Hospitals leave open the possibility of challenging HCFA’s policy
Hospitals leave open the possibility of challenging HCFA’s policy
Effective Jan. 1, state-funded programs or even certain Medicaid programs will not factor into the equation when Medicare calculates how much extra to give hospitals that treat a disproportionate share of indigent patients, stated a Dec. 29, 1999, memo to state Medicaid directors from Timothy Westmoreland, director for the Health Care Financing Administration (HCFA).
Hospitals will, though, be allowed to keep payments based on provision of such services through Dec. 31, 1999.
"This is consistent with HCFA’s determination that hospitals and intermediaries relied, for the most part, on Medicaid days data obtained from state Medicaid agencies to compute Medicare DSH payments and that some of those agencies commingled the types of otherwise ineligible days listed above with Medicaid Title XIX days in the data transmitted to hospitals and/or intermediaries," said a December program memorandum.
The impact of HCFA’s decision not to recoup payments already paid out is enormous, meaning as much as $160 million to hospitals in New York state alone.
In New Jersey, the state hospital association estimates that the decision will secure between $250 million and $370 million for about 60 hospitals.
"That certainly is positive news for New Jersey hospitals," says Sean Hopkins, New Jersey Hospital Association vice president of health economics. At the same time, the association isn’t sure it is willing to let the issue rest.
"We feel these days . . . should continue to be allowed moving forward, and it appears HCFA may have a different opinion on that. We would be looking to investigate why they feel the [days] should be included retroactively, but not included prospectively," Mr. Hopkins says.
Medicare disproportionate share hospital (DSH) payments are based on the care provided to low-income elderly and Medicaid-eligible.
The justification for HCFA’s narrow definition of Medicaid is generally that the disputed days are not part of care under an approved Medicaid state plan.
December’s policy guidance was published to eliminate variations in interpretation of allowable DSH payments among Medicare fiscal intermediaries. (See State Health Watch, January 2000, p. 9.)
"The term Medicaid days’ does not refer to all days that have some relation to the Medicaid program, through a matching payment or otherwise.
"If a patient is not eligible for medical assistance benefits under an approved Title XIX State plan, the patient day cannot become a Medicaid day simply by virtue of some other association with the Medicaid program," stated the memo.
The disputed days in New Jersey, for example, are provided under a Medicaid disproportionate share program to persons who exceed the conventional Medicaid asset limits. The charity care program uses both state and federal funds.
If a fiscal intermediary re-opened a Medicare cost report before HCFA’s December memorandum in order to take back payments using the expanded definition of Medicaid, the hospital will receive that money back with interest.
Fiscal intermediaries can respond to a hospital’s request to re-open a cost report on this issue, but only if the request was made before Oct. 15, 1999.
HCFA recognizes that, in some state medical assistance programs, a hospital may have difficulty determining the specific source of a payment and thus whether it can be used to justify disproportionate share payments.
"If a hospital is unable to distinguish between Medicaid beneficiaries and other medical assistance beneficiaries, then it must contact the state for assistance in doing so," said the memorandum.
The HCFA memorandum is found at www.hcfa.gov/medicaid/smd 12299.htm.
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