Bob McLeod
•March 12, 2015
Healthcare Association of New York State
www.hanys.org
Agenda
• NYS Hospital Financial Assistance Law compared
to IRS Final Rule 501(r),
• Indigent Care Pool, and
• 2012 Medicaid DSH audit 0bjectives and Timeline
Healthcare Association of New York State
www.hanys.org
Healthcare Association of New York State
www.hanys.org
Why such a focus on charity care
(financial assistance) and collections?
• Some policy makers believe that charity care is the most
important community benefit.
• Concerns regarding some patient experiences with the
collections process:
– Discouraging uninsured patients from seeking or obtaining
care at tax-exempt hospitals.
– Leaving patients with excessive medical debt.
– Hospitals willing to offer greater discounts to commercial
insurers than to low-income patients.
• Lobbying by consumer advocates.
Source: Verite Healthcare Consulting, LLC 2015
Healthcare Association of New York State
www.hanys.org
Brief History and Context
IRS 501 (r)
Concerns
about taxexempt
hospitals
2007:
Redesigned
form 990 and
Schedule H
2010: ACA
“501(r)”
requirements
Dec 2014:
501(r) Final
Rule
Source: Verite Healthcare Consulting, LLC 2015
Healthcare Association of New York State
www.hanys.org
The Affordable Care Act – March 2010
• Added 501(r) to the Internal Revenue Code:
– Standards for conducting and publishing a Community
Health Needs Assessment (CHNA);
– Establishment and disclosure of financial assistance
policies;
– Limitations on amounts charged to patients who are
eligible for financial assistance; and
– Rules governing billing and collections practices.
• Compliance with the Final Rule must occur by the
beginning of Tax Years on/after December 29, 2015
(Final Rule – Dec 2014).
Healthcare Association of New York State
www.hanys.org
Brief History and Context
NYS Hospital Financial Assistant Law
(HFAL)
Adverse Media
Attention on
Hospital Billing
of the
Uninsured
2004:
Financial
Aid/Charity
Care Guidelines
Healthcare Association of New York State
2007:
State Budget
Mandated HFAL
Public Health
Law 2807-k(9)
2007-present:
DALs and
Education
Clarifying HFAL
2014:
State Audit of
Hospital
Compliance
with HFAL
www.hanys.org
Compliance
HFAL
• Originally compliance with
the HFAL was required as a
condition of participation in
Indigent Care Pool
distributions on/after January
1, 2009.
– Later subject to a fine up to
$10,000 per violation.
• 2014: 1% of Medicaid DSH
payments withheld until
substantial compliance is
determined.
IRS 501(r)
• No sanctions or disclosures
apply to errors that are
minor and either
inadvertent or due to
reasonable cause if
corrected promptly.
• Willful non-compliance
may result in revoking
501(c)(3) status for hospital
facility.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Eligibility
HFAL
• At a minimum individuals
with household incomes
below 300% FPL without
insurance or who have
exhausted their health
insurance benefits.
• Insured individuals: copays and deductibles at
the discretion of hospital.
• Must be reported in FAP.
IRS 501(r)
• No specified eligibility
criteria. Although once
established by hospital it
must be reported in its
financial assistance policy
(FAP).
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Determination of Eligibility/Income
HFAL
• May not be overly
burdensome. Only
documentation that
indicates current income is
permitted. The hospital
may not require tax returns
or monthly bills.
IRS 501(r)
• Requirements must be
described in FAP.
• Individuals may not be
denied financial assistance
if they do not provide
documentation that has
not be specified in the FAP.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Presumptive Eligibility
HFAL
IRS 501(r)
• Permitted.
• The hospital may use credit
scoring software for purposes of
establishing income eligibility
and approving financial
assistance.
• Permitted.
• Assistance may be grated at less
than the most generous level
(different from proposed rule).
– May not require patients to
provide social security numbers,
and the scoring must not
negatively impact the patient’s
FICO scores.
– Credit scoring software cannot be
used to deny applications for
financial assistance, and
– Language referring to credit scoring
should not appear on applications.
– May apply for more generous
assistance.
• Allowable sources of information
besides those provided by
individual must be disclosed in
FAP.
• Under what circumstances prior
FAP-eligibility may be used must
be disclosed in FAP.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Financial Assistance Conditional on
Medicaid Application
HFAL
• Prohibits a blank requirement.
• On a case-by-case basis hospitals
may require individuals
applicants that it believes would
be eligible for Medicaid or other
public health insurance to
cooperate in applying, or that
coverage as a condition of
receiving financial assistance.
IRS 501(r)
• Permitted.
