July 2012

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South Dakota Medicaid Electronic Health Record (EHR) Incentive Payment Program Issues Provider Incentive Payments
Established by the Health Information Technology for Economic and Clinical Health Act (HITECH) Act of 2009, the South Dakota Medicaid EHR Incentive Payment Program provides incentive payments for eligible providers for adopting and meaningfully using certified EHRs. Eligible professionals that meet program requirements and attest successfully may receive a first year payment of $21,250 and $8,500 per year for up to five years. For more information, or to register to participate in the Medicaid EHR Incentive Payment Program, please visit this website.

As of July 6, 2012, fifty eligible professionals and eight eligible South Dakota hospitals have received incentive payments for adopting, implementing or upgrading to a certified Electronic Health Record (EHR) technology. To date, the incentive program issued a total of $5,671,422.75. EHR technology plays a key role in improving quality of care, safety and efficiency.

For questions or additional information, please contact us at 605.773.3495, or visit the EHR program website.

Pharmacy co-pay change

Effective July 1, 2012, the co-paymnet for a brand name drug increased from $3.00 to $3.30 and the co-payment for a generic drug increased from $0 to $1.00. This change is appliciable only to recipients subject to co-pays. Individuals federally exempt from co-payments, including children and pregnant women, will continue to have no co-pay for prescriptions. This change was implemented as a result of a recommendation from the Medicaid Solutions Work Group Pharmacy Subcommittee.

Success of Inpatient Hospitalization Reviews

Since October 2011, nurses in the Division of Medical Services have reviewed in-state, inpatient hospitalizations of six days or more. Working collaboratively with facilities statewide to decrease length of stays and improve patient outcomes has been successful. The number of recipients with lengthy hospital stays has dropped by two-thirds.

Out-of-State prior Authorization

In the coming months, the State will begin to require prior authorization for non-emergency medical services provided out-of-state. This change will be effective for all Medicaid recipients regardless of age. Medicaid providers within 50 miles of the South Dakota border will be considered in-state providers. More details on this process will be distributed to providers as it becomes available.

Dental Limits
Beginning July 1, 2012, South Dakota Medicaid covers the same emergency services for adults age 21 and older, but those services that are not deemed emergency will only be covered up to a limit of $1,000 per state fiscal year per recipient. Emergency services are those necessary for the immediate relief of severe pain, alleviation of acute infection, or necessary because of trauma.

Dental providers will seek prior authorization of services to determine whether their Medicaid patients have reached their $1,000 limits or what funds remain available within that limit to pay for the services. Services for immediate relief of severe pain, alleviation of infection, or necessary because of trauma do not count toward the dollar limit. Patients will be responsible to the provider for amounts that exceed the $1,000 limit for the non-emergency services. Charges for services beyond the 1,000 limit collected from the patient should be billed at the Medicaid rate, if the services is covered by Medicaid. If it is a non-Medicaid covered service, the patient is responsible at the provider's charges.

Delta Dental, South Dakota's Medicaid's dental claims administrator, has developed, and is distributing informational materials regarding the $1,000 limit to dental providers.

Employee Spotlight- Bonnie Bjork
Bonnie is responsible for the day to day management of the operations side of Medical Services including Claims Processing, Surveillance and Utilization Review, Program integrity and the Electronic Health Records Initiative. Additionally, she is involved in the planning and implementation of many projects including HIPAA 5010 implementation, National Correct Coding Initiative, and provisions of mandated changes in the Affordable Care and Deficit Reduction acts to name a few. Bonnie assumed the Deputy Division Director role after having served in the project management role for the design, development and implementation of the new Medicaid Management Information System for the past four years.

Bonnie is originally from Dimock, SD -- famous for its beautiful Catholic church, its great cheese and its amateur baseball team that always goes to the State Tournament. Her family includes her husband, Tim. She has a step daughter and son-in-law and four grandsons who live in Rapid City. The day she got married she became a grandma. Bonnie's hobbies include golf, bicycling, and reading anything she can get her hands on.

Bonnie is a former Commissioner of the Governor's Office of Economic Development, Executive Director of the South Dakota Heritage Fund and worked in the Governor's office for seven years. She will challenge most people in South Dakota trivia.

Bonnie thanks all the dedicated people that work in Medical Services - Your dedication to your work, the citizens of South Dakota, and the clients we serve is inspirational.

