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FY 2005 Indigent Care Trust Fund

FY 2005 Indigent Care Trust Fund. Disproportionate Share Hospital Program Presented to House Appropriations Health Subcommittee June 23, 2005. Overview. What is DSH? Administration of DSH Hospital Eligibility Hospital Specific DSH Limits Allocation Methodology FY 2005.

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FY 2005 Indigent Care Trust Fund

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  1. FY 2005 Indigent Care Trust Fund Disproportionate Share Hospital Program Presented to House Appropriations Health Subcommittee June 23, 2005

  2. Overview • What is DSH? • Administration of DSH • Hospital Eligibility • Hospital Specific DSH Limits • Allocation Methodology • FY 2005 Presented to House Appropriations Health Subcommittee

  3. What is DSH? • DSH = Disproportionate Hospital • Federal Funds available annually to help compensate hospitals with a disproportionate share of uncompensated care from Medicaid and uninsured patients • In Georgia, federal funds matched by intergovernmental transfers made by public hospitals – no state appropriations involved Presented to House Appropriations Health Subcommittee

  4. Administration of DSH Information Needed • Amount of Federal DSH funds available • List of Hospitals Eligible for DSH • Hospital-Specific DSH Limits • Rural or Urban Designation for Hospitals • Public or private status of hospital Presented to House Appropriations Health Subcommittee

  5. Administration of DSH (cont) Indigent Care Trust Fund Advisory Committee • Membership comprised of both rural and urban hospitals as well as public and private hospitals • Makes recommendations to DCH regarding the administration of the DSH program • Meets at least annually or more often as needed • Membership appointed by the Commissioner Presented to House Appropriations Health Subcommittee

  6. Hospital Eligibility for DSH Participation Federal Criteria (MUST MEET BOTH) • Ability to provide obstetric services to Medicaid members • Medicaid inpatient utilization rate of at least 1 percent Presented to House Appropriations Health Subcommittee

  7. Hospital Eligibility for DSH Participation State Criteria (MUST MEET AT LEAST ONE) • Medicaid inpatient hospital utilization exceeds certain level • Low-income inpatient utilization rate exceeds 25 percent of revenue • Total Medicaid charges exceed 15 percent of revenue • Non-state hospital with the largest number of Medicaid admissions in its MSA. Presented to House Appropriations Health Subcommittee

  8. Hospital Eligibility for DSH Participation State Criteria (continued) (MUST MEET AT LEAST ONE) • Children’s hospital • Designated regional perinatal center • Medicare rural referral center/Medicare DSH provider • Board of Regents teaching hospital • Small, rural, public hospital with Medicaid inpatient utilization of at least 1 percent Presented to House Appropriations Health Subcommittee

  9. Hospital-Specific DSH Limits • DSH Limit equal to Medicaid and Uninsured uncompensated care • DCH uses historical cost data compared to cash collections to determine what hospital care was not paid for by any other payers • Data is reported on the annual Hospital Financial Survey • Data inflated to approximate today’s uncompensated care Presented to House Appropriations Health Subcommittee

  10. Hospital-Specific DSH Limits Hospital Financial Surveys subject to state audit: • DCH contracts with Georgia Department of Audits for audits • All surveys subject to desk reviews • On-site reviews for • Hospitals with the largest DSH limits • Hospitals with unusual changes in data Presented to House Appropriations Health Subcommittee

  11. DSH Allocation Methodology Policies • No hospital receives more than their hospital-specific DSH limit • Intergovernmental transfers from public facilities are used to match federal DSH funds and make DSH payments • For large private or urban private hospitals, the allocation is capped at 50% of the hospital specific DSH limit Presented to House Appropriations Health Subcommittee

  12. DSH Allocation Methodology Policies • The Department calculates an initial and secondary DSH allocation based on available funds. • In the initial allocation, small, rural hospitals receive 100% of their hospital-specific DSH limits. • The secondary allocation distributes the rest of the available DSH funds to all other, eligible hospitals. Presented to House Appropriations Health Subcommittee

  13. FY 2005 • Fund Availability and Hospital Eligibility • Timeline • Changes in Data Used for Hospital Specific DSH Limits • Interim Payments • Expanded On-Site Reviews of Data • Application of Stop Loss and Stop Gain • Next Steps Presented to House Appropriations Health Subcommittee

