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Me dic aid DSH: Whats in the Pr opose d Rule and What it Me ans for Your Hospital May 28, 2013 National Association of Public Hospitals and Health Systems National Association of Public Hospitals and Health Systems 1 1 Ove r vie w

  1. Me dic aid DSH: What’s in the Pr opose d Rule and What it Me ans for Your Hospital May 28, 2013 National Association of Public Hospitals and Health Systems National Association of Public Hospitals and Health Systems 1 1

  2. Ove r vie w  Histo ry o f Me dic a id DSH Pro g ra m  ACA Me dic a id DSH Cuts  CMS’ Pro po sa l  Ne xt Ste ps fo r NAPH Me mb e rs National Association of Public Hospitals and Health Systems 2

  3. Histor y of the Pr ogr am National Association of Public Hospitals and Health Systems 3

  4. Or igins of DSH Co ng re ss, 1981: Ho spita ls se rving a dispro po rtio na te numb e r o f lo w inc o me pa tie nts— “ are o fte n multi-fac e te d he alth c are institutio ns, whic h pro vide many pub lic he alth and so c ial se rvic e s to all re side nts o f the ir are a. … T he Co mmitte e inte nds State s to re c o g nize that fac ilitie s pro viding te ac hing se rvic e s o r o the r spe c ialize d te rtiary c are se rvic e s may have o pe rating c o sts whic h e xc e e d tho se o f a c o mmunity ho spital.” National Association of Public Hospitals and Health Systems 4

  5. Or igins of DSH So c ia l Se c urity Ac t, Se c tio n 1902(a )(13): Me dic a id ho spita l ra te s must: “take into ac c o unt … the situatio n o f ho spitals whic h se rve a dispro po rtio nate numb e r o f lo w inc o me patie nts.” National Association of Public Hospitals and Health Systems 5

  6. Me dic aid DSH Pr ogr am  Pa yme nts a re sub je c t to two limits:  F e de ra l suppo rt to sta te s no t to e xc e e d sta te -spe c ific a llo tme nts  Sta te pa yme nt to ho spita ls no t to e xc e e d ho spita l-spe c ific DSH c a ps DSH a udit a nd re po rting • re q uire me nt National Association of Public Hospitals and Health Systems 6

  7. Me dic aid DSH E ligible Hospitals  Ho spita ls tha t me e t fe de ra l e lig ib ility re q uire me nts MI UR a t le a st o ne sta nda rd de via tio n • a b o ve me a n L I UR g re a te r tha n 25 pe rc e nt •  Ho spita ls tha t sta te s de sig na te a s DSH ho spita ls in sta te pla ns E .g ., sta te te a c hing ho spita ls, • ho spita ls pro viding tra uma o r pe rina ta l se rvic e s National Association of Public Hospitals and Health Systems 7

  8. Me dic aid DSH in the ACA National Association of Public Hospitals and Health Systems 8

  9. Me dic aid DSH Re duc tions in the ACA Re duc tio n Ye a r $500 million 2014 $600 million 2015 $600 million 2016 $1.8 billion 2017 $5 billion 2018 $5.6 billion 2019 $4 billion 2020 National Association of Public Hospitals and Health Systems 9

  10. What’s in the ACA r e gar ding Me dic aid DSH? Se c re ta ry is re q uire d to impo se the la rg e st  re duc tio ns in Me dic a id DSH a llo tme nts o n sta te s (1) with the lo we st pe rc e nta g e o f uninsure d individuals o r (2) tha t do no t ta rg e t the ir pa yme nts o n ho spita ls with hig h vo lume s o f Me dic aid inpatie nts and ho spita ls tha t ha ve hig h le ve ls o f unc ompe nsate d c are Sma lle r pe rc e nta g e re duc tio ns fo r low DSH state s DSH funds fo lde d into c ove rage e xpansion waive rs must b e “ta ke n into a c c o unt” National Association of Public Hospitals and Health Systems 10

  11. What’s Not in the ACA?  Ho w sta te s sho uld distrib ute Me dic a id DSH to ho spita ls within the ir sta te s  Wha t da ta so urc e will b e use d to de fine the pe rc e nta g e o f uninsure d individua ls  Ho w unc o mpe nsa te d c a re (UC) will b e de fine d National Association of Public Hospitals and Health Systems 11

  12. CMS’ Pr oposal National Association of Public Hospitals and Health Systems 12

  13. Ove r vie w of CMS’ Pr oposal  Applie s to F Ys 2014 a nd 2015 o nly  I nte nds to re vise me tho do lo g y thro ug h se pa ra te rule ma king fo r c uts in F Y 2016 a nd la te r  No de ta ils o n time fra me o r pro c e ss fo r re c o uping a llo tme nt re duc tio n a mo unts National Association of Public Hospitals and Health Systems 13

  14. CMS’ State d Goals for its Pr opose d Me thodology  T o le sse n the impa c t o n sta te s tha t ha ve ta rg e te d DSH pa yme nts to ho spita ls tha t ha ve hig h vo lume s o f Me dic a id inpa tie nts a nd to ho spita ls tha t ha ve hig h le ve ls o f UC  T o inc e ntivize sta te s to ta rg e t c urre nt a nd future DSH pa yme nts to ho spita ls tha t ha ve hig he r vo lume s o f Me dic a id inpa tie nts a nd to ho spita ls tha t ha ve hig he r le ve ls o f UC National Association of Public Hospitals and Health Systems 14