• Allows the FAP-eligibility
determination to be held
pending the determination of
Medicaid.
– Financial assistance applications
must be processed concurrently
with any application for public
assistance.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Covered Services
HFAL
IRS 501(r)
• Emergency Services – All NYS
residents at a minimum.
• Non-emergent, medically
necessary services to residents in
a hospital’s primary service area
at a minimum.
• All emergency services and other
medically necessary care (as
applicable under the laws of the
state).
• Must establish an emergency
medical care policy that :
– While DOH establishes the
hospitals primary service area, the
hospital may provide financial
assistance to residents beyond this
area.
– The hospital must disclose the
geographic service area within
which is FAP will apply.
– Prohibits it from actions that
discourage individuals from seeking
emergency care such as demanding
payment before receiving treatment
or permitting debt collection
activities.
• No reference to service area
requirements.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Providers Covered by the
Hospital’s FAP
HFAL
• Disclosure is not required.
IRS 501(r)
• The hospital must list
providers, other than the
hospital itself, delivering
emergency or other
medically necessary care in
the hospital that are
covered and not covered by
the hospital’s FAP.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Publicizing the FAP
HFAL
• The hospital must:
– Ensure that its FAP summary and financial aid application
are available on the hospital’s website.
– Make policy summary available in writing to the public or
upon request and in areas where care in provided.
– Patients must be notified of the availability and how to
obtain financial assistance:
• During the intake process;
• Though conspicuous posting of the information in appropriate
areas of the hospital; and
• On billing statements.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Publicizing the FAP - Continued
IRS 501(r)
• Hospital must:
– Make available on its website the FAP, FAP application form and the plain
language summary (PLS) of the FAP;
– Make available paper copies available upon request in public locations and by
mail (ER and admitting at a minimum);
– Notify and inform members of the community “in a manner reasonably
calculated to reach those members who are most likely to require financial
assistance from the hospital facility.”; and
– Notify and inform individuals who receive care from the hospital facility about
the FAP:
• Paper copy PLS at intake/discharge;
• Billing statement; and
• Conspicuous posting (ER and admitting at a minimum).
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Language Requirement
HFAL
• Applications must be
available in the primary
languages of individuals
that use the hospital
services.
– 5% of languages used during
patient visits annually; or
– Languages spoken by at least
1% of the total population of
the hospital’s service area.
IRS 501(r)
• The FAP, FAP application, and PLS
must be translated into the
primary language spoken by
limited English proficiency (LEP)
language groups that constitute
the lesser of:
– 1,000 people or
– 5% of the community
serviced.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Cap on Fees
HFAL
• Specifies the maximum payment amounts (MPA) for the
mandated eligible population(at or below 300% FPL) based on
payments from either Medicare, Medicaid, or the highest volume
commercial payer:
 Individuals at or below 100%FPL may be charged no more than a nominal
amount based on care provided;
 Individuals between 101%-150% FPL sliding scale from a nominal amount
up to 20% of the MPA;
 Individuals between 151%-250% sliding scale from 20% up to 100% of
MPAl; and
 Individuals between 251%-300% FPL no more than at MPA.
• The hospital may use different discounting methods for inpatient and
outpatient services.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Cap on Fees - Continued
IRS 501(r)
• Specifies the maximum amount collected from FAP-eligible
individuals for emergency or medically necessary care is limited to
the amount generally billed (AGB) insured patients.
• Two methods for calculating AGB may be used:
– “Look-back” method, or
– “prospective” method
• The FAP must state the method of determining AGB.
• Hospital may change the method as long as it incorporates the
change into the FAP before implementing.
• Organizations having multiple hospitals may have different
AGBs/methods of calculated AGB for each hospital.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Cap on Fees - Continued
IRS 501(r)
• “Look-back” method
– Calculate at least annually.
– Formula: 12-months allowed claims/associated gross charges (all
claims, not only medically necessary);
– Hospital may use:
•
•
•
•
Medicare fee-for-service; or
Medicare fee-for-services and all private health insures; or
Medicaid; or
Medicaid and all private payers
– May be one or multiple (service-specific) percentages.
– Must be applied by the 120th day after the 12-month period.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Cap on Fees - Continued
IRS 501(r)
• “Prospective” Medicare or Medicaid method
– Use the Medicare fee-for-service or Medicaid billing and coding
process to calculate AGB for amounts Medicare/Medicaid would pay
(includes any coinsurance amounts that are the patient’s
responsibility).
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Cap on Fees - Continued
IRS 501(r)
• The hospital must charge the FAP-eligible individual less
than gross charges for any medical care (including care not
covered by under the hospital’s FAP).
