As we conclude the end of the first quarter subject to the 2016 OPPS Final Rule, hospitals MUST evaluate the new substantive reimbursement requirement (beginning on page 255 of the Federal Register 2016 OPPS Final Rule) recently imposed by CMS. Introduced in the 2015 IPPS Proposed Rule, and later adopted in the 2016 OPPS Final Rule, CMS incorporated into the regulations a concept initially introduced by the PRRB Board Rules in 2008.
In a nutshell, for cost reports starting on and after 01/01/2016, in order for hospitals to potentially qualify for Medicare reimbursement related to any given issue, they MUST have first made a cost report claim for such reimbursement. Alternatively, if the provider feels the reimbursement associated with a specific item does not adhere to current Medicare policy, they MUST file the cost report under protest. While the PRRB has been requiring the same treatment for cost reports starting on and after 12/01/2008, this shift from Board Rules surrounding jurisdiction over an issue to regulations governing cost report filings highlights the importance of this matter.
CMS sites several reasons surrounding this adoption, including advancing the “interests of administrative finality and efficiency”, claiming that MAC’s will have “an opportunity to correct any misconceptions that the provider may have had” concerning items filed under protest. In addition, asserting this adoption will “enhance CMS’ ability to accurately estimate the program’s potential liabilities”.
The good news, if you can call it that, is CMS clearly acknowledges one area where it may not be possible for providers to claim the appropriate cost at the time of the filing. Specifically, they note that the documentation of all Medicaid eligible patients claimed in the Medicare disproportionate share hospital (DSH) calculation may not be available due to various items outside of the provider’s control. In such instances, CMS states providers will continue to have the opportunity to submit amended cost reports. Further, CMS indicates they plan to instruct MACs to accept “one amended cost report submitted within a 12-month period after the hospital’s cost report due date, solely for the specific purpose of revising Medicaid-eligible patient days in order to calculate DSH payments after a hospital receives updated Medicaid-eligible patient days from the state”.
However, it’s not as easy as it may sound. Echoing the Medicare DSH appeal requirements set forth in PRRB Alert 10, CMS places strict parameters around amending a cost report for additional Medicaid eligible days. Specifically, the provider MUST:
- identify the number of additional Medicaid eligible days being sought in the amendment,
- describe the process used to identify the days claimed in the initial filing, and
- explain why the additional Medicaid days could not be verified at the time of the initial filing.
These requirements, which are impractical in many ways, contemplate some level of reasonable record keeping in order to support a hospital’s claim for additional Medicaid paid/unpaid days not claimed in the initial cost report filing. For hospitals using multiple processes for preparing Medicare DSH data (i.e. an internal process for the initial cost report filing and then a subsequent review by the hospital or an outside firm), proving any additional days found on a secondary run could not have been claimed in the initial filing could be challenging at best, impossible in all likelihood based on the information provided in state eligibility files.
It is yet to be seen how strictly the MACs will enforce these parameters, however, it is clear that simply filing an amended cost report with additional Medicaid eligible days without evidence of a robust Medicare DSH reimbursement program could be subject to rejection by the MAC. In SCA’s experience, the additional Medicaid eligible days that cannot be documented at the time of filing range anywhere (on average of) up to 6%.
More than ever before, hospitals MUST have a consistent process for claiming “costs” for Medicare DSH that fully addresses the filing of ALL allowable costs in the initial cost report, protest items and NOW, filing a timely cost report amendment(s). The absence of a cohesive, consistent process is likely to result in hurdles and obstacles on the way to the successful settlement of amended cost report filings, or unfortunately, the denial of the amendment. If providers do not adhere to the requirements set forth in this regulation, an amended cost report AND any additional DSH reimbursement, could fall to the wayside. If you have concerns whether your process will “pass muster” when compared to this regulation set forth in the 2016 OPPS Final Rule, please give us a call to discuss some possible solutions.
