CurrentHawaii Medical Service Association (HMSA)Policy N/A
Definitions (Subtitle 12, Title 17 — Med-QUEST Division)
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This document provides definitions and related administrative terms used throughout Subtitle 12 of Title 17 (Med-QUEST Division) of the Hawaii Administrative Rules, governing Medicaid program operations and affecting beneficiaries, providers, and department staff.
Policy Summary
PayerHawaii Medical Service Association (HMSA)
PolicyDefinitions (Subtitle 12, Title 17 — Med-QUEST Division)
Policy CodePolicy N/A
Change TypeNo material changes (informational definitions chapter)
Effective DateAug 1, 1994
Next Review DateN/A
Key ActionUse the chapter's defined terms to interpret coverage, eligibility, notice, and payment rules across Subtitle 12.
SourceLink
POLICY UPDATE CHANGES
No material clinical or coverage changes in this revision.
~19document chunks processed
~120+defined terms in this part
State-specificstate-specific references
Subtitle 12title / division
HRS §346-14; 42 C.F.R. §431.10authorizing refs cited
Coverage-related Definitions and Criteria
Payment and level-of-care terminology
Terms relevant to payment and level-of-care determinations that inform coverage and reimbursement:
Acuity level or level of medical care: one of the following types of inpatient services: NF or ICF-ID; used to determine appropriate level of medical care and to inform reimbursement decisions (see acuity-based reimbursement system).
Acuity based reimbursement system: the Medicaid reimbursement system for nursing facility level of care described in exhibit A of chapter 17-1739.2; applies to acuity level A and acuity level C services (excluding services in critical access hospitals).
PPS (Prospective Payment System) rate components: includes basic PPS rate and capital-related cost components; capital related costs include depreciation, interest, property taxes, insurance, capital leases and rentals, and costs/fees related to capital financing. Capital incentive adjustments may increase a provider's capital component subject to peer-group quartile rules and an applicable ceiling.
Capital incentive adjustment: if a provider's capital per diem component is in the lowest peer-group quartile the incentive payment equals 35% of the difference between the median and the provider's capital per diem; if in the second lowest quartile the incentive equals 25% of that difference; the adjustment cannot raise the capital component above the capital component ceiling for the acuity level and peer group.
Capitated payment / Capitated rate: a fixed monthly payment paid per person by the department to a participating health plan for a defined set of benefits; payment may be prorated for partial-month enrollment.
Capital related costs definition: for prospective payment methodology, capital related costs are those associated with facilities and equipment under Medicare reimbursement principles and include depreciation, interest, property taxes, property insurance, capital leases and rentals, and costs and fees related to obtaining or maintaining capital financing.
Operational coverage-related definitions
Key program-related criteria and scopes referenced in definitions:
Eligibility determination: an approval or denial of eligibility for medical assistance as well as a redetermination or termination of eligibility for medical assistance.
Effective date of enrollment: the date as of which a participating health plan is required to provide benefits to an enrollee.
Electronic account: an electronic file including all information collected and generated by the department regarding each individual's Medicaid eligibility and enrollment, including documentation supporting decisions and dispositions (e.g., facts to support application decisions, disposition entries, or entries noting voluntary withdrawal, death, or inability to locate).
Emergency medical condition / Emergency services scope: sudden onset medical conditions with acute symptoms of sufficient severity that a prudent layperson could reasonably expect the absence of emergency services or immediate medical attention to result in serious jeopardy, impairment, dysfunction, harm, or obstetric emergencies; emergency services include inpatient and outpatient services needed to evaluate or stabilize such conditions.
EPSDT scope (Early and Periodic Screening, Diagnostic, and Treatment): includes activities to seek out individuals and families, inform them of prevention and available health services, help them use health resources effectively, and assure early diagnosis and treatment before problems become more complex or costly.
Medical necessity standard: procedures and services must have sufficient peer-reviewed evidence demonstrating intended effects on health outcomes, that benefits outweigh harms, and that the intervention is the most cost-effective method available as determined by the department.
Medically needy: individuals otherwise eligible for Medicaid whose income exceeds standards but whose excess may be reduced by incurred medical or remedial expenses to establish eligibility.