• The AGB limitation for insured individuals that are FAPeligible is applied only to the amount that the individual is
personally liable for after all payments from the insurer has
been applied.
– Therefore the combined amount paid to the hospital by the FAPeligible individual and the health insurance may exceed AGB.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Cap on Fees - Continued
IRS 501(r)
• Hospital not in violation of IRS 501(r) when charges exceed
AGB if:
– The charge was not a part of an upfront payment for medically
necessary care;
– At the time of the charge the individual had not submitted a complete
FAP application; and
– If the individual is later found to be FAP-eligible the hospital refunds
any amount collected over the FAP discounted amount.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Cap on Fees - Continued
IRS 501(r)
“If a hospital facility requires an individual to make an upfront
payment for medically necessary care that exceeds the AGB for
the care and the individual turns out to be FAP-eligible, the
hospital facility will have failed to meet the requirements of
501(r)(5).”
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Application Period
HFAL
• Total of 110 days
• Individuals have at least 90
days from date of discharge
to apply.
• In addition they are
provided at least 20 days to
submit a completed
application including all
required documents.
IRS 501(r)
• Total of 240 days.
• The hospital must wait at
least 120 days before
initiating certain collection
actions
• The hospital is required to
accept applications for an
additional 120 days.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Eligibility Notification
HFAL
•
•
Hospital must respond in writing
with a determination within 30 days
from receiving an application.
If denied financial assistance, the
individual must be provided
information on how to appeal the
denial.
– Hospital’s FAP must outline the
appeals process
IRS 501(r)
•
•
Hospital must notify the individual in
writing of eligibility determination.
If FAP-eligible:
– Revised billing statement showing
discount and how it was determined;
– Provide any refund if applicable; and
– Take reasonable efforts to reverse
any “extraordinary collection actions”
(ECAs) implemented.
•
Incomplete application
– provide a written notice that
describes the additional information
needed; and
– give the individual a reasonable
opportunity to complete.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Billing and Collections
HFAL
• The FAP must contain information about the hospital’s
collection practices:
 Requirement that contracted collections agencies comply with the
hospital’s FAP and provide application information to individuals;
 Prohibit the forced sale or foreclosure of individual’s primary
residence;
 Prohibit sending an account to collection for those individuals who
have submitted applications with eligibility determinations still
pending; and
 Requirement that a written notification be sent to individuals at least
30 days prior to referring the account to collections.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Billing and Collections - continued
HFAL
 Requirement that contracted collections agencies obtain the hospital’s
written consent before commencing a legal action; and
 Prohibit collections against any individual who was Medicaid eligible at
the time care was provided.
Hospital staff that interacts with patients, especially those in
billing and collections, must receive training about the
hospital’s financial assistance policies and procedures.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Billing and Collections - continued
IRS 501(r)
• The FAP must contain the hospital’s collection policies unless
the hospital has a separate collections policy that meets the
law’s requirements.
• The hospital cannot engage in extraordinary collections
actions (ECA) before making a reasonable effort to
determine the individual’s FAP eligibility.
• ECAs include:
 Selling an individual’s debt (with some exceptions); and
 Reporting adverse information to consumer credit reporting agencies
or credit card bureaus.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Billing and Collections - continued
IRS 501(r)
• ECAs include (continued):
 Deferring, denying or requiring payment before providing medically
necessary care to individuals with outstanding bills for previous care;
and
 Actions that require a legal or judicial process including:
 Placing a lien or foreclosing on an individual’s real property;
 Attaching or seizing a bank account or other personal property;
 Commencing a civil action;
 Causing an individual’s arrest or for the individual to be subject to a writ
of body attachment; or
 Garnishing of wages
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Billing and Collections - continued
IRS 501(r)
• At least 30 days before initiating an ECA, the hospital must:
– provide the individual with written notice that states the availability
of financial assistance and identifies the ECA(s) that the hospital
intends to take;
– Provide the individual with the plain language summary (PLS) of the
FAP; and
– Make reasonable efforts to orally notify the individual about the
hospital’s FAP.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
Data Reporting
HFAL
• Schedule 50 of the
Institutional Cost Report
(ICR).
• Submission of FAP to DOH.
• KPMG questionnaire as
part of the ICR audit.
IRS 501(r)
• Schedule H of the IRS 990.
This document is not intended and should not be considered legal advice. HANYS strongly suggests that hospitals work with
their legal advisers to ensure that their financial assistance policy and related documents meet all the requires of these laws.
Healthcare Association of New York State
www.hanys.org
NYS Financial Assistance Compliance Pool - HFAL
• The 2012-13 State Budget as part of the Indigent Care
Pool distribution language established the financial
assistance compliance pool.
