The 2016 IPPS Proposed Rule for Acute Care Hospitals was put on display on April 17, 2015. All comments to the rule were to be submitted by June 16, 2015. As in past years, Southwest Consulting Associates (SCA) performed extensive analysis of the Proposed Rule and submitted detailed comments in response to CMS’ 2016 IPPS Notice of Proposed Rulemaking (NPRM). SCA’s comments primarily related to the proposed changes to the Payment Adjustment for Medicare Disproportionate Share Hospitals (DSH) including the Uncompensated Care (UC) payment component.
A recurring theme in the comment letter was lack of transparency included in the proposed rule as to the methodologies, calculations and data sources. SCA was required to make various assumptions backing into calculations in an at-attempt to reverse engineer the estimates calculated by CMS. CMS should fully disclose, document and explain the methods and sources used to produce the proposed factors in the NPRM.
Other highlights of SCA’s comment letter include:
Lack of addressing Allina v. Sebelius with regards to DSH/Uncompensated Care
Factor 1
Erroneous payment factors applied
Missing impact of Medicaid expansion
Missing impact of Allina
Best data for estimates will not be available until cost reports are settled
Factor 2
Full impact of estimated 2016 insurance coverage applied
No transparency of CBO report projecting insurance coverage Factor 1 vs. Factor 2 data correlation
Factor 3
Missing impact of Allina
Data anomalies inappropriately distribute UC reimbursement
Change in cost report year adds level of complexity
S-10
Data anomalies still present
What action can we expect?
Questions/Action Items for CMS:
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In addition to providing transparency, CMS should explain how Medicaid/CHIP expansion assumptions were derived for the Factor 1 DSH estimate and how those assumptions reconcile with the Medicaid enrollment increase used in the Factor 2 offset calculation. This should include making all work papers and analysis available for public review. To the extent that CMS is relying on information obtained from other government sources, such as the CBO, CMS should make the data used to compute those estimates and assumptions available as well.
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Factor 1 does not appear to include the DSH impact of adding 12 million Medicaid/CHIP enrollees, which represents the amount CMS is using for the purpose of computing Factor 2. CMS should explain how it is accounting for the “increase” in DSH with the “Other” payment factor of .9993, 1.0485 and 1.0446? CMS should also explain in detail how this factor correlates with the 32% increase in Medicaid/CHIP enrollees per Factor 2 and afford interested parties an opportunity to comment on the data, method and calculations used to make that projection before it becomes final.
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What happens upon audit when Medicaid days (applied to Factor 3) are adjusted by the MAC?
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Will the MAC recoup UC reimbursement for erroneous Medicaid days applied to Factor 3?
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Will recouped UC dollars be redistributed to all remaining providers? CMS should provide a schedule outlining when amended cost reports need to be submitted to the MAC and incorporated into HCRIS for the applicable rule making period for purposes of Factor 3.
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What activities are underway at the Agency regarding conversion to S-10 uncompensated care?
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Is there a timeline for issuing revised instructions/clarification/standardization of S-10?
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Is there a timeline for incorporating S-10 into UC reimbursement?
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The result of the court’s decision in Allina v. Sebelius should be incorporated in Factor 1.
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How will MA days be incorporated into Factor 3 based on the Allina v. Sebelius decision?
SCA’s comment letter can be viewed in its entirety on our website under the resources tab or using the following web address:
www.southwestconsulting.net/images/2016_IPPS_NPRM_Comments_SCA.pdf
Did your submitted comments vary from the contents of SCA's comment letter or would you just like to discuss the proposed rule further? If so, we'd love to hear from you. Please use the form below or email us at contactSCA@southwestconsulting.net.
