Disproportionate Share and Supplemental Hospital Payments
[43 Pa.B. 4034]
[Saturday, July 13, 2013]
The Department of Public Welfare (Department) is announcing its intent to continue the additional class of disproportionate share hospital (DSH) payments and the additional classes of supplemental payments for inpatient hospitals that were initiated in conjunction with the act of July 9, 2010 (P. L. 336, No. 49) (Act 49). The Department is also announcing its intent to continue the Fiscal Year (FY) 2012-2013 payment methodologies for inpatient DSH, outpatient supplemental and direct medical education payments and to continue its DSH and Supplemental Reconciliation process.
In addition, the Department is announcing the process and data it intends to use to determine the eligibility of new hospitals for certain DSH and supplemental payments effective July 1, 2013.
Among other things, Act 49 added Article VIII-G to the Public Welfare Code (62 P. S. §§ 801-G—816-G) authorizing the Department to impose a monetary assessment on the net operating revenue of all Commonwealth licensed hospitals, other than exempt hospitals.
Under Act 49, funds generated by the hospital assessment must be deposited into a restricted account called the Quality Care Assessment Fund (see 62 P. S. § 805-G(a)) and are to be used to update the Medical Assistance (MA) fee-for-service (FFS) payment system for inpatient services for acute care general hospitals, modify some existing DSH and supplemental payments, create several new DSH and supplemental payments for MA hospital providers and generally support the MA Program. In compliance with Act 49, the Department imposed a monetary assessment, updated the MA FFS payment system for inpatient acute care services, modified some existing DSH and supplemental payments and created new DSH and supplemental payments for hospital providers after receiving Centers for Medicare and Medicaid Services (CMS) approval for both the assessment and the payment changes.
The assessment under Act 49 was effective for a 3-year period ending June 30, 2013. The Department and the hospital community are seeking to reauthorize the assessment and continue the hospital payments from the Quality Care Assessment Fund beyond June 30, 2013.
Continuation of DSH and Supplemental Payments from the Quality Care Assessment Fund
Subject to CMS's approval of the assessment and the hospital payments made from the Quality Care Assessment Fund, the Department intends to continue the following payment programs utilizing the FY 2012-2013 eligibility criteria and payment distribution methodologies; MA Stability Payments; MA Dependency Payments; Enhanced Payments to Certain Disproportionate Share Hospitals; MA Rehabilitation Adjustment Payments and Small and Sole Community Hospital DSH Payments. The Department also intends to continue Community Access Fund; Inpatient DSH; Outpatient Supplemental and Medical Education payments as modified under the Quality Care Assessment program. The methodology used to determine hospitals that qualify for these payments and the calculation of the payment amounts for each payment program will not be changed.
Finally, the Department intends to continue its existing payment reconciliation process for certain DSH and supplemental payments.
FFS All Patient Refined-Diagnosis Related Group (APR-DRG) Base Rate, DSH and Supplemental Payments for New Hospitals
The current State Plan methodologies for determining eligibility for the DSH and supplemental payments initiated in conjunction with Act 49 use historical MA data from FY 2007-2008. Accordingly, hospitals that were not required to file an FY 2007-2008 MA 336 hospital cost report (new hospitals) do not qualify for these DSH and supplemental payments due to the lack of required historical MA and Medicare data to determine whether to apply the MA dependency or teaching adjustment to a hospital's FFS APR-DRG Base Rate. Since a new hospital does not have this information on file, it does not qualify for either adjustment based on historical data.
Beginning in FY 2013-2014 and subject to CMS's approval of the assessment and the hospital payments made from the Quality Care Assessment Fund, the Department intends to institute a process to collect data from new hospitals using forms designated by the Department. The Department intends to use this data to determine whether a new hospital qualifies for the MA dependency and teaching adjustments for its APR-DRG base rate as well as the hospital's eligibility and, if eligible, payment amounts for the payment programs created in conjunction with Act 49 beginning with the hospital's first full State fiscal year of MA enrollment. The payment programs for which a new hospital may qualify through this process are limited to the MA Stability Payments; MA Dependency Payments; Enhanced Payments to Certain Disproportionate Share Hospitals; MA Rehabilitation Adjustment Payments and Small and Sole Community Hospital DSH Payments. A detailed description of the eligibility criteria and payment methodologies for each of these payments was described in a public notice published at 42 Pa.B. 6048 (September 22, 2012). For the first full State fiscal year of MA enrollment of a new hospital that qualifies for one or more of these supplemental or DSH payments, the payment amounts will be prorated in accordance with the period of time the hospital was in operation during its first year of enrollment in the MA Program. The Department intends to consider the rates and payments established for new hospitals as a result of this process to be interim rates and payments. The Department will reconcile the rates and payments once MA 336 hospital cost report data and other necessary Medicare data is available for the new hospital's first full State fiscal year of MA enrollment.
The eligibility criteria, payment distribution methodology and the source of data for all other DSH and supplemental programs in existence prior to the enactment of Act 49 remain unchanged and will continue to rely on historical data.
The FY 2013-2014 impact is $566.856 million ($264.005 million in State general funds).
Interested persons are invited to submit written comments regarding these proposed changes to the Department of Public Welfare, Office of Medical Assistance Programs, Attention, c/o Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120. Comments received within 30 days will be reviewed and considered for any subsequent revision of the notice.
Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
BEVERLY D. MACKERETH,
Fiscal Note: 14-NOT-837. (1) General Fund;
(7) MA—Inpatient; (2) Implementing Year 2012-13 is $0; (3) 1st Succeeding Year 2013-14 is $236,053,000; 2nd Succeeding Year 2014-15 through 5th Succeeding Year 2017-18 are $0; (4) 2011-12 Program—$325,685,000; 2010-11 Program—$243,809,000; 2009-10 Program—$371,515,000;
(7) MA—Outpatient; (2) Implementing Year 2012-13 is $0; (3) 1st Succeeding Year 2013-14 is $27,953,000; 2nd Succeeding Year 2014-15 through 5th Succeeding Year 2017-18 are $0; (4) 2011-12 Program—$645,095,000; 2010-11 Program—$467,929,000; 2009-10 Program—$435,939,000;
(8) recommends adoption. Funds have been included in the budget to cover this increase.
[Pa.B. Doc. No. 13-1261. Filed for public inspection July 12, 2013, 9:00 a.m.]
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