THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Rehab Committee Meeting September 17, 2018 Melissa Dehoff Director, Medical Rehabilitation Services Division mdehoff@paproviders.org Michael Lane Director, Medicaid Policy and Finance mlane@Wojdak.com
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE SLIDES FROM – A member-only educational webinar offered by
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE AGENDA Today we will cover: The state Medicaid program • The Quality Care Assessment – • Design, Development, and Implementation • Benefits and challenges of the assessment • Industry impact • Provider class impact • Fiscal year 2019 five year reauthorization • Current Pennsylvania political and state agency dynamics • Current Federal regulatory climate related to provider assessments • Potential opportunities for freestanding medical rehabilitation hospitals • Open discussion and Q&A •
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Pennsylvania’s Medicaid Program – The Department of Human Services
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Provider Assessments
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE What is a provider assessment? A provider assessment – also called a tax - is • Improves Medicaid a state law that authorizes collecting revenue reimbursement from specified categories of providers. In most states, it is used as a mechanism to A mechanism to • generate new state funds and match them generate federal with federal funds so that the state obtains dollars additional federal Medicaid dollars. Sometimes used • to stave off Ideally, much of the cost of the tax is paid Medicaid cuts back to providers through an increase in the Medicaid reimbursement rates for their • CMS has many patient treatment and services, although tests/rules that federal regulations prohibit a dollar-for-dollar must be met for return to hospitals on their assessment approval payment.
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE State Reliance on Provider Assessments • Providers and states have • In FY 2013 only 21 states had become reliant on some form of a provider assessments assessment • 42 states have a hospital • The state of Virginia is the latest assessment to approve an assessment • 49 states have some type • Alaska is the only state without a of assessment provider assessment The federal government is Several Congressional proposals • • always looking to close have targeted the reduction of perceived loopholes using provider assessment dollars
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Pennsylvania’s Reliance on Provider Assessments In Pennsylvania there are four main assessments that generate significant money to the state. • Statewide hospital assessment (today’s discussion) Nursing homes • Managed Care Organization • Regional hospital assessment - Philadelphia •
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Pennsylvania’s Hospital Assessment aka The Quality Care Assessment
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE There are limits on Medicaid spending: Hospital-Specific FFS UPL DSH Allotment UPL Additionally there are limitations in the managed care “rate - range” and new federal regulations governing rate- setting and “pass - through” payments. There is also a maximum tax rate – currently 6% of net patient revenue
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Quality Care Assessment – basic structure • What class of providers are • General Acute Care hospitals and taxed? Rehabilitation hospitals What providers are not CAHs, Psychiatric hospitals, • • taxed? LTCHs, Out of State hospitals, Cancer hospitals • General Acute Care Hospitals, Who receives a benefit? • CAHs, Rehabilitation hospitals, Out of State hospitals Some hospitals are not taxed but receive payments from the QCA
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Quality Care Assessment – Freestanding Rehabilitation Hospitals Rehabs are taxed Likely to help meet CMS • • statistical tests • They are provided very little Rehabs receive payments • benefit as a class • Payments would exceed the tax. • What assurances did they Some hold a position of largely receive? break-even status with help from an outside HAP-run program Freestanding rehabilitation hospitals pay $15.1 million in tax and receive $23.6 million in payments A small $8.5 million net benefit to the entire rehab industry.
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Provider Assessment – Typical Payment Flow State Take Assessment Available for Federal Match Payment to Providers Net Benefit
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Payments made under the Quality Care Assessment APR claims adjustment (2) – FFS • Other supplemental payments (4) • and MCO Stability payment • Managed care payments (2) – • Dependency payment • Inpatient and Outpatient Small and SCH payment • Adjustment to existing • Freestanding Rehabilitation • supplemental payments (5) adjustment Restoration payments IP DSH • • OP Supplemental • Hospital Quality Incentive Payment • Medical Education • MA FFS Observation claims • payments OB/NICU DSH • CAH DSH •
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE The Reauthorized Quality Care Assessment – Fiscal Year 2019 Quality Care $915 million Assessment % of IP and OP NPR State Take $295 million Available for Payment to Net Benefit Federal Match Hospitals $1.673 billion $620 million $758 million
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Pennsylvania Political and State Agency Dynamics
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE PA political and state agency dynamics The introduction of the provider assessment has changed financing: Fee-for-service rate increases – None since 2009 • New general fund dollars for hospitals – None since 2010 • Negotiations with managed care plans – Much tougher • Quality Incentive / Value-based programs – Need to “do something” to receive • a portion of payments Reauthorization – The state takes more and more from the assessment • New payment policy – State share funded by the assessment (observation, • quality, APR-DRGs etc.) The assessment should be viewed as Medicaid improvement, but some view it as a windfall for hospitals
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Provider Assessments - Federal Regulatory Climate
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Federal CMS Action(s) Reduction Medicaid Provider FFS to DSH Assessment Managed Oversight Allotments Reductions Care Rule Limits DSH payments to hospitals Threatens provider assessments Redistributes payments Increases oversight and scrutiny Creates potential new mandates
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Opportunities for Freestanding Medical Rehabilitation Hospitals
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Under the Quality Care Assessment, Rehabilitation Hospitals: Are taxed the same rate as all • Did you know…? hospitals included in the tax. Not all rehabilitation Receive payments from a $25 • hospitals receive more million funding pool, solely for in payments than they freestanding rehabilitation hospitals pay in assessment based on: • 147% of the total inpatient FFS Medicaid revenue as reported Did you know …? part 2 in the hospital's fiscal year 2008 Medicaid cost report. Rehabs receive $25 million out of $1.7 Have not had a rate increase or • billion in assessment funding increase under the payments (1.5%) reauthorization agreement.
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Opportunities for Freestanding Medical Rehabilitation Hospitals Several Potential Options for Exploration Include: Quality Incentive programs Value-based purchasing Increasing the Managed Care rate range Spending up to the DSH allotment Reclassifying current DSH and supplemental payment with a Managed Care component in its calculation. Creating a new assessment Lowering the assessment paid Exempting a class of providers
THE STATEWIDE HOSPITAL ASSESSMENT PAYMENT AND POLICY LANDSCAPE Quality incentive programs DHS has implemented a quality incentive program funded through the hospital assessment. Specific Rehabilitation measures could be explored and developed that measure quality reporting metrics at first, then process measures in future years. Likelihood of Success – High Consideration would need to be given to the types of measures that rehabilitation hospitals could successfully implement in order to receive additional Medicaid funding.
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