NOTICES
DEPARTMENT OF
HUMAN SERVICES
Disproportionate Share Payments to Qualifying Hospitals
[51 Pa.B. 2600]
[Saturday, May 8, 2021]The Department of Human Services (Department) is announcing its intent to establish a new class of disproportionate share hospital (DSH) payments for qualifying acute care general hospitals in Fiscal Year (FY) 2020-2021. These payments will provide financial relief to hospitals and promote access to acute care services for Pennsylvania Medical Assistance (MA) beneficiaries during the novel coronavirus (COVID-19) pandemic. In addition, the Department is revising the payment reconciliation process to account for this new class of DSH payments.
Background
Since 2010, the Department has imposed a monetary assessment on the net inpatient revenue of licensed hospitals in this Commonwealth, other than exempt hospitals under Article VIII-G of the Human Services Code (code) (62 P.S. §§ 801-G—816-G). The code was amended by the act of June 22, 2018, (P.L. 258, No. 40) (Act 40), effective July 1, 2018, to authorize the Department to also assess the net outpatient revenue of those hospitals. As required by section 805-G of the code (62 P.S. § 805-G(a)), funds generated by the hospital assessment on both net inpatient and outpatient revenues are deposited into a restricted account called the Quality Care Assessment Account. The funds are used to make MA payments to hospitals and managed care organizations for inpatient and outpatient services, described in section 805-G(a)(1) and (2) of the code, as well as other purposes as approved by the Secretary for inpatient hospital, outpatient hospital and hospital-related services. The Department intends to use a portion of these funds for COVID-19 relief DSH payments.
Qualifying Criteria
A hospital is eligible for this additional class of DSH payments if the hospital is enrolled in the MA Program as an acute care general hospital, and the hospital submitted a FY 2017-2018 MA-336 hospital cost report.
Payment Methodology
The Department will determine a qualifying hospital's annual payment amount by multiplying the hospital's number of Pennsylvania MA inpatient acute care days, both fee-for-service and managed care, by either:
a) $127.50 for qualifying hospitals with at least 90% MA dependence percent ranking; or,
b) $102 for qualifying hospitals with at least 75% but less than 90% MA dependence percent ranking; or,
c) $76.50 for qualifying hospitals with at least 50% but less than 75% MA dependence percent ranking; or,
d) $51 for qualifying hospitals with less than 50% MA dependence percent ranking.
For purposes of these DSH payments, the Department determines each hospital's MA dependence statistic by dividing the hospital's Pennsylvania MA inpatient acute care days, both fee-for-service and managed care, by the hospital's total hospital inpatient acute care days. The Department determines each hospital's MA dependence percent ranking using the hospital's MA dependence statistic in relation to all eligible hospitals. The source of the information is the FY 2017-2018 MA-336 Hospital Cost Report, as available to the Department on April 7, 2020.
All payment limitations are still applicable, including those limitations that the Commonwealth may not exceed its aggregate annual DSH allotment and that no hospital may receive DSH payments in excess of its hospital-specific limit. The Department will not redistribute DSH payments made under this class of DSH payments to qualifying hospitals as a result of a qualifying hospital exceeding its hospital-specific DSH limit.
Payment Reconciliation
The Department intends to modify the payment reconciliation process used to determine the available funding for certain MA payments funded with assessment revenues. Specifically, the Department is proposing to:
a) Include the COVID-19 Relief DSH payment in the annual payment reconciliation process and compare the allocated payment amounts for these payments to projected and actual payment amounts as part of the reconciliation factor calculation; and,
b) Change the amount of available funding for payments to be reconciled to $353.639 million (and of this amount, the portion attributable to the inpatient disproportionate share payments and direct medical education payments is $40.959 million).
The Department is not otherwise changing its approved State Plan provisions addressing the payment reconciliation process.
Fiscal Impact
The FY 2020-2021, the Department will allocate an annualized amount of $128.724 million in total funds (State and Federal) for these DSH payments upon approval by the Centers for Medicare & Medicaid Services, adjusted to reflect the reconciliation factor described in Part VI of the Pennsylvania State Plan.
Public Comment
Interested persons are invited to submit written comments regarding this proposed payment to the Department of Human Services, Office of Medical Assistance Programs, c/o Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120. The Department will review and consider comments received within 30 days in determining the final payment methodology for these payments.
Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania Hamilton Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
MEG SNEAD,
Acting SecretaryFiscal Note: 14-NOT-1437. (1) General Fund; (2) Implementing Year 2020-21 is $0; (3) 1st Succeeding Year 2021-22 is $53,549,000; 2nd Succeeding Year 2022-23 through 5th Succeeding Year 2025-26 are $0; (4) 2019-20 Program—$344,107,000; 2018-19 Program—$342,544,000; 2017-18 Program—$477,690,000; (7) MA—Fee-for-Service; (8) recommends adoption. Funds have been included in the proposed budget to cover this increase.
[Pa.B. Doc. No. 21-721. Filed for public inspection May 7, 2021, 9:00 a.m.]
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