Southwest Consulting Associates Blog

In the past, hospitals reported Medicaid days on their as-filed cost report and typically revised their Medicaid days upon secondary/tertiary review to pick up retroactive eligibility determinations and additional DSH reimbursement.  The revised days were usually settled by the MAC via audit, reopening or appeal.

Under the new DSH/UC formula and current regulatory environment, that process is not a “best practice”. Hospitals will continue to realize the benefit of additional Medicaid days for their 25% empirically justified DSH reimbursement, however, the UC piece will only use Medicaid days based on the following timeline to calculate Factor 3:

Hospitals are now under pressure to meet accelerated reporting deadlines in order to have a meaningful impact on Factor 3.  The best course of action is to devote resources to the as-filed cost report.  Any Medicaid days omitted from the as-filed cost report are at risk from being excluded from the pending Factor 3 calculation, thus resulting in lost reimbursement.

Here is a simulation of the Medicaid days time crunch:

The hospital in this simulation has only 4 months after cost report filing to identify all additional Medicaid days, amend the cost report, pursue MAC acceptance and have the accepted cost report transmitted to CMS for inclusion in the Q1 2015 HCRIS file.

Under the new DSH/UC reimbursement formula, hospitals have another reason to be good stewards of the Medicaid days reported on their as-filed cost report or risk losing reimbursement. Hospitals should plot out the key milestone dates (based on their FYE) for amending the cost report and work diligently with the MAC to meet appropriate filing deadlines in order to optimize reimbursement.