•
Authorizes 1% of Total DSH distributions to be set aside
for 2014 and 2015.
 Total New York State DSH Distributions (excluding OMH hospitals) is $2.64B. 1% of this amount
results in a FACP of $26.4M.
• Pool funds are released back to hospitals upon their
demonstrating/achieving substantial compliance with
HFAL.
Healthcare Association of New York State
33
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HFAL Substantial Compliance
• Method for determining substantial compliance is based on
achieving a “passing score” on HFAL questionnaire and
KPMG review.
 Achieving a minimum compliance level on questions pertinent to
HFAL. For 2014, compliance in 38 of the 46 areas tested on the HFAL
questionnaire completed as part of 2012 ICR Audit.
 Minimum compliance level will increase in 2015, as hospitals will
have had time to become closer to total compliance. The standard
will be 44 of 49 areas of compliance.
Source: NYSDOH
Healthcare Association of New York State
34
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HFAL Questionnaire Results
• In 2014, Of the 46 questions presently considered
pertinent to HFAL compliance:
 9 hospitals were deficient in 9 or more areas,
 An additional 30 hospitals were deficient in 6-8 areas,
 An additional 21 hospitals were deficient in 5 areas.
• Hospitals not achieving substantial compliance will have to
submit a corrective action plan and demonstrate substantial
compliance by 12/31/15 or their FACP funds will be
forfeited and reallocated.
Source: NYSDOH
Healthcare Association of New York State
35
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2014 Questionnaire Reponses
Top 5 Areas of Non-Compliance with HFAL
Question #
Question Description
Number of
Hospital
Non-Compliant
A.20
Does the denial form include DOH contact information?
96
A.22
Does the hospital only apply an asset test to patients who
are below 150% FPL and only if they have received explicit
permission from the NYSDOH to do so?
90
A.4-1
Does the hospital require as a condition of receiving
financial assistance tax returns as part of its application
process?
54
A.4-2
Does the hospital require as a condition of receiving
financial assistance Medicaid denials as part of its
application process?
54
A.8
Has the hospital developed a method to measure
compliance with HFAL policies and procedures?
51
Healthcare Association of New York State
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Healthcare Association of New York State
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Indigent Care Pool Methodology
 Current Methodology
 Established beginning with 2013 Indigent Care Pool through a
provision in the 2012-13 state budget;
 Moved from Bad Debt and Charity care methodology;
 Collapsed the 9 sub-pools for voluntary hospitals into one pool and
maintained the public hospital pool;
 Established a transition methodology;
 Required substantial compliance with hospital financial assistance law
to receive full distribution; and
 Increased the Voluntary Supplemental Inpatient UPL payments up to
$339M.
 Current methodology sunsets on December 31, 2015.
 New distribution methodology is being negotiated as part of the 2015-16
state budget.
Healthcare Association of New York State
38
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Indigent Care Pool Methodology
 Uncompensated care
 Uninsured units x Medicaid rate for each Inpatient and Outpatient service;
 Adjusted by statewide cost adjustment factor (Inpatient and Outpatient
computed separately); and
 Reduced by collections received from uninsured patients.
 Nominal need
 Uncompensated care adjusted by a factor which incorporates the
Medicaid inpatient percentage.
 Allocation
 Major public hospitals remain at $139.4M;
 Voluntary hospitals increased by $25M to $994.9M;
 Proportional allocation in each group is based on the individual hospital’s
nominal need to the total nominal need within the group.
Source: NYSDOH
Healthcare Association of New York State
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Transition Payment
 Provide payments to limit losses by capping the percentage hospitals can
gain as compared to current distributions (based on a 3-year average):
 Year 1 – 2.5% limitation on losses; approx. 10% cap on gains for voluntaries and 2% for
major publics;
 Year 2 – 5.0% limitation on losses; approx. 15% cap on gains for voluntaries and 4% for
major publics; and
 Year 3 – 7.5% limitation on losses; approx. 20% cap on gains for voluntaries and 6% for
major publics.
 Provide additional $25M (included in $994.9M) for Voluntary Hospital
allocations, as part of the Voluntary Hospital UPL payment.
Source: NYSDOH
Healthcare Association of New York State
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Governor’s Budget Proposal
• Maintains overall funding levels and distribution methodology.
• Maintains but modifies the transition methodology:
– Increases the cap on maximum losses by 2.5% per year
• 10.0% for 2016;
• 12.5% for 2017; and
• 15.0% for 2018.
• DOH must revise methodology if ACA cuts to Medicaid DSH are
enacted.
– Cuts have been delayed by Congress twice; set to take effect Oct. 1,
2016.
