On January 23, 2015, Michael Newell, SCA’s President, authored a blog article entitled 340B meets S-10, which can be found HERE. The impetus for this article was a report published by the Alliance for Integrity and Reform of 340B (AIR340B). In this article, the authors concluded that 340B hospitals appear to provide only a minimal amount of charity care thus calling into question whether or not Congress’ intentions for the 340B program are being met. The data used to reach this conclusion was derived from the Medicare Cost Report, CMS-2552-10, S-10 – the very data that CMS currently uses as the basis to allocate the uncompensated care pool for the Medicare DSH/uncompensated care program.
This issue is again in the news with two pieces of proposed legislation. The first, is a bill titled “340B Protecting Access for the Underserved and Safety-Net Entities ACT (340B PAUSE Act)”, which can be viewed HERE. The 340B PAUSE Act calls for a two-year moratorium on certain newly eligible 340B Hospitals and associated sites (i.e. child sites) while data is gathered and reported “to improve the transparency regarding how 340B hospital covered entities provide care for patients”. One such data set to be reported is related to uncompensated care. The bill specifically says, “With respect to each child site of such entity, the total costs incurred at each such site and the cost incurred at each such site for charity care as defined in line 23 of worksheet S-10 to the Medicare cost report or in any successor form.”
A second proposed bill titled, “HELPING Ensure Low-income Patients have Access to Care and Treatment (HELP Act)” proposes a similar two-year moratorium on certain newly eligible 340B Hospitals and associated sites while data is gathered, and this bill closely mirrors much of the language in the 340B PAUSE Act. Similarly, one data set to be reported is defined as “the patient mix, broken down by expected payment source” including many factors such as “the cost incurred at each site for charity care (as described in line 23 of Worksheet S-10 – Hospital Uncompensated Care Data to the Medicare cost report or as reported in any successor form).”
With these two proposed bills and the language in the House Energy and Commerce Report issued in January of 2018, it is clear that Congress is reviewing hospital 340B savings and drawing initial conclusions on how hospitals are using such savings in comparison to the cost of charity care provided by 340B covered entities. Further, the House E&C Report states, “The current metric used to determine hospital eligibility for the 340B program does not necessarily reflect the amount of charity care offered by the hospital or the 340B patient population for the hospital. Congress should consider whether an inpatient metric remains an appropriate measure for program eligibility, or whether another metric is more appropriate.”
Now, more than ever, hospitals should scrutinize the data reported on S-10 not only for Medicare DSH / Uncompensated Care pool program distribution purposes, but for potential reporting for the 340B Program. If the metric for 340B qualification is changed to an outpatient metric and Congress decides it should be based on uncompensated care provided (as heavily implied in the various documents), then the importance of data reported on Worksheet S-10 grows.
About SCA:
For 29-years, SCA has assisted client hospitals with key issues such as Medicare DSH, S-10 and 340B optimization. We have over 400 clients nationally in 46 states that have engaged us for one or more of our services. SCA completed 216 Worksheet S-10s in 2017 alone, of those, 172 were related to FFY 2014/2015 and beating the deadlines set by CMS.
For more information related to Worksheet S-10, see SCA’s resource pages here:
Worksheet S-10 Q&A Posted By CMS
CMS Transmittal 11 & Cost Report Worksheet S-10 Instructions
Overview of S-10 Medicare Cost Report Instructions
2018 IPPS Final Rule & "What To Do Now" Recommendations
