NOTICES
DEPARTMENT OF
PUBLIC WELFARE
Additional Class of Disproportionate Share Payments for Critical Access Hospitals and Qualifying Rural Hospitals
[39 Pa.B. 4823]
[Saturday, August 8, 2009]The Department of Public Welfare (Department) is providing final notice of the establishment of an additional class of disproportionate share hospital (DSH) payments for qualifying hospitals based on the designation as a Critical Access Hospital (CAH) or as a qualifying rural hospital.
The Department previously published notice of its intent to establish this additional class of DSH payment for qualifying hospitals based on the designation as a CAH or as a qualifying rural hospital at 39 Pa.B. 1594 (March 28, 2009). The Department received written comments from three hospitals located in counties of the 5th class during the public comment period. The comments were very similar and requested that the Department extend eligibility for this DSH payment to qualifying rural hospitals located in counties of the 5th class. The commenting hospitals stated that such an expansion would assist additional safety net hospitals and have only a limited impact on other qualifying hospitals.
The Commonwealth is dedicated to ensuring the availability of quality care to individuals in rural areas across the Commonwealth. To maintain the system for rural health services, the Department proposed the establishment of an additional class of DSH payments for CAHs and qualifying rural hospitals. CAHs are defined as any hospital that has qualified under section 1861(mm)(1) of the Social Security Act (42 U.S.C. § 1395x(mm)(1)) (relating to definitions) as a ''critical access hospital'' under Medicare. The Department proposed to define a qualifying rural hospital as an acute care general hospital that is licensed as a hospital under the Health Care Facilities Act (35 P. S. §§ 448.101--448.904b) that meets all of the following criteria:
(a) Located in a county of the 6th, 7th or 8th class that has no more than two Medical Assistance (MA)-enrolled acute care general hospitals.
(b) Located in a county that has greater than 17% of its population that are eligible for MA or has greater than 10,000 persons eligible for MA.
(c) Has no more than 200 licensed and staffed beds.
(d) Does not qualify as a CAH under section 1861(mm)(1) of the Social Security Act (42 U.S.C. § 1395x(mm)(1)).
Although the Department understands the issues that hospitals located in counties of the 5th class may face, it is unable to expand the criteria for qualifying rural hospitals at this time. Under its proposed payment methodology, the Department will pay CAHs 101% of allowable inpatient and outpatient MA costs after deducting all other MA payments. After making payments to CAHs, the Department will distribute any remaining funds to qualifying rural hospitals. The Department will distribute the remaining funds to qualifying rural hospitals with 50% of the funds being divided equally among all qualifying rural hospitals and with 50% of the funds being distributed based on each qualifying hospital's percentage of MA Fee-for-Service (FFS) discharges as compared to all qualifying hospitals' total MA FFS discharges.
For the 2008-2009 Fiscal Year (FY), 12 hospitals located in counties of the 6th, 7th and 8th class are eligible for this limited funding allocated in the Commonwealth budget. There are 22 acute care general hospitals located in the nine counties classified as counties of the 5th class and 7 acute care general hospitals would qualify for this additional class of DSH payment if eligibility were extended to counties of the 5th class. Given the limited amount of funding available for this DSH payment, the Department has determined to limit the payment to those hospitals located in the most rural areas of the Commonwealth. The Department accordingly will implement the payment methodology for the DSH payment described in its notice of intent published at 39 Pa.B. 1594.
Fiscal Impact
The FY 2008-2009 fiscal impact, as a result of this additional class of DSH payments is $10.748 million ($4.888 million in State General Funds and $5.860 million in Federal Funds upon approval by the Centers for Medicare and Medicaid Services). These payments are provided for in the FY 2008-2009 Critical Access Hospital appropriation.
ESTELLE B. RICHMAN,
SecretaryFiscal Note: 14-NOT-614. (1) General Fund; (2) Implementing Year 2008-09 is $4.888M; (3) 1st Succeeding Year 2009-10 is $0M; 2nd Succeeding Year 2010-11 is $0M; 3rd Succeeding Year 2011-12 is $0M; 4th Succeeding Year 2012-13 is $0M; 5th Succeeding Year 2013-14 is $0M; (4) 2007-08 Program--$0; 2006-07 Program--$0; 2005-06 Program--$0; (7) MA--Critical Access Hopsitals; (8) recommends adoption. Funds have been included in the budget to cover this increase.
[Pa.B. Doc. No. 09-1423. Filed for public inspection August 7, 2009, 9:00 a.m.]
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