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PA Bulletin, Doc. No. 99-166


Response to Comments Received Regarding Public Notice Published on December 26, 1998 (28 Pa.B. 6350)

[29 Pa.B. 617]

   On December 26, 1998, the Department of Public Welfare (Department) published a public notice entitled Public Notice of the Department's Intent to Revise Community Access Disproportionate Share Payments (28 Pa.B. 6350). In response to that public notice, the Department received several comments. The commentators expressed concern that: 1)  the Department's database as it related to children's hospitals may be flawed; 2)  the method of using a Statewide average discriminates against small facilities; 3)  the Department inappropriately includes out-of-State (OOS) facilities in the Community Access Fund (CAF) charity care component; and 4)  the CAF is intended to offset the financial impact of Act No. 1996-35 (Act 35) and OOS facilities were not adversely impacted by this Act.

   Departmental response:

   1)  The database used in the CAF methodology was drawn from the 1995-96 inpatient hospital cost reports as submitted by the hospitals. These cost reports are certified by the hospitals as true and accurate. Any issues with the data therefore are the result of errors made by the hospitals submitting this information to the Department.

   2)  The concept of using a Statewide average is not new. In calculating Medical Assistance reimbursement for inpatient services, the Department utilizes Statewide averages in a number of instances, including the computation of relative values and the prospective capital add-on. Recognizing that several large volume hospitals incur the bulk of charity care costs, the Department limited payments under this component to $750,000 to prevent a handful of hospitals from consuming all available funds. The Department disagrees with the assertion that small hospitals have been discriminated against. Of the 42 hospitals which qualify for the charity care component of the CAF, 21 of them have less than 350 beds. Of those 21 facilities, 14 have less than 300 beds.

   3)  There are only two OOS facilities which qualify for CAF payments. Since these facilities serve a large number of Pennsylvania MA recipients and in some instances more Pennsylvania MA recipients than some in-State hospitals, they should not be eliminated from the CAF proposal based solely on geography.

   4)  The assertion that the original CAF was intended to ease the financial impact of Act 35 on certain hospitals is correct. The CAF was developed in April 1997 and at that time criteria were developed to provide additional payments to certain hospitals which rendered uncompensated care and which the Department projected would have experienced a significant discontinuation of revenue as a result of MA program revisions.

The Fiscal Year 1998-99 General Appropriations Act had no requirement that the funds be allocated based on previously existing criteria. Although the Department included the previous criteria, the Department expanded the CAF to include a charity care component. The Department felt that continuing to strive to offset the financial impact of charity care was a logical and appropriate method of expanding the CAF.

   While the Department appreciates and values the comments received on this public notice, the comments do not merit the elimination of a program that will greatly benefit hospitals and ultimately, MA recipients. Therefore, the Department intends to proceed with the distribution of the CAF as proposed on December 26, 1998.


[Pa.B. Doc. No. 99-166. Filed for public inspection January 29, 1999, 9:00 a.m.]

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