Southwest Consulting Associates Blog

In part 2 of our FY 2020 IPPS Proposed Rule Review series, we will take a look at the one DSH item included in the proposed rule that may be of some interest to you. It appears this item stems from the fact that there are a large number of PRRB appeals involving Medicaid eligible days and the agency is struggling for ways to deal with that issue. It appears that the agency recognizes that there is a legitimate issue to be addressed in terms of including all identified Medicaid eligible days in a hospital’s cost report, but that there might be a better way to proceed and alleviate the backlog of appeals on this issue at the Provider Reimbursement Review Board.

Hospitals nationwide have been undergoing Worksheet S-10 “reviews” for FY 2015 that in large part culminated at the end of January 2019. Since then, there has been word that additional technical direction was provided to MACs by CMS (not yet shared with hospitals) that addresses how to apply some “findings” from those reviews. Even though the current audit process has not been fully completed, there is much to learn about what has transpired so far and how that may impact future reviews or even future changes to cost reporting instructions.

Yesterday, CMS held an Open Door Call to discuss two agenda items, one of which was the posting of the FY 2020 hospital area wage index data and occupational mix public use file. As you know, according to the FY 2020 Hospital Wage Index Development Timetable, hospitals have until February 15, 2019 to submit correction requests regarding their data.

Last week, September 29, 2017, CMS issued Transmittal 11 that makes a number of revisions to the instructions for reporting data on cost report Worksheet S-10.  These instructions need to be incorporated into any FFY 2014 & FFY 2015 Worksheet S-10 revisions providers are working to submit by the October 31, 2017 deadline and then for any future year submissions. In particular, the changes include:

As we all now know, CMS proposed transitioning to the use of uncompensated care cost per worksheet S-10 in the IPPS 2017 rulemaking cycle. For many reasons that we have discussed in the past and that CMS reiterated in the last rulemaking cycle, that plan was not finalized. And although many people were left thinking that CMS was going to make some reforms to the definitions and reporting processes before going forward, they did leave the door open just a bit last year with regarding to moving forward with the change to S-10 in FY 2018. As we now know, they chose to squeeze through that opening and have finalized plans to begin the transition to using worksheet S-10 beginning in FY 2018. As overall justification, CMS stated:

Now that the FY 2018 IPPS final rule has been published, we think that you need to do some things that are both in the here and now AND in the future.  Here are some of the top priorities that we are managing for our clients:

On April 28, 2017, CMS published the FFY 2018 IPPS Proposed Rule in the Federal Register.  Go HERE for our summary of the Medicare DSH/Uncompensated care payment portion of the rule.  After years of discussion to use Worksheet S-10 uncompensated care data to distribute the Medicare DSH/UC pool always ending with CMS “kicking the can down the road”, it appears that CMS has finally dug their heels in.  Who else just had a moment of deja vu?  

On August 2, 2016, CMS posted the 2017 IPPS final rule. While we will provide a comprehensive summary of the rule in the near future, this post relates to the changes that CMS is making regarding Medicare DSH reimbursement and the use of cost report worksheet S-10 to calculate factor 3 for federal fiscal years 2018-2021. As you recall, in the 2017 proposed rule, CMS indicated that it would begin using S-10 to calculate factor 3, at least in part, beginning in FFY 2018. However, in the final rule CMS states: 

In anticipation of the upcoming 2017 IPPS proposed rule (usually put on display in mid-April), SCA has been focusing our attention on the possible changes to the Uncompensated Care (UC) reimbursement program.  Use as your backdrop the following facts:

• The 2016 uncompensated care pool (UCP) is $6.4 billion and all “eligible” hospitals are fighting for a piece of that pie.

• If the most recent filed S-10’s are used, it appears that there will be a dramatic shift in UCP dollars among States.

• If the most recent filed S-10’s are used, it appears that there will be a significant redistribution of UCP dollars among hospital types, with the general theme being a shift from proprietary and non-profit hospitals to government-owned hospitals (in the hundreds of millions of dollars).