cost report worksheet s-10, uncompensated care, and other updates
TRANSCRIPT
COST REPORT WORKSHEET S-10, UNCOMPENSATED CARE, AND OTHER UPDATES
David Butler, CPA, FHFMAJim Wadlington, CPA, FHFMA
OVERVIEW
Topics to be covered
IPPS Overview
DSH Payment Changes
DSH/Uncompensated Care Pool
Worksheet S-10 Review
Appeals
Helpful tips to maximize Medicare DSH
Section 1886(d) of Social Security Act Set forth payment for operating costs of acute care
hospital inpatient stays under Medicare Part A Under Inpatient Prospective Payment System (IPPS),
each case is categorized into a diagnosis-related group (DRG)
Each DRG has a payment weight assigned to it, based on the average resources used to treat Medicare patients in that DRG
Hospitals that treat a high-percentage of low-income patients receive a percentage add-on payment applied to the DRG-adjusted base payment rate, known as the disproportionate share hospital (DSH) adjustment
IPPS/DSH OVERVIEW
Affordable Care Act impacts to Medicare DSH
Section 3133 of ACA amended the Act to revise the method for computing DSH
Effective for discharges occurring on or after October 1, 2013
Per CMS contractor Dobson|DaVanzo, “The goal of Section 3133 is to reduce the overall amount of Medicare DSH payments, creating a separate additional payment consistent with decreases in the uninsured rate and to target these additional payments to hospitals with a high proportion of uncompensated care.”
“Improvements to Medicare DSH Payments” Final report submitted to CMS – Thursday, May 9, 2013
IPPS/DSH OVERVIEW
DSH PAYMENT CHANGES
DSH Payment Methodology Changes
Starting in FY 2014, hospitals initially receive 25% of “empirically justified” DSH
Remaining 75% of DSH into a separate funding pool for DSH hospitals
Distributed based on proportion of uncompensated care
To decline each year as required by ACA
DSH PAYMENT CHANGES
Uncompensated Care Payments (75% pool)
Product of three factors
Factor One – Initial Size of the 75% Uncompensated Care DSH Payment Pool
Fixed amount; set prospectively
Factor Two – Change in the Percentage of Uninsured Using CBO estimates
Factor Three – Hospitals’ Uncompensated Care Payments SSI and Medicaid days as proxy
NEW DSH CALCULATIONEXAMPLE
DSH PAYMENT CHANGES
CMS further decreases UCP pool by $1.2B for FY 2016
Hospitals most affected will be those located in states that do not expand Medicaid
CBO estimate that the rate of uninsured will decrease from 13 to 11 percent
Continued use of Medicaid inpatient days instead of Worksheet S-10 data; concerns regarding completeness of S-10
CMS still intends to use S-10 in future periods (TBD)
DSH PAYMENT CHANGES
UCP Pool for Louisiana Hospitals
LA’s share of UCP pool decreased 17% from FY 2015 to FY 2016
Only slight decrease in low income (factor 3) days
2.19% in FY 2015 vs 2.16% in FY 2016
DSH eligible hospitals are encouraged to report the most Medicaid eligible days allowable under the DSH rules
Based on methodology previously employed by CMS, cost report years beginning in FY 2013 will most likely be used for FY 2017 Final Rule
FFY 2014• Utilized FFY 2011 Hospital Medicaid days• Pool amount of $9.4B
FFY 2015• Utilized FFY 2012 Hospital Medicaid days• Pool amount of $7.6B
FFY 2016• Utilized FFY 2012 Hospital Medicaid days• Pool amount of $6.4B
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html
UNCOMPENSATED CARE PAYMENT
(UCP) POOL
• Section 112(b) of the Balanced Budget Refinement Act (BBRA)
• Requires that short-term acute care (subsection d) and critical access hospitals complete S-10
• Data reported on Worksheet S-10 shows cost incurred by the hospital for providing inpatient and outpatient services for which the hospital is not compensated
• Uses overall cost-to-charge ratio for the hospital applied to hospital charges for government programs and charity
WORKSHEET S-10OVERVIEW
• Overall cost to charge ratio calculated from fully loaded cost and charges from Worksheet C
• “Fully loaded” costs and gross patient charges used• Excludes non-reimburseable cost centers• All-inclusive rate (AIR) providers must manually input
S-10
Lines 2 – 8 for reporting Medicaid charges and payments
• Includes inpatient and outpatient payments received or expected for Title XIX covered services delivered during the cost report period
• Includes payments and charges where Medicaid is the primary payer. Medicaid secondary should not be included.
