WAC 388-550-3250   Indirect medical education costs -- Conversion factors, per diem rates, and per case rates.  (1) For dates of admission before August 1, 2007, for each hospital with a graduate medical education program, the department removes indirect medical education-related costs from the aggregate operating and capital costs of each hospital in the peer group before calculating a peer group's cost cap for conversion factor rebasing.

     (2) For dates of admission before August 1, 2007, to arrive at indirect medical education costs for each component, the department:

     (a) Multiplies medicare's indirect cost factor of 0.579 by the ratio of the number of interns and residents in the hospital's approved teaching programs to the number of hospital beds; and

     (b) Multiplies the product obtained in subsection (2)(a) of this section by the hospital's operating and capital components.

     (3) For dates of admission before August 1, 2007, after the peer group's cost cap has been calculated, the department adds back to the hospital's aggregate costs its indirect medical education costs. See WAC 388-550-3450.

     (4) For dates of admission on and after August 1, 2007, the department:

     (a) Uses the indirect medical costs in the calculation of the hospital DRG conversion factor, per diem rates, and per case rates.

     (b) Uses the medicare's indirect medical education factor matching the same period of the hospital medicare cost report used in calculating the hospital cost to estimate the hospital aggregate operating and capital costs. The indirect medical education costs were removed from the hospital aggregate operating and capital costs in determination of statewide standardized average operating and capital cost per discharge, per day, and per case amounts.

     (c) To calculate the hospital-specific DRG conversion factor, per diem rates, and per case rates during rebasing. The department:

     (i) Multiplies the statewide standardized labor portion of the operating amount by the most currently available facility-specific wage index established by medicare that exists at the time of the medicaid rebasing (to determine the labor portion, the department used the factor established by medicare multiplied by the statewide operating standardized amount), then the nonlabor portion is added to the result to produce a hospital-specific operating amount; then

     (ii) Multiplies the hospital-specific operating amount by 1.0 plus the most currently available operating indirect medical education factor established by medicare that exists at the time of the medicaid rebasing; then

     (iii) Multiplies the statewide standardized capital amount by 1.0 plus the most currently available capital indirect medical education factor established by medicare that exists at the time of the medicaid rebasing; then

     (iv) Adds this hospital-specific operating amount to the statewide standardized capital amount; then

     (v) Adds the hospital-specific direct medical education portion adjusted for hospital-specific casemix index to the operating and capital amounts.



[Statutory Authority: RCW 74.08.090, 74.09.500 and 2005 c 518. 07-14-051, § 388-550-3250, filed 6/28/07, effective 8/1/07. Statutory Authority: RCW 74.08.090, 74.09.730, 74.04.050, 70.01.010, 74.09.200, [74.09.]500, [74.09.]530 and43.20B.020 . 98-01-124, § 388-550-3250, filed 12/18/97, effective 1/18/98.]