  15. Ove r vie w of CMS’ Pr oposal  Ste p 1: de te rmine sta te a llo tme nts witho ut re g a rd to ACA  Ste p 2: de te rmine a llo tme nt re duc tio n a mo unt fo r e a c h sta te using DSH he a lth re fo rm me tho do lo g y  Sta te -spe c ific re duc e d a llo tme nts = ste p 1 minus ste p 2 National Association of Public Hospitals and Health Systems 15

  16. Pr opose d DSH He alth Re for m Me thodology Non- L ow- DSH L ow- DSH Sta te Sta te Uninsure d Uninsure d Pe rc e nta g e Pe rc e nta g e F a c to r F a c to r Hig h Vo lume o f Hig h Vo lume o f Me dic a id Me dic a id Inpa tie nts F a c to r Inpa tie nts F a c to r Wa ive r Wa ive r Sta te Sta te F a c to r F a c to r Hig h L e ve l o f Hig h L e ve l o f Unc o mpe nsa te d Unc o mpe nsa te d Ca re F a c to r Ca re F a c to r Allotme nt Allotme nt Re duc tion Re duc tion Amount Amount National Association of Public Hospitals and Health Systems 16

  17. T he T hr e e F ac tor s: UPF , HMF , and HUF  T he thre e fa c to rs a re g ive n e q ua l we ig ht I .e ., within e a c h g ro up, o ne -third o f the a g g re g a te a llo tme nt re duc tio n a mo unt will b e a llo c a te d a mo ng sta te s using e a c h o f the thre e fa c to rs  Whe n vie we d a s a who le , the uninsure d ra te a c c o unts fo r o ne -third a nd ta rg e ting a c c o unts fo r two -thirds o f the to ta l we ig ht National Association of Public Hospitals and Health Systems 17

  18. T he T hr e e F ac tor s: UPF , HMF , and HUF  E a c h fa c to r will pro duc e a fa c to r- b a se d a llo tme nt re duc tio n a mo unt fo r a sta te  T he sum o f the thre e fa c to r-b a se d a mo unts e q ua ls a sta te ’ s a llo tme nt re duc tio n a mo unt UPF - HMF - HUF - Sta te ’s b a se d b a se d b a se d a llotme nt re d uc tio n re d uc tio n re d uc tio n r e duc tion a mo unt a mo unt a mo unt a mount National Association of Public Hospitals and Health Systems 18

  19. Ke y T e r ms to Re me mbe r : lo w-DSH sta te fa c to r  L DF : uninsure d pe rc e nta g e fa c to r  UPF : hig h vo lume o f Me dic a id inpa tie nts  HMF fa c to r : hig h le ve l o f unc o mpe nsa te d c a re  HUF fa c to r : wa ive r sta te fa c to r  WSF  MIUR : Me dic a id inpa tie nt utiliza tio n ra te  UC : unc o mpe nsa te d c a re National Association of Public Hospitals and Health Systems 19

  20. DSH He alth Re for m Me thodology in De tail National Association of Public Hospitals and Health Systems 20

  21. Pr opose d DSH He alth Re for m Me thodology Non- L ow- DSH L ow- DSH Sta te Sta te Uninsure d Uninsure d Pe rc e nta g e Pe rc e nta g e F a c to r F a c to r Hig h Vo lume o f Hig h Vo lume o f Me dic a id Me dic a id Inpa tie nts F a c to r Inpa tie nts F a c to r Wa ive r Wa ive r Sta te Sta te F a c to r F a c to r Hig h L e ve l o f Hig h L e ve l o f Unc o mpe nsa te d Unc o mpe nsa te d Ca re F a c to r Ca re F a c to r Allotme nt Allotme nt Re duc tion Re duc tion Amount Amount National Association of Public Hospitals and Health Systems 21

  22. T r e atme nt of L ow- DSH State s  Must impo se sma lle r pe rc e nta g e re duc tio ns o n 17 lo w-DSH sta te s  Pro po se s to a pply the L DF to a c c o mplish this ACA re q uire me nt  E ffe c tive ly shifts a po rtio n o f the lo w-DSH sta te ’ s pro po rtio na l sha re o f ACA’ s to ta l c uts to the no n-lo w-DSH sta te s National Association of Public Hospitals and Health Systems 22

  23. How the L ow- DSH State F ac tor Wor ks  Applic a tio n o f the L DF pro duc e s a n a g g re g a te a llo tme nt re duc tio n a mo unt fo r the lo w-DSH g ro up a nd the no n-lo w- DSH g ro up  F ro m this po int fo rwa rd, the two g ro ups o f sta te s a re ke pt se pa ra te , with sta te s in e a c h g ro up a b so rb ing a po rtio n o f tha t g ro up’ s a g g re g a te a llo tme nt re duc tio n a mo unt National Association of Public Hospitals and Health Systems 23

  24. Applic ation of the T hr e e F ac tor s  Within e a c h g ro up, o ne -third o f the a g g re g a te a llo tme nt re duc tio n a mo unt will b e a llo c a te d a mo ng sta te s using e a c h o f the thre e fa c to rs (UPF , HMF *, a nd HUF *) *WSF o nly c o me s into pla y fo r c e rta in q ua lifying sta te s National Association of Public Hospitals and Health Systems 24

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