and

(e) Audited Balance Sheet-Contracting Entity.

(4) Filing of Reports/Extension.

(a) A hospital required to file the reports in this section may request a reasonable extension of time for filing, if the extension request is:

(i) Made in writing to the attention of the Executive Director;

(ii) Supported by sufficient justification; and

(iii) Made at a reasonable time before the due date of a required report.

(b) The Executive Director shall respond promptly in writing to the requesting hospital upon receipt of the request by either approving or disapproving the request.

(c) Extensions will be granted only for valid reasons.

(d) Any required report submitted by a hospital that is substantially incomplete or inaccurate shall be considered untimely filed.

(5) Time for Filing. An application for an alternative rate application shall be filed at least 30 days before the proposed effective date of the alternative rate.

(6) Penalties.

(a) The Commission may impose penalties of up to $1,000 per day for failing to file reports as required under this section.

(b) The Commission may refuse to grant a rate increase to a hospital that does not file a report as required under this section.

(c) A fine assessed for failure to file an alternative rate application on a timely basis shall begin as of the date the application should have been filed.

G. Funding for Health Information Technology.

(1) The Commission may adjust a hospital's rates for health information technology (HIT) projects in conjunction with action taken by the Maryland Health Care Commission (MHCC) under COMAR 10.25.13.

(2) Upon receipt of a recommendation for funding from the MHCC, the Commission's staff shall:

(a) Review the information presented;

(b) Consult with appropriate parties; and

(c) Recommend to the Commission approval, denial, or modification of the MHCC recommendation.

(3) In deciding the course of action to follow on an MHCC HIT project recommendation, the Commission and its staff shall consider, among other things, the following criteria:

(a) The basis for the MHCC recommendation;

(b) The applicant's statement of the purpose, mission, vision, goals, and measurable objectives of the project;

(c) The planned approach, including:

(i) An explanation of how the project's goals and objectives will be met;

(ii) The technical strategy of the project;

(iii) What activities will be used;

(iv) What personnel will be needed; and

(v) How that personnel will be utilized;

(d) How the project will be evaluated, as well as specific measurement strategies;

(e) A timeline that includes the start and end dates of the project and a schedule of activities;

(f) The credentials of the entity and participating individuals, including information that demonstrates their background and ability to carry out the project successfully;

(g) The potential of the project to enhance the value of health care in Maryland, such as improving health care outcomes and reducing health care costs;

(h) Information that demonstrates why the project is needed; and

(i) A budget that details cost projections for the project that is specific, reasonable, realistic, accurate, and flexible.

(4) Decision.

(a) Based on its consideration of the above-stated criteria and staff's recommendation, the Commission shall decide on the nature, extent, terms, and conditions of any rate adjustment approved.

(b) The decision of the Commission on an MHCC recommendation for HIT funding is final.

(c) A request for funding under this section is not a contested case under the Administrative Procedure Act.

Notes

Md. Code Regs. 10.37.10.06

Regulation .06E adopted effective August 28, 1995 (22:17 Md. R. 1318)
Regulation .06E amended effective September 9, 1996 (23:18 Md. R. 1317); November 4, 1996 (23:22 Md. R. 1497); February 9, 1998 (25:3 Md. R. 146)
Regulation .06F amended effective March 4, 2013 (40:4 Md. R. 346)
Regulation .06G adopted effective October 9, 2006 (33:20 Md. R. 1617)