Southwest Consulting Associates Blog

Earlier this week, CMS posted a notice on its website granting a 31-day extension to IPPS hospitals in Texas, Louisiana, Florida, Georgia, South Carolina, Puerto Rico and the U.S. Virgin Islands to submit FFY 2014 and FFY 2015 Worksheet S-10's.  This comes on the heels of Hurricane Harvey, Irma and Maria, the President declaring a state of emergency and the HHS Secretary declaring a public health emergency for Texas, Louisiana, Florida, Georgia, South Carolina, Puerto Rico and the U.S. Virgin Islands.  Both the President and HHS Secretary's actions allow CMS to put in place programmatic waivers based on Section 1135 of the Social Security Act.

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:

The 2018 IPPS Final Rule was published in the Federal Register on August 14, 2017. The finalized changes will go into effect October 1, 2017. The Federal Register version can be viewed HERE (Medicare DSH begins on page 38189).  Below is SCA’s brief, yet comprehensive summary on the Medicare DSH/Uncompensated Care payment portion of the final rule as it will affect DSH hospitals.

The 2018 IPPS Final Rule was put on display for public inspection on August 2, 2017 and is scheduled to be published in the Federal Register on Monday, August 14, 2017.  The pre-publication version can be viewed HERE (Medicare DSH begins on page 771).  SCA will be reviewing and analyzing the details of the final rule and its components and we will provide more detailed conclusions soon.

The FY 2018 IPPS proposed rule was published April 28, 2017. Public comments have been submitted and we are awaiting the final rule.  For reference, the 2017 IPPS final rule was posted the first week in August 2016 so we are on the cusp on the 2018 final rule.  

In our last proposed rule post, while we stated that there was a brief moment of deja vu with regards to using Worksheet S-10 to distribute the uncompensated care payment to qualifying Medicare DSH hospitals for FY 2018, we also stated that based on the language used in the proposed rule, we believe that the change will stick this time.  Despite challenges on the accuracy of Worksheet S-10 data, CMS goes out of their way to lay out the reasoning for using S-10 now.  And, with the issuance of Transmittal 1863 and the notice about FY 2014 S-10 revisions, our case may be even stronger now.   From experience, we all know that anything can happen but we think Medicare DSH hospitals should take notice (and quickly) with this proposed rule, subsequent Transmittal and Notice and prepare themselves as best they can to deal with this significant change. Here’s what we recommend hospital’s be working on in advance of the final rule, in order of priority.

On Thursday, July 13, 2017, CMS announced that “amended FY 2014 cost reports due to revised or initial submissions of Worksheet S-10 received by Medicare Administrative Contractors on or before September 30, 2017, will be uploaded to the Healthcare Cost Report Information System by December 2017”.  In its announcement, CMS stated that “hospitals have requested CMS provide them with an additional opportunity to revise the Worksheet S-10 submitted with their FY 2014 cost reports (starting on or after October 1, 2013, and prior to October 1, 2014)”.

On July 7, 2017, CMS posted the FFY 2015 SSI ratios to their website.  The FFY 2015 SSI ratios should be used for computing the Disproportionate Share Hospital payment for cost reporting periods beginning on or after October 1, 2014, and before October 1, 2015.  The FFY 2015 SSI ratio file (DSH Adjustment and 2014-2015 File [ZIP, 266KB]) can be found in the Downloads section of CMS' Disproportionate Share Hospital (DSH) webpage or by following the link below:

On Friday, June 30, 2017, CMS released Transmittal 1863 (beginning on page 2), which included, among other items, guidance for MACs to follow for accepting cost reports containing revised Worksheet S-10 information. Similar to last year's Transmittal 1681, in order for MACs to accept amended cost reports due to revisions to Worksheet S-10 for FY 2015, CMS has put providers on notice by stating that “hospitals must submit their amended cost report containing the revised Worksheet S-10…no later than September 30, 2017.” CMS added, “Submissions received on or after October 1, 2017 will not be accepted.”

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?