Menu
1996 Session

Budget Bill - SB30 (Introduced)

Department of Medical Assistance Services

Item 322

Item 322

First Year - FY1997Second Year - FY1998
Medical Assistance Services (Medicaid) (45600)$2,255,749,170$2,331,079,223
Nonmandatory Mental Health and Mental Retardation Services (45607)FY1997 $195,334,717FY1998 $188,406,773
Nonmandatory Mental Health, Mental Retardation and Substance Abuse Community Based Services (45608)FY1997 $111,145,265FY1998 $122,616,760
Professional and Institutional Services (45609)FY1997 $1,912,628,766FY1998 $1,982,084,114
Mental Illness Services (45610)FY1997 $36,640,422FY1998 $37,971,576
Fund Sources: 
GeneralFY1997 $1,095,668,346FY1998 $1,131,804,346
SpecialFY1997 $50,000FY1998 $50,000
Federal TrustFY1997 $1,160,030,824FY1998 $1,199,224,877

Authority: P.L. 89-87, as amended, Title XIX, Social Security Act, Federal Code; Title 32.1, Chapters 9 and 10 Code of Virginia.


A. It is the intent of the General Assembly to develop and cause to be developed appropriate, fiscally responsible methods for addressing the issues related to the cost and funding of long-term care. It is the further intent of the General Assembly to promote home-based and community-based care for individuals who are determined to be in need of nursing facility care.


B. The Director of the Department of Medical Assistance Services shall seek the necessary waivers from the United States Department of Health and Human Services to authorize the Commonwealth to cover a range of non-institutional, long-term care services which may provide less expensive alternatives to institutional care.


C.1. The appropriation includes $94,874,270 the first year from the general fund and $100,460,447 from the federal trust fund and $91,434,270 the second year from the general fund and $96,972,503 from the federal trust fund for reimbursement to the institutions within the Department of Mental Health, Mental Retardation and Substance Abuse Services. The Department of Mental Health, Mental Retardation and Substance Abuse Services shall be reimbursed for the federal share of general salary scale adjustments approved by the General Assembly.


2. The appropriation includes for the first year $25,074,028 from the general fund and $26,550,490 from the federal trust fund, and for the second year $25,815,614 from the general fund and $27,357,639 from the federal trust fund for reimbursement to the Department of Mental Health, Mental Retardation and Substance Abuse Services for the Mental Retardation Waiver. The appropriation also includes for the first year $28,909,199 from the general fund and $30,611,548 from the federal trust fund and for the second year $33,714,613 from the general fund and $35,728,894 from the federal trust fund for reimbursement to the Department of Mental Health, Mental Retardation and Substance Abuse Services for the "State Plan Option" community mental health and mental retardation services.


3. The Board of Medical Assistance Services shall promulgate regulations, subject to approval by the Health Care Financing Administration (HCFA), to grant the skilled nursing facilities of the Department of Mental Health, Mental Retardation and Substance Abuse Services an exception to routine cost limits normally required by HCFA in connection with Medicaid payments to institutional providers.


D. The State Board of Medical Assistance Services shall develop amendments to the State Plan for Medical Assistance and seek the Health Care Financing Administration's approval to provide that:


1. Effective on or after July 1, 1996, the Virginia Medical Assistance Program shall reimburse on a selective contract basis for the Durable Medical Equipment items of ostomy and incontinence supplies. These changes will affect all recipients except those recipients enrolled in the MEDALLION II or OPTIONS Plan coverages.


2. Effective on or after July 1, 1996, the Virginia Medical Assistance Program shall, for the area of specialized care services, which may be rendered in either nursing facilities or long-stay hospitals: (a) discontinue the application of an inflation factor to the rate setting process; (b) reduce the reimbursement rates for rehabilitative and complex health care categories by 35%; (c) remove wound care from the coverage criteria; and (d) make modifications to the criteria for services as necessary.


3. Effective on and after July 1, 1996, the Department of Medical Assistance Services shall utilize a benefit manager to administer the Virginia Medicaid Program's prescribed drug coverage. The Department shall determine the preferred drugs that will be covered by the State Plan for Medical Assistance based upon an evaluation of the cost effectiveness and therapeutic efficacy of each drug. Final determination as to the drugs covered shall be made by the Department of Medical Assistance Services.


E. Out of this appropriation, the Department of Medical Assistance Services shall provide coverage of intensive assisted living care to residents of licensed Adult Care Residences who are Auxiliary Grant recipients. The per diem reimbursement shall not exceed $180.00 per person per month. Individuals entitled to benefits under this section are not entitled to benefits under Item 324.


F. Out of this appropriation, $122,000 in the first year and $122,000 in the second year from the general fund is set aside to support the administration of the patient level data base system.


