10A NCAC 22G .0602. REIMBURSEMENT METHODS

(a)  A maximum rate per visit shall be established annually for each of the following services:

(1)           Registered or Licensed Practical Nursing Visit;

(2)           Physical Therapy Visit;

(3)           Speech Therapy Visit;

(4)           Occupational Therapy Visit;

(5)           Home Health Aide Visit.

(b)  The maximum rates for the services identified in Paragraph (a) of this Rule are computed and applied as follows:

(1)           Payment of claims for visits shall be based on the lower of the billed customary charges or the maximum rate of the particular service.  Governmental providers with nominal charges may bill at cost.  For this purpose, a charge that is less than 50 percent of cost is considered a nominal charge.  For such governmental providers, the payment amount is equal to the lower of the cost as billed or the applicable maximum rate.

(2)           Maximum per visit rates effective July 1, 1996, for Registered or Licensed Practical Nursing, Physical Therapy, Speech Therapy, and Occupational Therapy shall be equal to the rates in effect on July 1, 1995.  The July 1, 1995 maximum rates are as follows:  Registered or Licensed Practical Nursing ($82.78), Physical Therapy ($81.59), Speech Therapy ($81.59) and Occupational Therapy ($81.59).  To compute the annual maximum rates effective each July 1 subsequent to July 1, 1996, the maximum rates per visit are adjusted as described in Subparagraphs (4), (5), and (6) of this Paragraph.

(3)           Maximum per visit rate effective July 1, 1996 for Home Health Aide shall be equal to the rate in effect on July 1, 1995.  To compute the annual maximum rates effective each July 1 subsequent to July 1, 1996, perform the following steps:

(A)          Sort all providers by the cost per visit using the 1994 cost reports (low to high),

(B)          Run a cumulative total on visits from each provider based on the sorting,

(C)          When the cumulative total number of visits reaches the fiftieth percentile, the cost per visit rate associated with that provider shall be adjusted as described in Subparagraphs (4), (5), and (6) of this Paragraph.

(4)           Each year maximum rates shall be adjusted by an annual cost index factor.  The cost index has a labor component with a relative weight of 75 percent and a non‑labor component with a relative weight of 25 percent.  The relative weights shall be derived from the Medicare Home Health Agency Input Price Index published in the Federal Register dated May 30, 1986.  Labor cost changes shall be measured by the annual percentage change in the average hourly earnings of North Carolina service wages per worker.  Non-labor cost changes are measured by the annual percentage change in the GNP Implicit Price Deflator.

(5)           The annual cost index shall equal the sum of the products of multiplying the forecasted labor cost percentage change by 75 percent and multiplying the forecasted non‑labor cost percentage change by 25 percent.  For services included under Subparagraph (2) of this Paragraph, the July 1, 1996 effective rates shall be multiplied by the cost index factor for each subsequent year up to the year in which the rates apply.  For services included under Subparagraph (3) of this Paragraph, base year costs per visit shall be multiplied by the cost index factor for each subsequent year up to the year in which rates apply.  The annual cost index factor shall not exceed the amount approved by the North Carolina General Assembly.

(6)           Other adjustments may be necessary for home health services to comply with federal or state laws or rules.

(c)  Medical supplies except those related to provision and use of Durable Medical Equipment shall be reimbursed at the lower of a provider's billed customary charges or a maximum amount determined for each supply item.  Fees shall be established based on average, reasonable charges if a Medicare allowable amount cannot be obtained for a particular supply item.  Estimates of reasonable cost shall be used if a Medicare allowable amount cannot be obtained for a particular supply or equipment item.  The Medicare allowable amounts shall be those amounts available to the Division of Medical Assistance as of July 1 of each year.

(d)  Changes to the Payment for Services Prospective Reimbursement Plan for Home Health Agencies shall become effective when the Centers for Medicare and Medicaid Services (CMS), US Department Health and Human Services, approves amendment submitted to CMS by the Director of the Division of Medical Assistance as TN#01-16.

 

History Note:        Authority G.S. 108A-25(b); 108A-54; 108A-55; S.L. 1985, c.479, s. 86; 42 C.F.R. 440.70;

Eff. October 1, 1987;

Amended Eff. October 1, 1992; May 1, 1990;

Temporary Amendment Eff. October 4, 1996;

Amended Eff. April 1, 1997;

Temporary Amendment Eff. July 25, 1997;

Amended Eff. August 1, 1998;

Temporary Amendment Eff. November 9, 2001;

Temporary Amendment Expired August 30, 2002;

Amended Eff. April 1, 2003.