Coding, Pricing, and Related Thresholds
Payment methodology termsmixed
| PPS | Prospective Payment System (baseline, basic, adjusted PPS rates and components referenced) |
Procedure coding systemsHCPCS
| HCPCS | Healthcare Common Procedural Coding System |
Federal reimbursement referencesmixed
| 42 U.S.C. §§1395 et seq. | Social Security Act references for Medicare reimbursement principles |
| 42 C.F.R. Part 413 | Regulations related to Medicare principles of reimbursement |
Drug pricing termmixed
| WAC | Wholesale acquisition cost defined as the list price paid by wholesalers/distributors and other direct accounts for drugs purchased from the wholesaler's supplier (manufacturer's pre-rebate/pre-discount price) |
Terminal illness life expectancy threshold
Life-expectancy thresholdSix months (medical prognosis of life expectancy of six months or less)
Provider Responsibilities, Notices, and Administrative Actions
Documentation Required
Adequate notice elements (actions affecting eligibility)
A notice sent no later than the date of action must include: the action the department has taken or intends to take; the reason for the intended action; the specific departmental rule supporting the action; the household's right to request a hearing; the household's right to request and obtain an interpreter or auxiliary aids at no cost; the name of the contact person for additional information; the availability of continued benefits; the household's liability for any overpayments received while awaiting a hearing if the hearing decision is adverse; and the availability of free legal representation, if applicable.
- Statement of the action taken or intended
- Reason for the intended action
- Specific departmental rule supporting the action
- Right to request a hearing
- Right to request and obtain interpreter/auxiliary aids at no cost
- Contact person for additional information
- Availability of continued benefits
- Liability for overpayments if hearing decision is adverse
- Availability of free legal representation, if applicable
Note
Enrollment and effective date requirements
"Effective date of enrollment" is defined as the date a participating health plan is required to provide benefits to an enrollee; related eligibility and enrollment records (electronic account) must include facts supporting the department's decision and the disposition of each individual by finding of eligibility or ineligibility.
- "Effective date of enrollment" = date plan must provide benefits to enrollee
- Electronic account must contain facts supporting application decisions and disposition of eligibility
Prior Authorization
Prior authorization required for nonpreferred drugs
An "enhanced prior authorization list" refers to nonpreferred prescription drugs which require prior authorization before they are covered.
- Nonpreferred prescription drugs on the enhanced prior authorization list require prior authorization
Documentation Required
Initiate rate reconsideration for PPS rates
Rate reconsideration is the formal process by which a provider submits documentation and requests a review of their PPS rates because of extraordinary circumstances beyond the provider's control.
- Submit documentation supporting extraordinary circumstances
- Request a formal review of PPS rates
Denial Risk
Recoupment (overpayment recovery)
Recoupment means the State or its fiscal agent may initiate recovery of an overpayment by reducing future payments to a provider without advance official notice.
- Overpayment recovery implemented by reducing future provider payments
- May occur without advance official notice
Documentation Required
Provider termination and reenrollment
Termination for providers is the exclusion of a provider from participation by revoking billing privileges after applicable appeal rights are exhausted or the appeal timeline has expired; termination is not time-limited and providers must reenroll to regain billing privileges.
- Revocation of billing privileges after appeals are exhausted or timeline expires
- Termination is indefinite (not for a specified period)
- Providers must reenroll to regain billing privileges
Billing Rule
Visit counting rule for FQHC/RHC
For FQHCs and RHCs, a visit is a face-to-face encounter at a single location on the same day; multiple encounters with more than one professional or multiple encounters with the same professional on that day count as a single visit unless the individual, after the first encounter, suffers illness or injury requiring additional diagnosis or treatment.
- Single-location, same-day encounters generally count as one visit
- Counts multiple professionals' encounters on same day as one visit
- Exception: additional diagnosis or treatment after first encounter creates a separate visit
Defined Terms (Alphabetical / Key Terms)
Purpose (Definitions)
PurposeProvides the definitions for words and terminologies used throughout subtitle 12 of title 17.
