On May 23, 2014, the Provider Reimbursement Review Board (PRRB) issued Alert 10 following its decision in Danbury Hospital v. Blue Cross Blue Shield Association (Danbury). This decision, and subsequent Alert, further signals a continuing trend relating to the documentation of Medicaid paid/eligible days and the importance of claiming all such “allowable costs” (or eligible patient days in the Medicare DSH context) in the initial cost report filing.
Alert 10, in conjunction with changes made to 405.1811(a)(1) and 405.1885(a)(1) in 2008 and the Agency’s interpretation of the United States Supreme Court decision in Bethesda Hospital Association v. Bowen, highlights the PRRB’s view regarding the requirement that hospitals must claim all allowable costs in its initial cost report filing and must show that any costs claimed through an appeal for Medicaid paid/eligible days could not have been claimed in the initial cost report filing. Let’s dig into this in more detail and review the actual Alert 10 requirements and why this is an issue that REQUIRES YOUR ATTENTION.
PRRB Alert 10 – Medicare DSH Appeal Requirements
Provide a detailed description of the process the provider used to identify and accumulate the actual Medicaid paid/unpaid days that were reported and filed on the Medicare cost report at issue.
Document the number of additional Medicaid paid/unpaid days that the provider is requesting to be included upon appeal.
Provide a detailed explanation as to why the additional paid/unpaid days at issue could not be verified by the state at the time of the cost report filing.
What PRRB Alert 10 Means
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. Further complicating the issue, is that the PRRB has not issued a standard by which their determinations will be made.
Although the industry did not necessarily foresee Alert 10 being issued, the trend toward limiting hospitals to costs claimed on the initial cost report has been gaining steam. The PRRB and Medicare Administrative Contractors have been steadily holding providers to a higher standard for some time now.
What Should I Do?
More than ever before, now is the time to have a consistent process for claiming “costs”, such as Medicare DSH, that fully addresses protest items, the filing of all allowable costs in the initial cost report, filing a timely cost report amendment(s) and appealing the issues protested or adjusted upon audit. The absence of a cohesive, consistent process is likely to result in hurdles and obstacles on the way to the successful settlement of appeals, or unfortunately, the dismissal of the appeal. If you have concerns whether your process will “pass muster” when compared to this Alert 10 standard, please give us a call to discuss some possible solutions.