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FY 2020 IPPS Proposed Rule Review Part 2: Medicare DSH

Posted by Michael Newell on Jul 30, 2019 5:12:51 PM

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board-1647328_1920_Image by Gerd Altmann from Pixabay In part 2 of our FY 2020 IPPS Proposed Rule Review series, we will take a look at the one DSH item included in the proposed rule that may be of some interest to you. It appears this item stems from the fact that there are a large number of PRRB appeals involving Medicaid eligible days and the agency is struggling for ways to deal with that issue. It appears that the agency recognizes that there is a legitimate issue to be addressed in terms of including all identified Medicaid eligible days in a hospital’s cost report, but that there might be a better way to proceed and alleviate the backlog of appeals on this issue at the Provider Reimbursement Review Board.


This isn’t the first or only time CMS has come up with options for dealing with eligible days issues.


First, we have the methodology laid out in the final OPPS 2016 rule related to amended cost reports. That being, MACs have been instructed to accept at least one amended cost report filed within 12-months of the original cost report filing date for the purpose of including additional Medicaid eligible days. This rule was effective for cost reporting periods beginning on or after January 1, 2016. So, we are on our second round of full year cost reports subject to that new rule. And as you recall, there are three criteria you have to meet in order to get your days accepted:

  1. Identify the number of days you seek,

  2. Describe your process for accumulating days in the as-filed cost report, and

  3. Explain why these new days you seek could not have been identified in the as-filed cost report.

Of course, if in the end you don’t believe that the correct number of days are included in the NPR, cost claiming and protest implications aside, you could appeal that determination. On the one hand you could prosecute the appeal, which takes time and money to do. Or, you could possibly take advantage of PRRB rules 46 & 47. In short, these rules permit the withdrawal and subsequent reopening of an appeal in a couple of circumstances.


First, is where the provider files an appeal, and the Medicare contractor subsequently agrees to reopen the final determination on the issue(s) being appealed, the provider withdraws the appeal, but then the Medicare contractor fails to reopen the cost report as agreed. In this instance, the PRRB will reinstate the appeal after a showing by the provider of its request to reopen the final determination and the Medicare contractor’s agreement to do so.


Second, an appeal can be reinstated where the provider simultaneously files a request to the Medicare contractor to reopen the final determination, along with an appeal and notice of withdrawal of appeal. In this instance, if the Medicare contractor refuses to reopen the appeal, the provider can reinstate the appeal upon a showing that it made the request to reopen and the Medicare contractor denied that request.  


Noted in the FY 2020 IPPS proposed rule, CMS solicited comments on a couple of other options.


One, has to do with CMS instructing the MACs, or requiring the MACs, to perform a reopening sometime within the three-year reopening window – maybe near the end of the three-years to allow for the maximum number of remaining eligible days – and this would be done in lieu of an appeal.


Option two would be a process similar to the SSI recalculation process now in place – that being that a “revisions” request can be submitted after the NPR issuance for the purpose of updating eligible days. Now as a practical matter, the recalculation requests are filed within the three year reopening period, however, by rule it is technically not a reopening in that context, in our view.


Either way, hospitals will have to weigh what rights they have if the MAC ultimately does not follow through with the request or it the hospital is still unsatisfied with the final outcome of the request. For example, what if a hospital ended up with scenario one; ask for 500 days, the MAC reopens but only gives you 100 days – then what? Can you appeal from that? Did you just waste three-years for something that you might have gotten done sooner if you had an appeal at the outset and were working on an administrative resolution? Hospitals should consult with your appeals counsel for their opinion on this issue.


Regardless of the approach CMS decides to take, we always recommend that hospitals have a consistent process for claiming “costs” for Medicare DSH that fully addresses the filing of ALL allowable costs in the initial cost report, protest items and NOW, filing a timely cost report amendment(s). The absence of a cohesive, consistent process is likely to result in hurdles and obstacles on the way to the successful settlement of amended cost report filings, or unfortunately, the denial of the amendment. If providers (and/or their vendors) do not adhere to the requirements CMS has already set with regards to the 2016 OPPS rule and then any new processes that are revealed in the Final Rule, an amended cost report AND any additional DSH reimbursement, could fall to the wayside.  


We expect the FY 2020 IPPS proposed rule to be published in early August (as early as this week), where we anticipate CMS will provide a summary of the comments on this issue and what they finalize with regards alleviating the backlog of appeals on this issue at the PRRB. We will post an update to blog as soon as the rule is released and also plan to host our usual final rule webinar summarizing the details. 


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P.S. Part one of this series can be read by following this link: FY 2020 IPPS Proposed Rule Review Part 1: Worksheet S-10 Uncompensated Care Payment.




Topics: Medicare DSH Reimbursement, appeals, ipps rule, PRRB rules

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The climate of provider reimbursement is ever-changing and this blog is intended to keep you up-to-date on the latest information regarding:

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