Hospital Provider FeeHospital Provider Fee Web Seminar · 2019. 11. 18. · 1 Hospital Provider...

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Hospital Provider FeeHospital Provider FeeWeb Seminar

September 10, 2010September 10, 2010

September 13, 2010

Welcome & Program Overview

Mary BarkerCalifornia Hospital AssociationCalifornia Hospital Association

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Agenda

Lois Suder, Executive Vice President/COO, C lif i H it l A i tiCalifornia Hospital Association The History

Anne McLeod, Vice President, Finance Policy, California Hospital Association

Lloyd A. Bookman, Esq., Founding Partner, H L d & B k IHooper Lundy & Bookman, Inc. The Legal and Regulatory Steps The Big Picture Fee Structure and Timing Payment Structure and Timing

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Agenda (cont.)

Lois Suder Executive Vice President/COO Lois Suder, Executive Vice President/COO, California Hospital Association The CHFT Private Program

Questions and Answers

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Faculty: Lois Suder

Lois M Suder is the Executive Vice President andLois M. Suder is the Executive Vice President and Chief Operating Officer for the California Hospital Association. She is responsible for operations, accounting, information systems, education and publications, volunteer programs, member communications, Board of Trustees meetings, CHA’s charitable organization and CHA’s subsidiaries and

l t d i Sh th bli lirelated companies. She oversees the public policy staff and previously served as CHA’s Senior Vice President and Chief Financial Officer.

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Lois SuderCalifornia Hospital Association

Hospital Provider Fee Program—The History

California Hospital Association

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The Fee Program

H t hHow we got here…

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Five Principles

1. Hospitals must be permanently protected p p y pwith respect to payments and the amount of the fee.

2. Hospitals must be paid by Medi-Cal at the highest level allowed under federal law.

3. The state must be required to ensure that criterion 2 is met, even if new General Fund money is required (state maintenance of effort).

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Five Principles (cont.)

4 All of the money generated from the4. All of the money generated from the hospital fee must be used solely to benefit hospitals.

5. Only the voters can change the program (that is, neither the Legislature nor the Governor could modify the program); however thecould modify the program); however, the Legislature could modify the program by a super majority but only in furtherance of the program and its intent.

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The Process

Over 135 board, area council, section, and , , ,special membership meetings were held throughout the state to reach a consensus

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The Reason

In 2009 alone, California hospitals lost , p$4.6 billion in actual costs for treating Medi-Cal patients

Hospital Provider Fee program nets $2.65 billion in new money

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“One for All, All for One” Concept

CMS requires “winners” and “losers”q

Private plan developed through California Health Foundation and Trust (CHFT)

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Faculty: Anne McLeod

Anne McLeod is the Vice President of Finance PolicyAnne McLeod is the Vice President of Finance Policy for CHA. In this role, Ms. McLeod represents members’ interests on health care policy and technical issues before the state Legislature and regulatory agencies, federal agencies and national committees. For the past 18 months, she has been leading the charge for the Hospital Provider Fee as

ll th M di C l i Sh i l iblwell as the Medi-Cal waivers. She is also responsible for staffing the CHA Chief Financial Officer Advisory Committee and coordinating the CHA Disproportionate Share Hospital (DSH) Task Force.

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Faculty: Lloyd A. Bookman

Lloyd A Bookman Esq is a founding partner in theLloyd A. Bookman, Esq. is a founding partner in the Los Angeles law office of Hooper, Lundy & Bookman, Inc. (HLB). He has specialized in Medicare and Medicaid reimbursement and compliance since 1979. He also represents health care providers in fraud and abuse matters involving false claims and anti-kickback issues, in self-referral matters—serving as counsel in i il d d i i t ti liti ti d i ti ticivil and administrative litigation and investigations—

and as special counsel in criminal matters.

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The Legal and Regulatory Steps Th Bi Pi tThe Big PictureFee Structure and TimingPayment Structure and Timing

Anne McLeodCalifornia Hospital Association

Lloyd A. Bookman, Esq.Hooper, Lundy & Bookman, Inc.

Hospital Fee Program: The Opportunity

Medi-Cal reimbursement rates lowest in country

$3,168 per enrollee in California

$5,163 national average

$7,000 + in some states

$4 6 billion in uncompensated care costs

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$4.6 billion in uncompensated care costs for hospitals

$2 billion +/- in “upper payment limit” room

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Hospital Fee Program: The Legislative Process

Legislative Processg AB 1383 passed both Houses Sept. 12, 2009

Signed by Governor Oct. 11, 2009

AB 188 – appropriations

CMS required some re-working – AB 1653

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AB 1653 passed both Houses and signed into law by the Governor Sept. 8, 2010

