A. The department shall adopt rules and regulations in accordance with the Administrative Procedure Act that provide the following:

            (1) Allow a rural hospital to certify as a contributing public agency, public funds as representing expenditures eligible for federal financial participation in the Medicaid program to the extent authorized by federal law. The expenditure of such funds shall be in accordance with rules promulgated by the department.

            (2)(a) Maximize funding for services rendered by rural hospitals to the extent allowed by federal law and in amounts that may be appropriated by the legislature relative to the use of Medicaid disproportionate share reimbursement and Medicaid reimbursement. To the extent that intergovernmental transfers and the certification of eligible expenditures are available for recognition of state match for such Medicaid disproportionate share payments and Medicaid reimbursement, the department shall maximize the use of such amounts for the benefit of rural hospitals to increase access to health care for Medicaid and LaCHIP beneficiaries as well as indigent individuals.

            (b) Notwithstanding any law to the contrary, by September 1, 2007, the department shall file a state plan amendment with CMS amending the Medicaid state plan provisions governing Medicaid hospital reimbursement to provide that a rural hospital, as defined in La. Rev. Stat. 40:1189.3, shall be reimbursed at a rate which equals or approximates one hundred ten percent, or, if a reduction is required by CMS, the maximum amount acceptable to CMS, but in no event less than one hundred percent, of the appropriate reasonable cost of providing hospital inpatient and outpatient services, including but not limited to services provided in a rural health clinic licensed as part of a rural hospital. The new rural hospital payment methodology shall utilize prospective rates approximating costs at the time of service for inpatient acute and psychiatric services. To ensure that rural hospital outpatient services, including those currently reimbursed on a cost basis and those currently reimbursed on a fee schedule are reimbursed in the aggregate at one hundred ten percent of the reasonable costs or such lesser amounts as approved by CMS, but in no event less than one hundred percent of their reasonable costs, the department shall pay an interim rate for cost-based outpatient services at one hundred ten percent of reasonable cost during the year and for fee-based services paid on a claim-by-claim basis, and the department shall make quarterly estimates of a supplemental payment required to bring the hospital’s reimbursement for such services up to one hundred percent of reasonable costs and immediately remit such payments to the hospital and at final settlement pay such amounts as necessary to ensure that all outpatient services in the aggregate (cost based and fee schedule) are paid at one hundred ten percent of reasonable costs.

            (c) On an expedited basis, the department shall take all steps necessary and available to obtain CMS approval for the state plan amendment and shall, immediately upon notification of such approval, promulgate an emergency rule to implement the state plan amendment.

            (d) Once the outpatient cost-based reimbursement payment methodology is implemented, the department shall set and monitor interim payment rates to minimize the amount of annual cost settlements.

            (e) For cost reporting periods ending after July 1, 2008, the department shall pay seventy-five percent of interim rural hospital outpatient cost report settlement amounts due and one hundred percent of final rural hospital outpatient cost report settlement amounts due within fourteen days of receipt by the department of such reports from the Medicaid audit contractor.

            (f) The new rural hospital payment methodology shall be effective for services provided on or after July 1, 2008, or as soon thereafter as may be permitted by federal law.

            (3)(a) With respect to reimbursement for services furnished in another state, the department shall insure that reimbursement for such services shall be the lesser of the payment for such services by the state wherein such hospital is located or the department’s payment made to like in-state providers. The department shall provide coverage for such services to the same extent that it would pay for services furnished within the boundaries of this state, only if any of the following conditions is met:

            (i) Medical services are needed because of a medical emergency.

            (ii) Medical services are needed and the recipient’s health would be endangered if he were required to travel to his state or residence.

            (iii) The state determines, on the basis of medical advice, that the needed medical services are necessary supplementary resources, and more readily available in the other state.

            (iv) It is general practice for recipients in a particular locality to use medical resources in another state.

            (b) In the event federal requirements for the state plan for medical assistance permit the department to impose further restrictions on payment for and coverage of medical services to Louisiana Medicaid patients rendered by out-of-state providers, the department shall promulgate regulations restricting payment for and coverage of such services to the fullest extent permitted by law. Such restrictions shall include lowering the rate of reimbursement provided for services rendered to out-of-state hospitals to the payment for such services by the state wherein such hospital is located, the department’s payment made to like in-state providers, or the average rate paid to Louisiana rural hospitals located in the state, whichever is the least.

            (c) The secretary of the department may negotiate a higher rate of reimbursement to an out-of-state hospital in the event that a Louisiana Medicaid recipient requires services that cannot be provided by any Louisiana hospital or provider and when these services can only be provided by an out-of-state provider.

            (4)(a) Effective for services provided on or after July 1, 2010, or as soon thereafter as may be permitted by federal law, the department shall develop and implement, by emergency rule, a payment methodology which optimizes Medicaid inpatient and outpatient payments to rural hospitals. Payments shall be developed utilizing available Medicare upper payment limits for inpatient and outpatient services in accordance with state and federal law. Calculated payments shall be distributed to qualifying rural hospitals no less than quarterly, or as authorized by federal law.

            (b) After federal funds are optimized, the remaining appropriated funds for rural hospitals may be utilized to develop a state-only funded program to provide direct funds to qualifying rural hospitals to support access to services that would not be available otherwise. In the event the amount appropriated for such state-only funded program is insufficient in any state fiscal year to meet the total payments required by all rural hospitals to recover payment reductions, the payments to qualifying rural hospitals under this state-only funded program may be reduced proportionately.

            (c) The department shall review Medicaid and uninsured cost information, payment information, patient charges, and hospital financial statements to the extent required by state or federal law to determine the optimal combination of payments.

            (d) Rural hospitals that do not provide the minimum set of documentation required in Subparagraph (4)(c) of this Section to determine the optimal combination of payments shall not be eligible for additional payments.

            (e) The department is hereby authorized to publish and promulgate rules, in accordance with the Administrative Procedure Act, to implement the provisions of this Paragraph.

            B. The rules and regulations promulgated pursuant to Subsection A of this Section shall be promulgated no later than one hundred twenty days after August 15, 1997. No later than one hundred twenty days after August 15, 1997, the department shall also submit to the secretary of the United States Department of Health and Human Services those amendments to the state plan for medical assistance necessary to conform the state plan for medical assistance with the provisions of Subsection A of this Section.

            Acts 1997, No. 1485, §1; Acts 1999, No. 1068, §1; Acts 2001, No. 775, §1; Acts 2007, No. 327, §1, eff. July 9, 2007; Acts 2010, No. 883, §1; Redesignated from La. Rev. Stat. 40:1300.144 by HCR 84 of 2015 R.S.