Abuse
Abuse (providers)Provider practices inconsistent with sound fiscal, business, or medical practices resulting in unnecessary cost to the Medicaid program or reimbursement for services not medically necessary or below professional standards.
Abuse (beneficiaries)Beneficiary practices that result in unnecessary cost to the Medicaid program.
ScopeIncludes both provider and beneficiary practices that produce unnecessary Medicaid costs or inappropriate reimbursements.
Active treatment
Active treatment (mental illness)A continuous individualized program developed under and supervised by a physician, provided by a physician or qualified mental health professionals for acute severe mental illness requiring 24-hour supervision to diagnose or reduce psychotic or neurotic symptoms and to improve functioning toward discharge as soon as possible.
Active treatment (intellectual disability)An individualized program developed and supervised by an interdisciplinary team directed toward acquisition of behaviors for independence and prevention of regression.
Exclusion for NF residentsDoes not include, for a nursing facility resident, services within the facility's scope of services.
Adequate notice
Adequate notice timingA notice sent no later than the date of action.
Required content elementsMust state the action, the reason, the specific departmental rule supporting the action, the household's right to request a hearing, interpreter/auxiliary aid availability, contact person for information, availability of continued benefits, liability for overpayments, and availability of free legal representation if applicable.
PurposeEnsures households receive timely, complete information about adverse actions affecting medical assistance.
Attending physician
Attending physician definitionA medical doctor (M.D.) or doctor of osteopathy (D.O.) authorized to practice in the State who orders and directs services for a Medicaid beneficiary and who has the most significant role in determination and delivery of care when hospice care is elected.
DelegationMay be a physician from a group practice designated as the primary or an alternate delegated by the beneficiary's initial attending physician during absence.
Capital incentive adjustment
Capital incentive adjustment purposeAn increase to a provider's basic PPS capital component based on peer-group quartile position.
G&A incentive tiers (related)G&A incentive payments use quartile-based percentages (e.g., 35% for lowest quartile, 25% for second lowest), with ceilings to limit increases.
ApplicationApplies as an adjustment to basic PPS rates as defined in the PPS rate components and adjustment rules.
Clean claim
Clean claimA claim that can be processed without obtaining additional information from the provider or a third party.
ImplicationFacilitates timely processing and payment by the Medicaid fiscal agent.
Emergency medical condition
Emergency medical condition (general)The sudden onset of a medical condition with acute symptoms of sufficient severity that a prudent layperson could reasonably expect lack of immediate care to result in serious jeopardy, impairment, dysfunction, harm, or obstetric emergency conditions.
Specific consequences listedIncludes placing health in serious jeopardy, serious impairment to body functions, serious dysfunction of bodily organ or part, serious harm due to substance abuse emergency, injury or harm to self/others, and obstetric conditions where transfer is unsafe.
Emergency servicesCovered inpatient and outpatient services needed to evaluate or stabilize an emergency medical condition using the prudent layperson standard.
Effective date of enrollment
Effective date of enrollmentThe date as of which a participating health plan is required to provide benefits to an enrollee.
ContextUsed to determine when plan obligations to an enrollee begin under managed care arrangements.
Electronic account
Electronic accountAn electronic file that includes all information collected and generated by the department regarding each individual's Medicaid eligibility and enrollment, including administrative appeal documentation, facts supporting decisions, and disposition entries.
Included recordsApplication facts, eligibility disposition (eligibility/ineligibility), and specific entries for voluntary withdrawal, death, or inability to locate the individual.
Emergency medical condition (alternate)
Emergency medical condition (alternate wording)A sudden onset medical condition manifesting acutely (including severe pain, psychiatric disturbances, or substance abuse symptoms) such that a prudent layperson could reasonably expect absence of emergency services to result in serious jeopardy, impairment, dysfunction, harm, or obstetric emergency scenarios.
ExamplesSpecifically lists risks like jeopardy to health, impairment to body functions, organ dysfunction, serious harm related to substance abuse, injury to self/others, and obstetric risks where transfer is unsafe.
PPS rate components and adjustments
PPS rate components overviewDefinitions and calculations related to PPS nursing facility rate components, including FY 98 rebasing, G&A incentive adjustments and ceilings, small facility adjustments, and GET adjustment multiplier.