Hospital Fee Program: Regulatory Steps

Federal laws and regulationsg

Broad based and uniformly applied

– Cannot just tax Medicaid

No direct or indirect guarantee to get as much back as paid in

Hold harmless provision

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– Hold harmless provision

No direct correlation between taxes and payments

– Statistical criteria must be met

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Hospital Fee Program: Big Picture

Financial limitations

Six UPLs in California Three Inpatient/Three Outpatient

– State owned public hospitals

– Non state owned public hospitals

– Private hospitals

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Each pool is unique and each group of hospitals must not be paid at amounts greater than allowed by their UPL “room”

Managed care payments must be “actuarially sound”

Hospital Fee Program: Big Picture

Encompasses 21 months, April 2009 thru p , pDecember 2010

Raises $3.08 billion in hospital fees

$560 million is provided to the state for Children’s Coverage

Draws down $3.2 billion in federal funds, based on 61.59% enhanced federal match

Net benefit to California hospitals is $2.65 billion

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Hospital Fee Program: Fee Structure

The Data:

Fee methodology is based on historical patient days

Annual Financial Disclosure Report for the Office of Statewide Health Planning and Development (OSHPD) for fiscal year

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p ( ) yending in 2007, as of Oct. 31, 2008

Information is static — no changes, corrections or alterations beyond that date


The Formula:

Exempt facility does not pay the fee

Public hospitals

Most “specialty” hospitals

Medicare long-term care hospital

S ll d l d i t d i th fi l

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Small and rural designated in the fiscal year 2007 OSHPD annual report

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The Formula:

Fee-for-service days

$215.30 per day

Managed care days

$22.50 per day

M di C l d

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Medi-Cal days

$232.00 per day

This formula generates $1.76 billion annually, or $3.08 billion over the 21 months.

Timing of Fee Collection


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Statute outlines 7 payment cycles (with flexibility built in) April 1, 2009 through June 30, 2009

July 1, 2009 through Sept. 30, 2009

Oct. 1, 2009 through Dec. 31, 2009Oct. 1, 2009 through Dec. 31, 2009

Jan. 1, 2010 through March 31, 2010

April 1, 2010 through June 30, 2010

July 1, 2010 through Sept. 30, 2010

Oct. 1, 2010 through Dec. 31, 201024

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Timing of Fee Collection


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Major challenge collecting 21 months of fee in three months

DHCS will issue a fee invoice to hospitals indicating the specified timeframe for payment

Any overdue payments will be withheld by Any overdue payments will be withheld by DHCS

Without the collection of the fee in full and on time, supplemental Medi-Cal payments back to the hospitals will be impaired

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Timing of Fee Collection – 7 Cycles


1st • September 15th

2nd • October 1st

3rd • October 15th

4th • November 1stModifications to the schedule are already required

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5th • November 15th

6th • December 1st

7th • December 15th

required.

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Non-payment will result in:p y

Interest on unpaid balance accrues on the day after the payment was due

Penalties apply after 60 days past due

Penalty equals the amount of interest charged

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charged

Unpaid fees will be deducted from any Medi-Cal payments owed to the hospital, including the fee generated payments

Payments to Hospitals

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Hospital Fee Program: Payments

Payments are based on prior period y p putilization, but they are not payments forthose services

Claims will not be re-processed and re-adjudicated

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Several types of supplemental payments:yp pp p y

Fee-for-service inpatient

High-acuity and trauma

Sub-acute care

Psychiatric inpatient

Outpatient

Managed Care Medi-Cal

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Payment data is static — fixed for the duration yof the program:

Paid claims data for calendar year 2008 as of July 10, 2009, as determined by the DHCS

Fi l M di C l tili ti t ti ti f

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Final Medi-Cal utilization statistics for the 2008 – 09 state fiscal year as calculated on Sept. 15, 2008


Private Hospital Payments:p y

Acute inpatient care $640.46 per day

Acute psychiatric days $485.00 per day

Outpatient based on prorated share of all Medi-Cal outpatient paid claims for the

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2007 calendar year (as of Jan. 26, 2008)

Managed care payments modeled at $659.50 per day

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If qualifying criteria met:

Trauma days (Level I, Level II, Adult/Ped Level I, or Adult/Ped Level II trauma center) $1,350 per day

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High acuity days (Medi-Cal coronary care unit, pediatric intensive care unit, intensive care unit, neonatal intensive care unit, burn unit) $1,350 per day



Qualifying criteria:

Medicaid inpatient utilization rate

– Less than 41.1 percent

– Greater than 5.0 percent

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High acuity days

– At least 5.0 percent of all general acute days

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Subacute service payments:

Inpatient payments are available based on subacute services provided to Medi-Cal patients in the calendar year 2008

The amount is equal to a 40 percent increase in

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q pthe calendar year 2008 payments for subacute services

Qualifying criteria:

