NOTICES
Disproportionate Share and Supplemental Hospital Payments
[44 Pa.B. 3389]
[Saturday, June 7, 2014]The Department of Public Welfare (Department) is providing final notice of its continuation of 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 providing final notice of its continued use of the Fiscal Year (FY) 2012-2013 payment methodologies for inpatient DSH, outpatient supplemental and direct medical education payments and of its DSH and Supplemental Reconciliation process.
In addition, the Department is providing final notice of the process and data used to determine the eligibility of new hospitals for certain DSH and supplemental payments effective July 1, 2013.
Background
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 were 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 the Centers for Medicare and Medicaid Services' approval for the assessment and the payment changes.
The assessment under Act 49 was effective for a 3-year period ending June 30, 2013. The assessment and continuation of the hospital payments from the Quality Care Assessment Fund were reauthorized under the act of July 9, 2013 (P. L. 369, No. 55), effective for a 3-year period ending June 30, 2016.
Continuation of DSH and Supplemental Payments from the Quality Care Assessment Fund
The Department is continuing the following payments utilizing the FY 2012-2013 eligibility criteria and payment distribution methodologies: MA Stability Payments; MA Dependency Payments; Enhanced Payments to Certain Disproportionate Share Hospitals; and MA Rehabilitation Adjustment Payments. The Department is also continuing 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 have not been changed.
The Department modified the eligibility criteria for the Small and Sole Community Hospital DSH payment to include hospitals which provide verification to the Department as being designated as a sole community hospital by Medicare. Newly-designated sole community hospitals qualify for the payment program beginning with FY 2013-2014. The payment distribution methodology for this payment program remains the same as the FY 2012-2013 payment distribution methodology.
Finally, the Department is continuing its existing payment reconciliation process as described in the approved State Plan.
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 a hospital's eligibility for certain adjustments to its FFS APR-DRG Base Rate and 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 FFS APR-DRG Base Rate adjustments and DSH and supplemental payments due to the lack of required historical data.
Beginning in FY 2013-2014, the Department is instituting a process to collect data from new hospitals and newly designated sole community hospitals using forms designated by the Department. Beginning with a new hos- pital's first full State fiscal year of MA enrollment, the Department will use this data in lieu of the FY 2007-2008 MA hospital cost report data to determine whether a new hospital qualifies for the MA dependency and teaching adjustments to its APR-DRG Base Rate as well as the hospital's eligibility for the DSH and supplemental payments created in conjunction with Act 49 and, if eligible, the payment amounts. The payments for which a new hospital may qualify through this process are 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, excluding the new criteria provisions for sole community hospitals and payment methodologies for each of these payments was described in the 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 or newly designated sole community 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. The Department considers 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 and newly designated sole community 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.
The Department published notice of its intent to allocate funding for these DSH and supplemental payments at 43 Pa.B. 4034 (July 13, 2013). The Department received no public comments during the 30-day comment period, and will implement the changes as described in its notice of intent with the modification to the eligibility criteria for the Small and Sole Community Hospital Payment Program.
Fiscal Impact
The FY 2013-2014 impact is $566.426 million ($263.805 million in State general funds).
BEVERLY D. MACKERETH,
SecretaryFiscal Note: 14-NOT-871. (1) General Fund;
(7) MA—Inpatient; (2) Implementing Year 2013-14 is $235,853,000; (3) Estimated Costs for 1st Succeeding Year 2014-15 through 5th Succeeding Year 2018-19 are $0; (4) 2012-13 Program—$268,112,000; 2011-12 Program—$325,685,000; 2010-11 Program—$243,809,000;
(7) MA—Outpatient; (2) Implementing Year 2013-14 is $27,953,000; (3) Estimated Costs for 1st Succeeding Year 2014-15 through 5th Succeeding Year 2018-19 are $0; (4) 2012-13 Program—$450,835,000; 2011-12 Program—$645,095,000; 2010-11 Program—$467,929,000;
(8) recommends adoption. Funds have been included in the budget to cover this increase.
[Pa.B. Doc. No. 14-1210. Filed for public inspection June 6, 2014, 9:00 a.m.]
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