New Employees

Ann Schwartz, Assistant Division Director
Ann previously served as the Home and Community Based Services Program Manager in the Division of Adult Services and Aging. Ann's duties in her new role as Assistant Division Director of Medical Services include managing the service and program components of the Division, while working with her team members to implement several recommendations of the Medicaid Solutions Work Group and ensure effective and efficient service delivery to Medicaid recipients.

Ann graduated from Dakota Wesleyan University in Mitchell, SD and went on to get a Masters degree in Social Work from Boston College. She coordinated Healthy Families, a home visiting program for low-income pregnant women in Boston before she and her family moved to Pierre in the summer of 2010.

Kathi Mueller, Program Manager of Managed Care
Kathi previously worked for Siouxland Staffing Services, a private business that places mid-level providers in medical facilities in SD, ND, IA and NE. Prior to Siouxland, Kathi served as Governor Rounds' senior advisor in the areas of health, human services and social services and also served as the State Registrar of Vital Records and the Administrator of the Office of Data Statistics and Vital Records in the Department of Health. As the Program Manager for Managed Care, Kathi is responsible for implementing several of the recommendations of the Medicaid Solutions Work Group to help manage costs and improve the quality of care for Medicaid Recipients.

Kathi has a BA in Political Science and MS in Public and Human Services Administration from Moorhead State University.

Jamie Dykstra, Intern
Jamie graduated from Riggs High School and recently received her BA in Human Development and Family Studies from South Dakota State University. As the intern for the Division of Medical Services, Jamie assists in the implementation of Health Care Reform Initiatives and other operations.

In the fall, Jamie will move to Minneapolis to attend graduate school in Orthoptics at the University of Minnesota.

Budget Changes for Fiscal Year 2013

1. Fee Increases and Rate Changes
Providers will see inflationary increases to reimbursement rates beginning with services provided on or after July 1, 2012. Fee schedules are available for informational purposes here. The appropriated reimbursement rates for SFY13 include increases of .5%, 1.5%, or 1.8% from SFY12 rates depending on provider type:

Physician Based Services

  • Physician services, other services and laboratories - 0.5%
  • Dentists and Orthodontists - 1.5%

Hospital Based Services

  • In-State DRG Medicaid Access Critical & Medicare Critical Access Inpatient & Outpatient hospital services - 1.8%
  • In-State Inpatient & Outpatient hospital services not classified as DRG Medicaid Access Critical &
    Medicare Critical Access - 0.5%
  • Out of State Inpatient and Outpatient hospital services - 0.5%
  • Psychiatric Residential Treatment facilities - 1.5%

As a result of input from providers, the FY13 physician fee schedules will represent the actual rate paid for services, including the reimbursement increase and prior year adjustments. The rates on the fee schedules will not reflect applicable cost shares and other payment adjustments. The Remittance Advice will reflect the rate of reimbursement without informational adjustments for FY12 and FY13.

2. Implantable Devices
Implantable Devices that are billed with a Revenue Code of 275 and 278 and billed charges in excess of $5,000 for these devices will be limited to cost plus 10%; on claims that are a cost outlier. Providers will be required to provide a statement of the cost of these devices as an attachment to their claim consistent with other claim types that require additional supporting documentation necessary to process for payment.

Progress Made on Medicaid Solutions Workgroup Recommendation on Health Homes

In November 2011, the Office of the Governor issued the Final Report of the Medicaid Solutions Work Group: Recommendations to Contain Costs within South Dakota's Medicaid Program. The full report can be found electronically here. Since its issuance, the Department of Social Services has begun work in many of the areas.

Recommendation I of the Medicaid Solutions Work Group was to: Implement a Health Home Initiative for Medicaid Enrollees. A stakeholder-driven work group was formed and has met twice with the final meeting slated for late-August. The scope of work includes examining Health Home models and identifying the target population best served by Health Homes in South Dakota.

The Health Home Workgroup has chosen to focus its efforts in two areas.  One Health Home model will serve individuals with a serious and persistent mental health condition and the second will target individuals with two chronic conditions or one chronic condition and at risk for a second. Two subcommittees have been established to develop recommendations for specific aspects of Health Homes. One subcommittee will focus on the financing portion of the Health Home model while the other will consider quality models and outcome measures.

Before implementation of the Health Home model in South Dakota, Medical Services must submit a State Medicaid Plan Amendment to the Centers for Medicare and Medicaid Services. Approval of the amendment will allow South Dakota to receive enhanced funding.