– Medicaid utilization rate between 5.0 and 41.1 percent


Nondesignated Public Hospital Payments:g p y

Acute inpatient care $218.82 per day

Acute psychiatric days $485.00 per day

Managed care payments modeled at $375.00 per day

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No payments for:

Outpatient, high acuity, trauma or subacute

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Designated Public Hospital Payments:g p y

Acute inpatient psychiatric $485.00 per day

Managed Care Medi-Cal modeled at $659.50 per day

No payments for:

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Inpatient, outpatient, high acuity, trauma or subacute

Direct grants $295 million annually, or $516 million for the

21 months


Fee-for-service payments directly from DHCS p y y

Managed Care Payments

Payments routed through Managed Care plans

Payments “modeled” but not in statute

Plans have 30 days to pass through payment in f ll h i lfull to hospitals

Legislation requires that 100 percent of additional funding from Fee Program be passed through to hospitals

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Managed Care Payments (cont.)g y ( )

State must have the Managed Care payments actuarially certified — once certified the rate must be paid

Because of this requirement, state will accumulate a portion of the fees in the Quality Assurance Fund, until necessary amounts are collected

Payments from Medi-Cal Managed Care plans to hospitals likely not to start until November or even December 39

Hospital Fee Program: Timing

Fee Payments to the State Payments to Hospitals

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Hospital Fee Program: Timing

The fee and payment cycle is already late to start:p y y y

Compress to fewer cycles?

Combine multiple cycles towards the end?

Other?

DHCS has the discretion but they must consult with CHA

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Funds must be “expended” by the state by p y yDec. 31, 2010 to ensure maximum enhanced federal match

Fees that get collected in 2011 will be paid to hospitals at a lower matching rate

Thi ill h i t h t This will have an impact on what was “modeled” compared to what actually takes place

Paying the fee in full and on time is critical42

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The CHFT Private Program

Overview of the CHFT Private Program

Designed to accept contributions from g phospitals that gained

Hospitals that had a loss would be eligible to apply for grant funds

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The Private Plan

1. Enforceable Pledge Agreement g g

2. Grant Program Guidelines

3. Grant Request Form

4. Grant Approval and Conditions Letter

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Enforceable Pledge Agreement

Full consensus of the membership: p“Make net payors whole”

Way to ensure “net gainers” paid their fair share

Needed uniformity of obligation

97 percent of the pledges received

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Grant Program Guidelines

Governs how selection of grant recipients g pwill be made

States how the program will operate

Follows IRS Best Practices

Protects both contributors and CHFTProtects both contributors and CHFT

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Grant Request Form

Eligible hospitals use form to apply for the g p pp yprivate program

CHFT Board committee to award grants following grant guidelines

Committee = two non-hospital affiliated board members and CHFT President Duane Dauner

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Grant Approval and Conditions Letter

Outlines terms, conditions and requirements , qof the grant

Follows IRS Best Practices

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Hospital Fee Program: Pledge and Grant Process

Not every hospital benefits from the programy p p g

3 hospital systems and 19 stand-alone facilities pay more in the fee than what is returned to them in payments

Total losses more than $124 million for the 21 th f th

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21 months of the program

Hospitals and systems with a “net gain” will make contributions; hospitals that are “net contributors” can apply for grants

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Timing of the pledge and grant payments:g p g g p y

Pledge payments will mirror the “cycle” payments received from DHCS (and/or the plans)

CHA will calculate the “net gain” based on f id d t i d t d t

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fees paid and payments received to date

The cycle net gain as a percent of the total net gain will equal the percent of the pledge due


For Example:

Cycle 1: Fees paid to State $1,000,000

Payments received 1,500,000

Cycle 1 “net gain” 500,000

Total program modeled gain $9,000,000

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Total program modeled gain $9,000,000

Cycle gain percent of total 5.6% ($500,000/$9 mil)

Total pledge calculated $ 550,000

Pledge due in Cycle 1 $ 30,800 ($550,000 x 5.6%)

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CHA will work with DHCS to have all the information on hospital fees paid and supplemental payments disbursed

Hospitals will be “invoiced” for the calculated pledge amount due

A f d ll t d t t “ t

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As funds are collected, grants to “net contributors” will be made for each “cycle”

Questions

Online questions:Online questions:Type your question in the Chat Box, hit enter

Phone questions:To ask a question hit *1To ask a question hit 1To remove a question hit *2

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Web Seminar Evaluation

Thank you for participating in today’s y p p g yprogram. An online evaluation will be sent to you shortly.

For questions regarding the Hospital Provider Fee, contact Anne McLeod at (916) 552-7536 or amcleod@calhospital org

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(916) 552 7536 or [email protected].

• For education questions, contact Liz Mekjavich at (916) 552-7500 or [email protected].

Hospital Provider FeeHospital Provider Fee Web Seminar · 2019. 11. 18. · 1 Hospital Provider...

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