Southwest Consulting Associates Blog

Worksheet S-10 & Transmittal 1681

Posted by Kyle Pennington on Sep 26, 2016 10:18:02 AM

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deadline3.jpgIn anticipation that CMS might finalize the DSH/UC payment methodology proposed in the 2017 IPPS proposed rule, CMS released Change Request 9648, Transmittal 1681 (please see page 3, paragraph 2) in July, which included, among other items, guidance for MACs to follow for accepting cost reports containing revised Worksheet S-10 information. Specifically, in order for MACs to accept amended cost reports due to revisions to Worksheet S-10 for FY 2014, CMS put providers on notice by stating that “hospitals must submit their amended cost report containing the revised Worksheet S-10…no later than September 30, 2016.” CMS added, “Submissions received on or after October 1, 2016 will not be accepted.”

Worksheet S-10 submissions or revisions have become increasingly important because one of the key proposals detailed by CMS in the FFY 2017 IPPS Proposed Rule was their plan to transition, over a three-year period, the DSH/UC distribution model from the use of Medicaid and SSI days to Line 30 of Worksheet S-10. Beginning in FFY 2018, CMS proposed to use three data sets to calculate a provider’s uncompensated care Factor 3 as follows:

  1. FY 2012 Medicaid days plus FY 2014 SSI days
  2. FY 2013 Medicaid days plus FY 2015 SSI days
  3. FY 2014 S-10, line 30

Under this proposal, CMS would calculate a Factor 3 percentage based on each of the three data sets above. CMS would then average these three numbers to determine each provider’s Factor 3. Therefore, one-third of the UC pool for FFY 2018 would be distributed based on FFY 2014 S-10 data.  For FY 2019, two-thirds of the UC pool would be distributed based on S-10 data and in FY 2020, the UC pool would be distributed solely on Worksheet S-10 data.

As you are aware, this uncompensated care payment model detailed above was not finalized in the FFY 2017 IPPS Final Rule.  CMS commented, “we are not finalizing our proposal to begin to incorporate Worksheet S-10 data into the computation of Factor 3 for FY 2018.  Instead, we believe it is important that we have the opportunity to consider further the concerns raised...regarding the use of Worksheet S-10 data to determine Factor 3.  We expect to re-propose a policy of incorporating Worksheet S-10 data into the computation of Factor 3 no later than FY 2021.

Even though the UC payment methodology described above was not adopted, CMS did make mention of the Change Request 9648, Transmittal 1681 in the final rule:  “CR 9648 is one of the multiple steps we intend to take over the next several years to ensure more accurate and uniform reporting of uncompensated care costs on Worksheet S-10.”

So, CMS isn’t going to use FY 2014 S-10 for computation of Factor 3 for the uncompensated care payment but hospitals should still submit or revise their FY 2014 Worksheet S-10 by September 30, 2016?  One could say that CMS has caused a bit of confusion with regards to the timing of the usage of S-10 data.  No one knows exactly how FY 2014 (or FY 2015 & 2016) S-10 data will be applied to the payment proxy for FFY 2018 and beyond.  CMS continues to send mixed messages on their published intentions and expected timeframes, and providers must be prepared for continued changes to the Factor 3 formula.

We continue to stress that hospitals must protect themselves, and especially in light of these recent occurrences, we want to remind providers that Medicaid days and S-10 data should be sound to best position their organization for any future direction CMS pursues.  Just as important, if a hospital believes its previously reported S-10 data is incomplete, incorrect, or not otherwise adequately supported (i.e. patient level detail) then a hospital should submit revised data to its MAC.  In particular, please be mindful of the 9/30/16 deadline for FY 2014 cost report amendments.  And to this point, although Transmittal 1681 mentions that submissions received on or after October 1st will not be accepted, we want to point-out that the same Transmittal also states “For requests to amend or submit FY 2014 worksheet S-10 received after September 30, 2016….MACs shall follow normal timelines and procedures.”  Consequently, even if unable to complete or amend in-time for the 09/30 deadline, hospitals should still work to submit to the MACs as soon as possible, as the MACs may be willing and able to accept and upload into HCRIS timely for future Factor 3 determinations.

SCA’s Uncompensated Care Compliance Program can assist you in compiling the auditable documentation and revising the applicable Worksheet S-10 data for amending the cost report and submitting timely to the MAC. If you need assistance with your S-10 data, please reach out to us and we will be happy to discuss our S-10 service and how we can assist your organization.


Southwest Consulting Associates Worksheet S-10 blog

Topics: DSH Reimbursement, Medicare DSH Reimbursement, uncompensated care, S-10

About This Blog

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

  • DSH Reimbursement
  • 340B Pharmacy Drug Discount Program
  • Compliance Issues
  • Litigation Surrounding Provider Reimbursement

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