FY 98 rebasingThe rebasing used cost reports for fiscal years ending during the state fiscal year ending June 30, 1995; resulting basic PPS rates effective July 1, 1997.
GET adjustmentA proprietary provider multiplier to reimburse gross excise taxes; specified as 1.04167 (subject to revision if tax rates change).
Lawfully present non-citizen
Lawfully present non-citizenA noncitizen who meets specified immigration categories (qualified non-citizen, valid nonimmigrant status, certain parolees, TPS, employment-authorized applicants, family unity beneficiaries, deferred action, withholding of removal, asylum applicants with employment authorization, Special Immigrant Juvenile applicants, American Samoa lawful presence, trafficking victims, etc.).
ExclusionsCertain deferred action categories (e.g., DACA) are not considered lawfully present for the purposes of specified categories.
Medical necessity
Medical necessity (department standard)Procedures and services determined by the department to be necessary and payable, supported by sufficient peer-reviewed evidence demonstrating intended effects on health outcomes and that benefits outweigh harms.
Evidence requirementsEvidence must be peer-reviewed, well-controlled, relate to health outcomes, reproducible, and demonstrate the intervention is the most cost-effective method available.
Payment implicationOnly medically necessary interventions, as defined, are considered payable by the department.
Medical necessity (alternate)
Medical necessity (alternate phrasing)Procedures and services determined by the department to be necessary and payable; interventions must have sufficient evidence of benefit outweighing harm, be cost-effective, peer-reviewed, well-controlled, related to health outcomes, and reproducible.
Decision factorsBenefit versus harm, quality of evidence, reproducibility, and cost-effectiveness are considered.
Medically frail
Medically frail criteriaIncludes individuals with disabling mental disorders (children with serious emotional disturbances and adults with serious mental illness), serious and complex medical conditions, significant impairments in activities of daily living, or disability determinations under the Social Security Act.
ImplicationDesignates individuals who may require special consideration in Medicaid program eligibility and services.
Medically needy
Medically needyFamilies, children, aged, blind, or disabled individuals otherwise eligible for Medicaid whose income exceeds standards but may be reduced by incurred medical or remedial expenses to establish eligibility.
Resource limitsResources must be within limits set under the State Plan; spenddown of excess income by medical expenses can qualify an individual.
Nursing facility (NF)
Nursing facility (NF)A licensed facility providing 24-hour assistance with activities of daily living, nursing and paramedical care, and potentially 24-hour skilled nursing care and rehabilitation as referred by a physician.
ScopeIncludes free-standing facilities or distinct parts of facilities licensed and certified to provide appropriate care to individuals referred by a physician.
Nurse practitioner (for NF/ICF-ID)
Nurse practitioner (NF/ICF-ID)A registered professional nurse licensed in the state who meets certification or formal educational/practice criteria in gerontology or intellectual disability to function in an expanded role.
Alternate qualificationsMay qualify via a one-year academic program with supervised clinical practice or by functioning in an expanded role for 12 of the prior 18 months if the program standards are not met.
PPS / PPS rate
PPS / PPS rateProspective Payment System and the annual rate assigned to each Medicaid institutional provider; includes concepts such as rebasing, total PPS rate, and various adjustments.
ComponentsBasic PPS rate plus applicable adjustments, additions, or increases defined in the chapter constitute the total PPS rate.
State plan (Hawaii Medicaid state plan)
State plan (Hawaii Medicaid state plan)The DHHS-approved document that defines how Hawaii operates its Medicaid program, addressing administration, eligibility, service coverage, and provider reimbursement.
FunctionServes as the authoritative framework for program administration and benefit definitions under Title XIX and related authorities.
Severe, disabling mental illness
Severe, disabling mental illnessMental disorders with impairments that substantially interfere with community living without long-term treatment/services, including SMI/SPMI/SEBD, causing long-term limitations in activities of daily living.
Examples of impactMay affect interpersonal relationships, homemaking, self-care, employment, and recreation due to long-term functional limitations.