  14. FY2005 DSH Summary Presented to House Appropriations Health Subcommittee

  15. FY 2005 Timeline • August 2004 – Annual Indigent Care Trust Fund Committee Meeting • November 2004 - Department releases Individual DSH Limits and Allocation • December 2004 – Hospitals express concerns about impact of data used in allocation • Data sources • Integrity of self-reporting and the quality of the review process Presented to House Appropriations Health Subcommittee

  16. Data for Hospital-Specific DSH Limits As compared to prior years, FY 2005 DSH Limit calculations a little different: • Based on 2003 data (CMS required) • CY 2003 ICTF Advisory Committee Recommendations applied Presented to House Appropriations Health Subcommittee

  17. FY 2004 Medicaid Claims-Based Data Data from Cost Reports available in 2002 Estimated Accrued Payments FY 2005 Hospital reported data Data from 2003 Hospital Financial Survey Cash Payments Hospital-Specific DSH LimitsMedicaid Loss Calculation Presented to House Appropriations Health Subcommittee

  18. FY 2004 Hospital reported data Data from 2001 Hospital Financial Survey Estimated Accrued Payments FY 2005 Hospital reported data Data from 2003 Hospital Financial Survey Cash Payments Hospital-Specific DSH LimitsUninsured Loss Calculation Presented to House Appropriations Health Subcommittee

  19. FY 2005 Timeline (cont.) • January 2005 – DCH Agrees to Further Review Data; Makes Interim Payments to Support Cash Flow for Hospitals • Based on 75% of preliminary FY 2005 allocation • 15% Stop Loss and Stop Gain applied based on FY 2004 allocations • No more than 90% of FY 2005 allocations were made for hospitals subject to Stop Loss provision Presented to House Appropriations Health Subcommittee

  20. FY 2005 Timeline (cont.) • February 2005 – ICTF Advisory Committee meets to advise DCH of policy areas that need clarification for on-site reviews • EXAMPLES: • Consideration of pharmacy and physician services • Advanced Payment Impact on Cash Collections Presented to House Appropriations Health Subcommittee

  21. Expanded On-Site Reviews February – May 2005 – Additional on-site reviews of data conducted by GDOAA • Expanded on-site reviews for: • Hospitals with more than 25% change in their FY 2005 DSH allocations when compared to FY 2004 • Safety Net Hospitals • Newly Eligible for DSH in FY 2005 • More than 85 hospitals subject to on-site reviews. Presented to House Appropriations Health Subcommittee

  22. Expanded On-Site Reviews • Data problems identified • Lacked detailed, patient-level data • Data not delineated between services covered by DSH vs. other programs. • Time limitations prevented GDOAA from accepting some re-created data reports supporting the HFS • DCH used data proxies to validate the reasonableness of self reported data when GDOAA could not validate during on-site reviews Presented to House Appropriations Health Subcommittee

  23. Outcome of Extended On-Site Reviews Presented to House Appropriations Health Subcommittee

  24. June DSH Allocations-Initial- Presented to House Appropriations Health Subcommittee

  25. Why Such Swings in Payments? • Update to newer data reflects growth in uncompensated care • Implementation of ICTF Advisory Committee recommendations for data sources • Smaller pool of funds to distribute • More hospitals participating • Change in hospital business practices Presented to House Appropriations Health Subcommittee

  26. Final Allocations • Final Allocation includes a Stop Loss and Stop Gain and a protection for “negative” balances • 7% Stop Loss applied to FY 2004 hospital-specific DSH limits • 14% Stop Gain applied to FY 2004 hospital-specific DSH limits • Eight facilities held harmless where their interim payments exceeded their final DSH allocation Presented to House Appropriations Health Subcommittee

  27. Impact of Stop Loss/Stop Gain Presented to House Appropriations Health Subcommittee

  28. Final DSH Allocations Presented to House Appropriations Health Subcommittee

  29. Next Steps • Hospitals Provide Notice of Intent to Transfer Intergovernmental Funds by Friday, June 24 • If all transfers received on June 27, payments made by June 28 • If all transfers not received, remaining FY 2005 funding rolled forward to distribute in FY 2006 – NO PAYMENTS MADE IN JUNE • For FY 2006, seek hospital consensus, through an expanded ICTF Advisory Committee, on data collection and DSH fund allocation methodologies Presented to House Appropriations Health Subcommittee

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