NOTICES
Inpatient Hospital Services
[29 Pa.B. 3258] The purpose of this announcement is to provide advance public notice of the Department of Public Welfare's (Department) intent to revise its payment method for inpatient hospital services effective July 1, 1999. These revisions will affect acute care general hospitals, private psychiatric hospitals, psychiatric units of general hospitals, rehabilitation hospitals and rehabilitation units of general hospitals.
The Department is discussing with representatives of the hospital industry the possibility of extending the existing Hospital Rate Agreement (Agreement) which governs the payment methods and standards applicable to hospitals participating in the Medical Assistance program. The Agreement was effective July 1, 1997, and expires on June 30, 1999. If a revised Agreement is adopted by the Department and participating hospitals, the Department expects the payment provisions to be generally similar to those set forth in the current Agreement.
In the absence of a revised rate agreement, the Department intends to adopt the following significant changes to its hospital payment systems effective July 1, 1999:
1. The rebasing of inpatient hospital rates to Fiscal Year 1993-94.
2. The acute care general hospital prospective capital add-on will be adjusted to reflect the ratio of capital to operating costs for Fiscal Year 1993-94.
3. A revision to the inpatient disproportionate share criteria. The Department has been utilizing criteria that exceed minimum Federal requirements. The revisions would reflect minimum Federal requirements.
4. The discontinuation of direct medical education payments. These payments relate to costs that need not be incurred by hospitals to achieve licensure or certification to participate in the Medical Assistance program and are not required to be made under either Federal or State law.
5. The discontinuation of outpatient disproportionate share payments which are not required to be made under either Federal or State law.
6. For the acute care general hospital, psychiatric hospital and rehabilitation hospital inflation factor, the use of the DRI/McGraw-Hill, PPS type hospital, market basket index, with adjustments that allow for cost and policy-related considerations not fully addressed by the DRI/McGraw-Hill Index.
7. Hospital-specific upper limits based on peer groupings for all hospital types. The Department has determined that a payment system base that relies on each hospital's historical costs allows inefficient hospitals to receive excessive payments.
8. A total cost moratorium for new or additional beds and technical changes to the current capital moratoriums.
9. A moratorium on all new hospital enrollments in the Medical Assistance program.
The Department is also considering the discontinuation of exceptional payments to financially distressed hospitals.
Fiscal Impact
This change will result in a savings of $59.062 million in total funds ($26.940 million in State funds and $32.122 million in Federal funds) for Fiscal Year 1999-00.
Contact Person
A copy of this notice is available for review at local county assistance offices. Interested persons are invited to submit written comments to this notice within 15 days of this publication. These comments should be sent to the Department of Public Welfare, Office of Medical Assistance Programs, c/o Deputy Secretary's Office, Attention: Suzanne Love, Room 515 Health and Welfare Building, Harrisburg, PA 17120.
FEATHER O. HOUSTOUN,
SecretaryFiscal Note: 14-NOT-210. No fiscal impact; (8) recommends adoption. This change will result in a savings of $26.94 million in State funds in 1999-2000.
[Pa.B. Doc. No. 99-1024. Filed for public inspection June 25, 1999, 9:00 a.m.]
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