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PA Bulletin, Doc. No. 11-1025



Disproportionate Share and Supplemental Hospital Payments

[41 Pa.B. 3161]
[Saturday, June 18, 2011]

 The Department of Public Welfare (Department) is announcing its intent to change the formula used to calculate the disproportionate share hospital (DSH) payments to small and sole community hospitals and the Medical Assistance (MA) Rehabilitation Adjustment Payments authorized under the Commonwealth's Medicaid State Plan.


 The Department published a notice announcing its intent to modify certain existing DSH and supplemental payments and to establish several new DSH and supplemental payments to hospitals using revenues from the Quality Care Assessment Account at 40 Pa.B. 5536 (September 25, 2010). Following publication of this notice, the Department submitted a State Plan Amendment (SPA) to the Centers for Medicare and Medicaid Services (CMS) authorizing these changes. Among the DSH and supplemental payments included in the SPA were DSH payments to small and sole community hospitals and MA Rehabilitation Adjustment Payments. CMS approved the SPA authorizing these payments and their payment methodologies effective December 29, 2010.

Changes to the DSH Payments to Small and Sole Community Hospitals

 Since CMS approval of the DSH payments to small and sole community hospitals for Fiscal Year (FY) 2010-2011, the Department determined that additional hospitals qualify under the approved eligibility criteria for this payment. The Department is proposing to revise the payment percentage amount to conform to the amount allocated for these payments. The Department is proposing that payments to hospitals qualifying under the second criterion for this payment be changed from 27.3% to 24.6% of each qualifying hospital's calculated disproportionate OBRA 1993 limit. In addition, the Department recalculated all hospitals' disproportionate share OBRA 1993 limits using updated 2008-2009 cost report data. The Department intends to use these updated disproportionate share limits in the determination of payments for hospitals qualifying under criteria (a)(2) or (a)(3) for the DSH payments to small and sole community hospitals.

Changes to the MA Rehabilitation Adjustment Payment

 Under the approved SPA, freestanding rehabilitation hospitals that qualify for a MA Rehabilitation Adjustment Payment receive a payment amount equal to 92% of the total inpatient MA fee-for-service (FFS) payment amount made to the hospital as reported in the hospital's FY 2007-2008 MA cost report available to the Department as of July 2010. Since CMS approval of this payment, an additional $4.2 million has been allocated to this payment. The Department is proposing to increase the aggregate amount of the MA Rehabilitation Adjustment Payments to $18.619 million and the percentage used to determine the payment amount for each qualifying freestanding rehabilitation hospital to 116% of a hospital's FY 2007-2008 inpatient MA FFS payments.

Fiscal Impact

 The FY 2010-2011 fiscal impact, as a result of changes to the DSH payments to small and sole community hospitals and the MA Rehabilitation Adjustment payments is $4.198 million ($2.336 million in Federal funds and $1.862 million in State funds upon approval by CMS).

Public Comment

 Interested persons are invited to submit written comments regarding this notice to the Department of Public Welfare, Office of Medical Assistance Programs, c/o Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120. Comments received within 30 days will be reviewed and considered for any subsequent revision of the notice.

 Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).

Acting Secretary

Fiscal Note: 14-NOT-692. (1) General Fund; (2) Implementing Year 2010-11 is $1,862,000; (3) 1st Succeeding Year 2011-12 is $0; 2nd Succeeding Year 2012-13 is $0; 3rd Succeeding Year 2013-14 is $0; 4th Succeeding Year 2014-15 is $0; 5th Succeeding Year 2015-16 is $0; (4) 2009-10 Program—$373,515,000; 2008-09 Program—$426,822,000; 2007-08 Program—$468,589,000; (7) MA—Inpatient and Medical Assistance—Outpatient; (8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 11-1025. Filed for public inspection June 17, 2011, 9:00 a.m.]

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