Southwest Consulting Associates Blog

The 2016 IPPS Proposed Rule was put on display on April 17, 2015.  All comments to the rule are due by June 16, 2015.  Below is SCA’s brief, yet detailed take on the impact to Uncompensated Care Reimbursement (UC).

Quick Review of the DSH Payment Under ACA

As a result of the ACA, the amount of total DSH reimbursement a provider may receive for discharges beginning October 1, 2013, is now based upon two components:

• Empirically Justified Medicare DSH Payment

• Uncompensated Care (UC) Payment

The Empirically Justified Medicare DSH Payment is 25% of what Medicare DSH would have been under the pre-ACA formula.  More on that HERE!

On May 14, 2015, CMS posted the FY 2013 SSI ratios to their website.  The FY 2013 SSI ratios should be used for computing the Disproportionate Share Hospital payment for cost reporting periods beginning on or after October 1, 2012, and before October 1, 2013.  The FY 2013 SSI ratio file (DSH Adjustment and 2012-2013 File [ZIP, 274KB]) can be found in the Downloads section of CMS' Disproportionate Share Hospital (DSH) webpage or by following the link below:

CMS issued CMS Ruling 1498-R2 on April 22, 2015 concerning SSI ratios for periods before October 1, 2004. In addition, CMS also posted revised SSI ratios in accordance with the terms of the ruling.

CMS Ruling 1498-R was originally issued in 2010 as a result of the court’s decision in the Baystate case. Generally, the ruling called for the recalculation of SSI ratios for open cost reports and for properly pending Disproportionate Share Hospital (DSH) appeals on the Baystate issue, in accordance with the court’s ruling in that case. However, also included was a provision to incorporate into the revised ratios non-covered Part A days, which was contrary to CMS’ policy and practice during those years.

While Provider Reimbursement Review Board (PRRB) and/or Medicare Administrative Contractor (MAC) jurisdiction challenges used to be relatively infrequent occurrences, they have become more frequent and should be prepared for.  At some point in the provider’s appeal process, it is highly likely that the MAC, PRRB or both will challenge jurisdiction, and the PRRB will review the appeal documentation and record and determine whether the appeal stands up to the current threshold.  Unfortunately, through the end of 2014, the trend of PRRB jurisdictional decisions against providers continues to be the norm.

As promised, we have an update to share from our “Front & Center with SCA President, Michael Newell: Alert 10 In Action.” post.  Last week, a decision was issued by the Provider Reimbursement Review Board (PRRB) in Barberton Citizens Hospital v. CGS Administrators, LLC/Blue Cross Blue Shield Association  (Barberton) in which the PRRB ruled in favor of Barberton.  The PRRB concluded that it has jurisdiction to hear Barberton’s appeal to include additional Medicaid eligible days in the Medicare DSH calculation that were not included in the hospital’s as-filed cost report.  

Thursday November 20, 2014, I testified before the Provider Reimbursement Review Board (PRRB) in a jurisdictional hearing concerning the May 2014 issuance of PRRB Alert 10 that resulted from an adverse decision in the Danbury case. Much has been written about PRRB jurisdiction, and specifically, the Danbury decision and subsequent PRRB Alert 10 – including pieces authored by Southwest Consulting Associates. However, this was the first hearing that I am aware of since the issuance of Alert 10 to delve deeply into specifics of what that alert requires. If there was any question in your mind regarding the shift in the “jurisdictional” ground beneath providers’ feet, I am here to confirm for you that the ground is in fact shifting and the dominos are now falling.

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.

Filing an appeal with the Provider Reimbursement Review Board (PRRB) has transformed through metamorphosis several times over many years, resulting in a process littered with tripping points for providers seeking a hearing for an issue with which it is dissatisfied.  At some point in the provider’s appeal process, it is likely that the MAC, PRRB or both will challenge jurisdiction.  The PRRB will review the appeal documentation to determine whether the provider’s filing passes muster and can proceed past go (there’s that monopoly reference again).  

Unfortunately, most jurisdictional decisions being issued are resulting in providers not proceeding past go and appeals are being dismissed prior to providers’ cases being heard.  It is important that providers and/or their counsel continually review what is happening at the PRRB and evaluate their practices against the decisions rendered so that the rug is not pulled out from under their issues like in more than 80% of the cases we are about to review!

Earlier this week, the Department of Health and Human Services (HHS) released a brief projecting that 2015 enrollment through insurances exchanges will fall short of the original goals. The Congressional Budget Office (CBO) projected exchange enrollment of 13 million in its April 2014 report. The updated HHS projections place enrollment between 9 and 9.9 million.

Link:

HHS updated 2015 exchange projections

The concept of applying macro level projections of a new and politically charged healthcare system to actual reimbursement is faulty from the start.  There are too many variables to accurately predict final enrollment numbers. Many providers commented on the 2014 and 2015 proposed IPPS rules as to the potential impact of using enrollment estimates and asked for a reconciliation process to true-up projections to actual numbers.

Impact on Providers:

Being at the height of the fall cost reporting season, hospital reimbursement teams are busy compiling data to prepare cost reports in compliance with program laws, regulations and manual instructions. However, hospitals should not be turning a blind eye to changes CMS’ has signaled interest in but may not yet have fully enacted.

For example, in the 2015 IPPS Proposed Rules, CMS attempted to revise cost reporting regulations to require hospitals to appropriately claim costs in either the initial/as-filed cost report or an amended cost report (that must be accepted by the Medicare contractor to be of any value in this exercise), in order for a hospital to potentially be reimbursed for the specific item. Due to the number of comments on the issue, CMS delayed implementing this requirement, FOR NOW.  However, it is important to understand what CMS is trying to accomplish, its impact on cost reporting in general and its impact on Medicare DSH reimbursement.