TITLE 56

PUBLIC ASSISTANCE AND WELFARE

CHAPTER 22

LEGISLATIVE APPROVAL FOR MEDICAID STATE PLAN AMENDMENTS AND WAIVERS

56-2208.  legislative approval — change in encounter rate due to change in scope of services. (1) The department of health and welfare is authorized to and shall submit the state plan amendments required to carry out the provisions of this section no later than October 1, 2026.

(2)(a)  As required by 42 U.S.C. 1396a(bb)(3)(B), the department shall adjust the prospective payment system (PPS) encounter rates of federally qualified health centers (FQHCs) and rural health clinics (RHCs) based on any change in scope of FQHC or RHC services, as defined by 42 U.S.C. 1396d(a)(2)(B) and (C).

(b)  A change in scope of services is one that affects the type, intensity, duration, or number of services provided by a FQHC or RHC. A change in the scope of FQHC or RHC services may occur if the FQHC or RHC has added, dropped, or expanded any service that meets the definition of a FQHC or RHC service pursuant to 42 U.S.C. 1396d(a)(2)(B) and (C). A change in the cost of a service is not considered in and of itself a change in the scope of services.

(c)  To qualify for a rate adjustment, applications for a rate review must meet a minimum four and one-half percent (4.5%) cumulative/aggregate change in cost per medical or dental visit as measured by comparing the cost per encounter with change in scope of services to the then current PPS rate.

(3)  All reasonable efforts shall be made to submit written notification of a planned change in scope to the department sixty (60) days prior to implementation of a change in scope. Notification shall provide a detailed description of the planned change in scope. The department shall not impose penalties related to this section.

(4)  Applications for a rate adjustment shall be filed with the department once the change in scope of service has been fully implemented for a period of six (6) consecutive months. Full implementation means costs were incurred and services were provided without interruption for a consecutive six (6) month period. Requests for the determination of a change in scope and a PPS rate review must be received by the last day of the third month following the end of the consecutive six (6) month period after the change in scope. FQHCs and RHCs may submit a maximum of one (1) application for a rate adjustment based on a change in scope of services per fiscal year. Applications for a rate adjustment shall include:

(a)  A written narrative describing the specific changes in scope of services and how these changes relate to a change in the FQHC’s or RHC’s overall scope of services;

(b)  A full cost report including all cost and encounter information for the first six (6) consecutive months of operations after the change in scope was implemented; and

(c)  Any additional supplemental data requested by the department that is reasonably necessary to support the department’s evaluation of the application.

(5)(a)  The department shall review and accept, reject, or adjust a request for a rate adjustment within ninety (90) days of receiving an application.

(b)  If further documentation or records are requested by the department after receiving a request for rate adjustment, the applicant shall have up to two (2) weeks to respond to the request. The period of days beginning with the request for further documentation or records by the department and ending with the response from the applicant shall not be counted toward the ninety (90) day requirement described in paragraph (a) of this subsection.

(c)  After reviewing and accepting, rejecting, or adjusting a request for rate adjustment, the department shall provide a draft calculation for the final rate to the applicant for a change in scope of services. The applicant shall have a review period of sixty (60) days to review and respond to such draft calculation.

(d)  The final rate calculation shall be issued within forty-five (45) days after the review period described in paragraph (c) of this subsection.

(e)  The department’s final PPS encounter rate may be appealed by the applicant within thirty (30) days of the department’s final decision.

(f)  The final PPS encounter rate shall be effective the first day of the implementation of the change in scope. The department shall reconcile encounter payments for cost differences from the first day of implementation of the new PPS rate to completion date, to include any encounters not reconciled by a contracted managed care entity.

History:

[56-2208, added 2026, ch. 308, sec. 1, p. 1247.]