G. Effective on and after July 1, 1996, the Virginia Medical Assistance Program shall provide coverage of investigations by local health departments to determine the source of lead contamination as part of the management and treatment of Medicaid-eligible children who have been diagnosed with elevated blood levels. Only costs that are eligible for federal funding participation in accordance with current federal regulations shall be covered. Payments for environmental investigations under this section shall be limited to no more than two visits per residence.


H. The Board of Medical Assistance Services, subject to the approval of the Governor, shall initiate and develop a state plan for medical assistance which complies with the expected repeal of Title XIX of the Social Security Act and enactment of Title XXI of the Social Security Act which establishes state MediGrant programs and which provides block grant funds to states to provide medical assistance to the poor. The Board of Medical Assistance Services, subject to the approval of the Governor, shall promulgate any necessary regulatory changes. In order to respond quickly to federal budget ceilings which will impact the first and second years of the biennium budget, initiation and promulgation of necessary regulatory changes shall be exempt from the requirements of Title 9, Chapter 1.1:1, Articles 1 and 2, Code of Virginia. Notwithstanding the above, the Board of Medical Assistance Services, subject to the approval of the Governor, shall initiate the notice and public comment procedures of Title 9, Chapter 1.1:1, Article 2, Code of Virginia for any such necessary regulatory changes no later than October 1, 1997. This paragraph shall be effective upon signature of the Governor.


I. Out of this appropriation, $50,000 in Special Fund Revenue is appropriated in each year of the biennium to the Department of Medical Assistance Services for the administration of the disbursement of civil money penalties levied against and collected from Medicaid nursing facilities for violations of rules identified during survey and certification as required by federal law and regulation. Based on the nature and seriousness of the deficiency, the Agency or the Health Care Financing Administration may impose a civil money penalty, consistent with the severity of the violations, for the number of days a facility is not in substantial compliance with the facility's Medicaid participation agreement. Civil money penalties collected by the Commonwealth must be applied to the protection of the health or property of residents of nursing facilities found to be deficient. Penalties collected are to be used for (1) the payment of costs incurred by the Commonwealth for relocating residents to other facilities; (2) payment of costs incurred by the Commonwealth related to operation of the facility pending correction of the deficiency or closure of the facility; and (3) reimbursement of residents for personal funds or property lost at a facility as a result of actions by the facility or individuals used by the facility to provide services to residents. These funds are to be administered in accordance with the revised federal regulations and law, 42 CFR 488.400 and the Social Security Act § 1919(h), for Enforcement of Compliance for Long-Term Care Facilities with Deficiencies. Any Special Fund Revenue received for this purpose, but unexpended at the end of the fiscal year, shall remain in the fund for use in accordance with this provision.


J. Effective on and after July 1, 1996, the State Plan for Medical Assistance shall provide for a co-payment of $6.00 from all Medicaid recipients for use of a hospital emergency room except that no co-payment shall be required from Medicaid recipients who are under 21 years of age, recipients who are seeking treatment for a pregnancy-related service, and recipients who are seeking treatment for a bona fide emergency.


K. Effective on and after July 1, 1996, the Department of Medical Assistance Services shall implement a fully prospective reimbursement system for hospital services. For inpatient hospital services, it shall use a Diagnosis Related Groups (DRG) methodology. For outpatient hospital services, it shall use an Ambulatory Patient Groups (APG) methodology. The Board of Medical Assistance Services shall issue such regulations as are necessary for implementation of the reimbursement methodologies. In addition, the Board of Medical Assistance Services shall revise its regulations governing its utilization control measures (preauthorization and utilization review) so as to make them consistent with a prospective DRG reimbursement methodology.


L. Effective on and after July 1, 1996, the Department of Medical Assistance Services shall implement a fully prospective reimbursement system for outpatient rehabilitation services. This reimbursement system shall use an Ambulatory Patient Groups (APG) methodology. The Board of Medical Assistance Services shall issue such regulations as are necessary for implementation of the reimbursement methodologies.


M. If any part, section, subsection, paragraph, clause, or phrase of this item or the application thereof is declared by the United States Department of Health and Human Services or the Health Care Financing Administration to be in conflict with a federal law or regulation, such decisions shall not affect the validity of the remaining portions of this item, which shall remain in force as if this item had passed without the conflicting part, section, subsection, paragraph, clause, or phrase. Further, if the United States Department of Health and Human Services or the Health Care Financing Administration determines that the process for accomplishing the intent of a part, section, subsection, paragraph, clause, or phrase of this item is out of compliance or in conflict with federal law and regulation and recommends another method of accomplishing the same intent, the Director of the Department of Medical Assistance Services, after consultation with the Attorney General, is authorized to pursue the alternative method.