• Excludes physician or other professional services• Includes charges and payments for Medicaid managed
care programs• Must include Medicaid DSH and supplemental
payments, net of associated provider taxes or assessments
S-10MEDICAID
• Line 2 – Net revenue includes DSH received• Line 3 answer is “Y”• Line 4 answer is also “Y”
S-10MEDICAID
• Line 2 – Net revenue includes DSH received• Line 3 answer is “Y”• Line 4 answer is “N”• No difference in payer margin; only making sure all
payments are accounted for
S-10MEDICAID
LaCHIP• Provides health coverage to uninsured children up to
age 19
• Household income must be below income limits
• Uses higher income limits than traditional Medicaid (217% of FPL)
LaCHIP Affordable Plan• Same as LaCHIP, but for income limits up to 250% of
FPL
S-10SCHIP
• Line 9 – Payments received or expected for services delivered that are covered by stand-alone SCHIP (not eligible for coverage under Title XIX)
• Line 10 – Gross revenue (charges) for stand-alone SCHIP• As with Medicaid, this should exclude physician and other
professional services
S-10SCHIP
Lines 13 and 14
Same calculation as SCHIP, only for state or local government indigent care programs
• Not commonly entered• Example: Texas has County Indigent Health Care
Program
S-10OTHER STATE OR LOCAL
GOVERNMENT
• Line 17 – Private grants, donations, or endowment income• Non-government grants, gifts and investment income
received during the period restricted to funding uncompensated care
• Include interest or other income earned from any endowment fund for which the income is restricted
• Line 18 – Govt grants, appropriations or IGTs• Includes funds for general operating support as well as
special purposes related to operation of the hospital• Includes funds from Federal Section 1011 program
• Neither line reduces “shortfall”
S-10GRANTS, DONATIONS AND OTHER
FUNDING
Lines 20 – 23Calculates the cost of charity care
• Line 20 – Initial Obligation of Patients approved for Charity Care• Uninsured – Patient’s total charges• Insured – Deductible and coinsurance amounts
• Line 21 – Calculated cost using CCR from line 1
• Line 22 – Partial payment from patients approved for Charity Care
• Does NOT include payments from payers• Do not include payments for professional services
• Line 23 – Cost of Charity Care
S-10UNCOMPENSATED CARE
Lines 24 and 25• Line 24 – Charges for patient days beyond a LOS limit
imposed by Medicaid or other indigent care program• Example: Medicaid “exhausted” days
• Line 25 – If Line 24 is “Y”, enter the applicable charges
• Does not impact calculated unreimbursed or uncompensated care cost; informational only
S-10UNCOMPENSATED CARE
Lines 26 – 31• Line 26 – Total facility bad debt expense
• Exclude physician and other professional services• Patient liability amounts only• Must include Medicare bad debts claimed by hospital and all sub-
units
• Line 27 – Adjusted (reimburseable) bad debts• Calculated number; flows from hospital and all reimburseable
sub-units
• Lines 28 – 31 • Calculations to arrive at net unreimbursed and uncompensated
care cost (see example)
S-10UNCOMPENSATED CARE
S-10UNCOMPENSATED CARE
Protect your hospital’s appeal rights!Issues to appeal (for DSH and LIP)
• Medicaid Eligible Days• This ensures timely payment for DSH on the cost report, as well
as preserves amounts to be received through uncompensated care pool
• Ensuring Correct Counts of SSI Days (Data Match)• Data Use Agreements with CMS
• Uncompensated Care• S-10 instructions ambiguous
• Uncompensated Care Adjustment• Could be errors associated with the calculation of CMS’ published
pool amount (E, Pt A Line 35)
APPEALS
Other possible appeal items:• Dual Eligible Days for DSH
• Less likely to succeed
• Medicare Advantage Dual Eligible Days for DSH• For cost reports prior to FFY 2014• Allina v. Sebelius
• Two Midnight Rule• Non-DSH related, but should also be calculated and used
APPEALS
• Important to take time to consider the future impacts of cost report information
• Balancing act: Estimate unpaid and additional eligible days• Pay careful attention to utilization trends to avoid overpayment
• Retroactive eligibility (for TPL claims) often is not reflected until 3-6 months after year end
• Monitor published SSI percentages for potential under/overpayments
• Monitor Proposed and Final Rules for accuracy of S-2 data
HELPFUL HINTS
David Butler, CPA, FHFMAPartner, HORNE [email protected]
ABOUT THE PRESENTERS
Jim Wadlington, CPA, FHFMAManager, HORNE [email protected] 601.326.1000
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