Requests for Information Released

The Department of Social Services (DSS) is working to gather information prior to moving forward with initiatives to improve care management for high need, high cost Medicaid recipients and a preferred drug list. The first step is to gather information and ideas through Requests for Information (RFI). RFIs collect information from providers that assist the Department in determining the feasibility of issuing Requests for Proposals (RFPs). RFIs have recently been requested in the following areas:

1. Improving Care Management for High Need, High Cost Medicaid Consumers: DSS solicited information to explore potential options that may reduce and contain Medicaid expenditures, and improve care management for high need, high cost Medicaid consumers.

2. Preferred Drug List: This RFI solicited information, recommendations and advice concerning the establishment of a Medicaid Preferred Drug List and Supplemental Rebate program. The goal of establishing a Preferred Drug List is to promote clinically appropriate utilization of pharmaceuticals in a cost-effective manner while limiting growth of expenditures by increasing the use of preferred drugs, including generics.

3. Strong Start: In collaboration with the Department of Health, DSS solicited information to determine the level of interest in implementing the Centering Healthcare Institute model of prenatal care that has the potential to improve perinatal outcomes for pregnant women enrolled in Medicaid who are at high risk for adverse pregnancy outcomes. The Departments of Social Services and Health had intended to submit an application for Strong Start on June 13th. Shortly before that deadline, CMS announced it would be revising the Funding Opportunity Announcement and extending the application deadline. The Departments are now reviewing the revised guidance.

Correct Coding Edits

In the 1990s, the Centers for Medicare & Medicaid Services (CMS) developed the National Correct Coding Initiative (NCCI) to promote national correct coding methodologies and to control improper coding leading to inappropriate payment. Medicare's NCCI has been in place for many years; providers that deliver services to Medicare recipients are likely familiar with the editing content of these coding methodologies.

Recent federal healthcare legislation passed into law (H.R. 3962) requires state Medicaid programs to incorporate compatible methodologies of NCCI into their claim processing systems. The Division of Medical Services implemented the CMS required NCCI editing requirements to the South Dakota Medicaid Management Information claim processing system on March 29, 2012.

  • NCCI Column I and Column II Edits
  • Mutually Exclusive (ME) Edits
  • Medically Unlikely Edits (MUE)

Providers may refer to the CMS website to learn more about Medicaid NCCI edits here.
Providers can also find a complete Provider Bulletin regarding pertinent information about South Dakota's NCCI Implementation, on the Department of Social Services website here.

State Program Integrity Support & Assistance

The state of South Dakota and the federal Centers for Medicare & Medicaid Services (CMS) are committed to fighting fraud and abuse in the Medicaid Program, which divert dollars that could otherwise be spent to safeguard the health of Medicaid recipients. CMS' Medicaid Integrity Program was implemented February 8, 2006 by the Deficit Reduction Act of 2005 to ensure the continued integrity of the Medicaid Program.

CMS contracts with Health Integrity, LLC, to conduct Medicaid Integrity Program reviews and audits. Some Medicaid providers may receive communication from this contractor in the near future as South Dakota complies with the requirements of the Deficit Reduction Act and its Program Integrity requirements. Thank you for your help to ensure the continued integrity of the Medicaid Program in South Dakota.

Health Care Acquired Conditions

South Dakota Medicaid will begin implementing Section 2702 of the Patient Protection and Affordable Care Act (ACA) which requires Medicaid providers to report certain Health Care-Acquired Conditions (HCAC) and State Medicaid programs to deny payments for costs associated with their treatment effective July 1, 2012.

The ACA requires that at a minimum, Medicaid programs implement reporting and non-payment for certain HCAC in an inpatient hospital setting, and in all care settings for the “three wrongs” that include surgery or a major procedure on the wrong patient, wrong site, or wrong surgery. South Dakota Medicaid will implement only the minimum required.

Effective July 1, 2012, providers are required to identify provider preventable conditions that are associated with claims for Medicaid payment or with courses of treatment furnished to Medicaid patients for which Medicaid payment would otherwise be available. Providers will report this information through the claims submission process.

More details on this process have been distributed to impacted facilities and are available under Provider Bulletins “Healthcare Acquired Conditions” here.


Comments or questions?
Contact Medical Services

South Dakota Department of Social Services

Division of Medical Services
700 Governors Drive
Pierre, SD 57501
Phone 605.773.3495

Fax 605.773.5246

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