On January 18, 2012, CMS published a proposed rule that would define “uninsured” for purposes of calculating the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments. The proposed rule would not modify state DSH allotment amounts. CMS will accept comments on the proposal until February 17, 2012.
On December 13, 2011, the House of Representatives approved H.R. 3630, the Middle Class Tax Relief and Job Creation Act of 2011, a wide-ranging bill making payroll tax, unemployment insurance, energy, and other policy changes. Among many other things, the bill would avert a scheduled 27.4% cut in Medicare physician fee schedule (MPFS) payments in 2012 under the statutory Sustainable Growth Rate (SGR) formula and instead provide for a 1% payment update in 2012 and 2013. The costs of the MPFS fix would be offset through a variety of health care policy changes, including reducing funding for the ACA prevention and public health fund and ACA insurance subsidies, cutting Medicare reimbursement for hospital outpatient evaluation and management office visit services; reducing bad debt reimbursement, and rebasing Medicaid disproportionate share hospital allotments. The legislation also would extend: the Medicare outpatient therapy cap exceptions process; certain ambulance add-on payments; the floor used in the physician work geographic adjustment; the Qualified Individual program that reimburses states for certain Part B premiums; and the Transitional Medical Assistance program. In addition, the bill would relax certain restrictions on the expansion of physician-owned hospitals. The measure also would increase Medicare Part B and D premiums for higher-income beneficiaries beginning in 2017. Note that the Senate is not expected to approve the House bill, and President Obama has announced that he would veto the bill if it does reach his desk. While Congress ultimately is expected to pass an SGR fix, the scope and timing of any such bill is uncertain at this time.
CMS published a proposed rule on August 3, 2011 that would implement statutory requirements and making technical corrections to various Medicaid and Children's Health Insurance Program (CHIP) regulatory provisions. Among other things, the proposed rule would: implement a new reconsideration process for administrative determinations to disallow Medicaid claims for federal financial participation (FFP); lengthen the time states have to credit the federal government for identified but uncollected Medicaid provider overpayments and provide for interest payment for amounts not credited within that time period; make conforming changes to the Medicaid and CHIP disallowance process to allow states the option to retain disputed federal funds through the new administrative reconsideration process (interest charges may accrue); and revise installment repayment standards and schedules for states that owe significant amounts. The rule also would make a technical correction to reporting requirements for disproportionate share hospital payments, revise internal delegations of authority, remove obsolete language, and correct other technical errors. Comments on the proposed rule will be accepted until September 2, 2011.
CMS has announced final federal share disproportionate share hospital (DSH) allotments for FY 2009 and the preliminary allotments for FY 2011. The agency also announced related limitations on aggregate DSH payments that states may make to institutions for mental disease and other mental health facilities for those periods. The notice provides background information on the methodology used to determine the state DSH allotments.
A recent OIG report analyzes the relationship between Medicaid disproportionate share hospital (DSH) payments and uncompensated care costs in seven states (Kansas, Louisiana, Missouri, New Jersey, New York, North Carolina, and Texas) during fiscal years 2003 through 2007. The OIG reports that, in the aggregate, state-owned institutions for mental disease received DSH payments averaging 92% of their uncompensated care costs and other state-owned hospitals received DSH payments averaging 95% of uncompensated care costs. On the other hand, local public hospital DSH payments averaged 69% of uncompensated care costs and private hospital DSH payments averaged only 38% of uncompensated care costs. The OIG recommends that CMS assess DSH payment distribution and consider requesting legislation to ensure a more even distribution of payments based on uncompensated care costs. CMS concurred with the recommendation.
CMS is requiring non-teaching hospitals to submit informational only bills for Medicare Advantage (MA) beneficiaries they treated in FY 2007 and FY 2008 on or before August 31, 2010 and submit a related attestation or before September 15, 2010. This requirement is a follow-up to a 2007 transmittal requiring all hospitals paid under the inpatient prospective payment system (PPS), inpatient rehabilitation facility PPS, and long term care hospital PPS to submit such data in order to determine the Supplemental Security Income ratio and accurately determine a variety of Medicare payment amounts. CMS has determined that many hospitals have not reported any MA days. CMS therefore is giving applicable hospitals one final opportunity to comply with the requirement to submit FY 2007 and 2008 informational only claims. In addition, these hospitals must attest in writing to their Medicare contractor that they have either submitted all of their MA claims for FY 2007 and 2008 or that they have no MA claims for that fiscal year. If a provider does not comply, CMS may instruct the contractor to use an SSI ratio of 0% to calculate Medicare disproportionate share hospital payments or take other action that may affect payments for the non-compliant providers.
CMS published a notice April 23, 2010 announcing the final FY 2008 and the preliminary FY 2010 federal share disproportionate share hospital (DSH) allotments and limitations on aggregate DSH payments that states may make to institutions for mental disease and other mental health facilities. In addition, the notice includes the revised preliminary federal share DSH allotments for FY 2009 and the revised preliminary FY limitations on aggregate state DSH payments to institutions for mental disease and other mental health facilities to reflect the American Reinvestment and Recovery Act of 2009. Separately, CMS has published the final allotments available to states to pay the Medicare Part B premiums for Qualifying Individuals (QIs) for FY 2009 and the preliminary QI allotments for FY 2010.
The GAO has issued a report entitled "Medicaid: Ongoing Federal Oversight of Payments to Offset Uncompensated Hospital Care Costs Is Warranted." The GAO’s review found that, among other things, certain states with large supplemental payments for uncompensated care costs did not calculate correctly the hospital-specific disproportionate share hospital (DSH) payment limits. In the report, the GAO recommends that CMS ensure that states account for all Medicaid payments, including non-DSH supplemental payments, when calculating payment limits.
This post was written by Karl A. Thallner, Jr., Carol C. Loepere, Debra A. McCurdy, Brad M. Rostolsky, Jacqueline B. Penrod, and Amie E. Schaadt.
On February 17, 2009, President Obama signed into law H.R. 1, the American Recovery and Reinvestment Act (the “ARRA”). The sweeping $790 billion economic stimulus package includes a number of health care policy provisions. Reed Smith's Health Care Memorandum summarizes the major health policy provisions of the Act.
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