Qualified Medicare Beneficiary (QMB)
Qualified Medicare Beneficiary (QMB)An individual entitled to Medicare Part A with resources and income limits defined under SSI methodologies and federal poverty guidelines; eligible for certain Medicare cost-sharing assistance.
Program roleQMB status affects eligibility for payment of Medicare premiums or cost-sharing on behalf of beneficiaries.
Respite care
Respite careTemporary institutional, community, or home-based services providing relief to usual caregivers.
Use caseProvided when caregivers need temporary relief from caregiving responsibilities.
Transportation
Transportation (definition)Travel or transfer by taxicab, air and ground ambulance, out-of-state or inter-island airline to, from, or between medical facilities and other providers.
ScopeIncludes multiple modes of transport used to facilitate access to medical care.
Tenancy in common
Tenancy in commonOwnership by two or more individuals with undivided, possibly unequal interests; owners may sell interest without others' consent.
ConveyanceIndividual owners may convey their interest independently.
Tenancy by the entirety
Tenancy by the entiretyOwnership by two individuals via marriage, civil union, or reciprocal beneficiary agreement with automatic survivorship; neither can convey interest without consent; converts to tenancy in common upon dissolution.
SurvivorshipRight of survivorship is automatic under this ownership form.
Terminally ill
Terminally illMedical prognosis that an individual's life expectancy is six months or less.
UsageApplied in contexts such as hospice eligibility and other time-limited end-of-life determinations.
Termination for providers
Termination for providersExclusion from participation by revoking a provider's billing privileges after appeals are exhausted or appeal timelines expire; not limited to a specified period; reenrollment required to regain privileges.
EffectProvider must reenroll with applicable program to have billing privileges reinstated.
Third party
Third partyAny individual, entity, or program that is or may be liable to pay all or part of expenditures for medical assistance.
Third party resourceAny resource or benefits from any source to which an eligible person may be entitled.
Transplantation
TransplantationGrafting of organs and tissues from the individual's own body or from another to replace diseased tissues or organs.
PurposePerformed to replace diseased tissue or organs.
Transportation (alternate)
Transportation (alternate)Travel or transfer by taxicab, air and ground ambulance, or airline to, from, or between medical facilities and other providers.
Modes includedGround and air ambulances, taxicab, inter-island or out-of-state airlines.
Unearned income
Unearned incomeCash received or available to be received by the household that is not classified as earned income.
ExamplesIncludes pensions, court-ordered settlements, royalties, annuities, and similar non-earned receipts.
Verification
VerificationUse of third party information or documentation to establish accuracy of statements from an individual.
PurposeEnsures factual basis for eligibility and other determinations by the department.
Visit
Visit (FQHC/RHC)A face-to-face encounter between an eligible beneficiary and a health care professional or person delivering services incident to the professional's practice.
Counting ruleMultiple encounters on the same day at a single location with more than one professional constitute a single visit, except when additional diagnosis or treatment is required after the first encounter.
Visiting consultant
Visiting consultantA Medicaid provider with specialist expertise not readily available on an island, recognized as a community specialist; includes specialists requested for second opinions or participation in treatment.
Use caseUsed when specific specialist expertise is needed but not locally available.
Wait-listed patient
Wait-listed patientAn individual who no longer requires acute care and is awaiting placement to a long-term care facility.
ContextReflects transitional status pending long-term care placement.
Wholesale average cost
Wholesale average cost (WAC)Wholesale acquisition cost defined as the list price paid by a wholesaler, distributor, and other direct accounts for drugs purchased from the wholesaler's supplier, generally the manufacturer's pre-rebate/discount price.
Pricing implicationRepresents pre-rebate, pre-discount list price used for drug pricing references.
Policy Summary
PayerHawaii Medical Service Association (HMSA)
PolicyDefinitions (Subtitle 12, Title 17 — Med-QUEST Division)
Policy CodePolicy N/A
Change TypeNo material changes (informational definitions chapter)
Effective DateAug 1, 1994
Next Review DateN/A
Key ActionUse the chapter's defined terms to interpret coverage, eligibility, notice, and payment rules across Subtitle 12.
SourceLink
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