• Makes permanent the 1% withhold for the “Financial Assistance
Compliance Pool.”
Healthcare Association of New York State
www.hanys.org
Assembly’s Budget Proposal
• Accepts the Governor's proposal to extend the current distribution
methodology, for three years.
• Accepts the Governor’s transition maximum loss caps (at same levels)
over the three-year extension.
• Modifies the Governor’s proposal for DOH to revise the methodology if
ACA cuts to Medicaid DSH are enacted.
– Reconvene the Medicaid Redesign Team (MRT) technical assistance team on
indigent care reform by July 1 to develop recommendations related to the
distribution methodology and maximum loss caps to target funding to facilities
that provide a disproportionate share of care to uninsured, under-insured, and
Medicaid populations.
• Accepts the Governor’s proposal to make permanent the 1% withhold
for the “Financial Assistance Compliance Pool.”
Healthcare Association of New York State
www.hanys.org
Senate’s Budget Proposal
• Accepts the Governor's proposal to extend the current
distribution methodology, for three years.
• Accepts the Governor’s transition maximum loss caps (at same
levels) over the three-year extension.
• Does not include the Governor’s contingency provision that
would allow DOH to revise the methodology if ACA cuts to
Medicaid DSH are enacted.
• Rejects the Governor’s proposal to make permanent the 1%
withhold for the “Financial Assistance Compliance Pool” and
instead extends it for 1 year, through calendar year 2016.
Healthcare Association of New York State
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Healthcare Association of New York State
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DSH Audit State Plan Rate Year 2012
Audit Objectives
• Assess the State’s compliance with the Medicare Modernization Act
of 2003 (MMA) and the DSH Final Rule
– The State’s audit protocols to ensure that regulation is
satisfied.
– If the State made DSH payments to hospitals in excess of their
DSH cap.
– Compliance with verifications specified in the Final Rule
including:
• DSH payments comply with hospital specific DSH limits;
• Only uncompensated care costs are used to calculated hospital
specific DSH limits;
• State has record of all Medicaid payments, expenditures and
uninsured costs; and
• State’s definition of costs for individuals that are either Medicaideligible or with no source of third-party coverage complies with
federal requirements.
Healthcare Association of New York State
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CMS Final Rule
Definition of Uninsured (Highlights)
• December 5, 2014 CMS issued a Final Rule to be effective starting
December 31, 2014 (DSH audit 2011).
• Definition is now applied on a service-specific basis to those
services that the individual had no health insurance or other
source of third party coverage.
– This population needs to be included in the uninsured population for
Uncompensated Care Costs
• Clarified that exhaustion of Medicaid benefits with no other
source of third party coverage for the specific service can be
included in the Medicaid shortfall.
• Patients with third-party insurance with high copays/deductibles
are still considered insured.
Healthcare Association of New York State
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2012 DSH Audit Timeline
Audit
Fieldwork
/Desk
Procedures
June to
August
Hospital
Access to
KPMG DSH
Tool
3/30/15
2012 DSH
Audit
Webinar
1/22/15
2012 Audit
Notification
Packages
3/9/15
Deadline
for Tool
Completion
4/30/15
Audit
Report to
CMS
12/31/15
Audit
Report to
DOH
9/30/15
Source: KPMG LLP, 2012 DSH Audit Webinar
Healthcare Association of New York State
www.hanys.org
2011 DSH Audit Results
• Top three findings:
1)
Non-allowable charges and payments (57 hospitals)
–
2)
Hospitals included charges and payments for Part B
physician professional services.
Denied charges and withheld claims (46 hospitals)
– Hospital is unable to identify whether administratively
denied services payments and costs for Medicaid-eligible
individuals are included in the Tool amounts.
3)
Insufficient supporting documentation or audit
participation (41 hospitals)
– Patient level detail did not reconcile with amounts
used in tool.
Source: KPMG LLP, 2012 DSH Audit Webinar
Healthcare Association of New York State
www.hanys.org
More Information
• 2012 DSH Audit Webinar Presentation
• January 22, 2015, slides and recording on HANYS.org
• Contacts:
– DOH
• Ann Foster (ann.foster@health.ny.gov),
• Maureen Flanagan (maureen.flanagan@health.ny.gov)
– KPMG
• May Boucherak, Director (mboucherak@kpmg.com),
• Anthony Trapasso, Manager (atrapasso@kpmg.com
Healthcare Association of New York State
www.hanys.org
Contact Information
Bob McLeod
Vice President, Health Information
Healthcare Association of New York State
Bmcleod@hanys.org or (518) 431-7908
Healthcare Association of New York State
www.hanys.org