3 Insights from AHLA’s Institute on Medicare & Medicaid Payment Issues

• Medicare Disproportionate Share Hospital - While there is considerable uncertainty surrounding DSH payments going forward, there are some things hospitals can do now to make sure they get their proper piece of the pie. CMS has stated they will begin using worksheet S-10 of the Medicare cost report for uncompensated care calculations in the future. While the FY 2017 IPPS final rule ultimately delayed implementing it this year, it has stated that it will be used no later than FY 2021. That means the information you are reporting on your cost reports now could potentially affect your UCP DSH in the future.

So what can providers do to make sure any future audits of the uncompensated care data reported on S-10 go smoothly?  Take a look at your charity care policies—do they match the intentions your facility has regarding financial assistance?  Also, possibly rethink terms in your GL such as “self-pay discount” versus “charity care.” We have already seen S-10 audits go south related to EHR because the Medicare auditor did not view those as one and the same, so if you can, avoid those semantic traps.

• Medicaid DSH - Since ACA was not repealed, the Medicaid DSH allotment reductions are set to go in effect October 1, 2017. There are thoughts that a proposed rule surrounding this could come out this spring. The last regulation on this matter was in 2013 for implementation in 2014 and 2015 before the reductions were delayed.  Speculation is that any proposed rule will look very similar to this 2013 regulation, which focused the largest reductions in states with the lowest rates of uninsured population and lower reductions on already small DSH allotment states.  Statutes also require that DSH payments to hospitals with high Medicaid and uncompensated care volumes not be targeted as well as states that used DSH funds to expand coverage through 1115 waivers.

In MACPAC’s first report to Congress in February 2016 regarding Medicaid DSH, they predicted the effects of the DSH Health Reform Reduction Methodology created in the 2013 regulation and found that it would not eliminate the disparities in current DSH allotments. Furthermore, 11 states could face DSH reductions greater than any ACA-related decrease in charity care and bad debt.

• Legislative Update - Despite the fact that AHCA was not voted on, do not think that healthcare reform is dead this year. Chances are Republicans will take another run at it, perhaps this time tackling from the Senate.  With the debt ceiling being reached on April 28^th, this may provide a bargaining chip for reform to be brought front and center again.  Another date to keep in mind is the August recess. Congress will most likely want to see action taken before that time as well.