Idaho Medicaid DSH Audit Training February 24, 2010 Boise March 24, 2010 Webinar

1. Idaho MedicaidDSH Audit TrainingFebruary 24, 2010 � BoiseMarch 24, 2010 � Webinar 1

2. Survey & Training DocumentsOn-Line The survey and training materials can be downloaded from our website at HTTP://ID.MSLC.COM Select the �Downloads� link Select �Hospitals� Download the 2007 DSH Survey and training materials if needed 2

3. Training Overview Review Federal DSH Regulation implemented December 2008. 2007 Audit and Survey Timelines Different Processes This Year Common Findings from Last Year Review the Survey Elements 3

4. Federal DSH Regulations 4

5. Federal DSH Regulation Overview Beginning with DSH year 2005, CMS requires an audit of DSH payments. Audits must be based on a �state plan year� Uncompensated care must be calculated using Medicare cost reporting principles Audits must perform 6 verification steps to ensure compliance with statutory requirements 5

6. 6 Federal Statutes Section 1923 of the Social Security Act (42 U.S. Code, Section 1396r-4) Section 1923(a) � Implementation of Requirements Required Medicaid plan to include DSH provisions effective July 1, 1988 Incorporate payment adjustment requirements Subsection (c) effective July 1, 1989 Incorporate DSH allotment Subsection (f) effective July 1, 1990 These provisions cannot be waived under Section 1915

7. 7 Federal Statutes Section 1923(b) � DSH Eligibility Requirements Defines hospitals that must be paid DSH, may be paid DSH and cannot be paid DSH Must be paid DSH (deemed hospitals) Meet OB requirements Medicaid Inpatient Utilization Rate (MIUR) at least 1 standard deviation above statewide mean, or Low Income Utilization Rate (LIUR) greater than 25% May be paid DSH (cannot be paid if these criteria are not met) Meet OB requirements MIUR not less than 1% OB Requirements � discussed laterOB Requirements � discussed later

8. 8 Federal Statutes Section 1923(c) � DSH Payment Adjustment To be consistent with the statute, the DSH payments adjustment must be: Equal to hospital Medicare I/P cost times Medicare DSH percent, or Provide for a minimum payment in proportion to the percent the MIUR or LIUR exceeds threshold, or Provide a minimum payment that varies according to the type of hospital and applies equally to all hospitals of each type

9. 9 Federal Statutes Section 1923(d) � Requirement to Qualify for DSH Payments Hospitals cannot be paid DSH unless they have at least a 1% MIUR, and Satisfy OB requirements Have two obstetricians, with staff privileges, who agree to provide non-emergency OB services to Medicaid eligibles If rural hospital, OB includes any physician Children�s Hospitals exempt Exempt from requirement if OB services not offered as of Dec. 22, 1987

10. 10 Federal Statutes Section 1923(g) � Limit on Amount of Payment to Each Hospital Payments to each hospital shall not be considered to be consistent with the Act if the payment exceeds the costs incurred providing hospital services (net of Medicaid and uninsured payments) to individuals who either are eligible for Medicaid or are uninsured �Hospital Specific DSH Limit� or �Uncompensated Cost of Care� Simplify, You can�t be paid more DSH than you incurred in uncompensated cost.Simplify, You can�t be paid more DSH than you incurred in uncompensated cost.

11. Hospital Specific DSH Limit Section 1923(g) of Social Security Act Limits the amount of DSH a state can pay each hospital Can�t pay a hospital more than the hospital�s costs of providing services to the uninsured and Medicaid populations Hospital Specific DSH Limit 11

12. Hospital Specific DSH Limit-Cont. A. Cost of services provided to uninsured - Payments received from uninsured =Net Cost of Services to Uninsured B. Medicaid Cost - Medicaid Payments (including UPL payments) = Medicaid Shortfall / Overage A+B = Hospital Specific DSH Limit 12

13. 13 Federal Statutes Section 1923(j) � Annual Report and Other Requirements Regarding Payment Adj. The State shall submit annually to the Secretary a report that includes the following: Identification of each DSH hospital that received a payment, and the amount of the payment Other information the Secretary determines necessary to ensure appropriateness of the payments

14. 14 Federal Statutes Section 1923(j) � Annual Report and Other Requirements Regarding Payment Adj. Certified Audit Requirements: The extent hospitals reduced their uncompensated care cost to reflect DSH payments Payment comply with the requirement of Sec. (g) Only uncompensated care cost of I/P and O/P hospital services were included in the hospital-specific DSH limit The state included all payments under Title XIX, including supplemental payments, in the hospital specific limit The state documents and retained records of all its cost under this Title

15. 15 Federal Regulation Conditions for Federal Financial Participation (FFP) (42 CFR 455.304) Specific Requirements Verification No. 1: Each hospital in the state that qualifies for a DSH payment is allowed to retain that payment to offset its uncompensated costs. Verification No. 2: DSH payments made to each qualifying hospital comply with the hospital-specific DSH payment limit. The DSH payments made in the audited Medicaid state plan year must be measured against the actual uncompensated care cost in that same plan year. Verification No. 3: Only uncompensated care costs of furnishing inpatient and outpatient hospital services to Medicaid and uninsured individuals are eligible for inclusion of the hospital-specific DSH limit.

16. 16 Federal Regulation Conditions for Federal Financial Participation (FFP) (42 CFR 455.304) Specific Requirements (continued) Verification No. 4: For purposes of the hospital-specific DSH limit, Medicaid payments which are in excess of Medicaid costs must be applied against the uncompensated care costs. Verification No. 5: Any information and records of all of a hospital�s Medicaid inpatient and outpatient and uninsured service costs have been separately documented and retained by the state. Verification No. 6: The information in Verification No. 5 includes a description of the methodology for calculating each hospital�s payment limit under Section 1923(g)(1).

17. 17 Federal Regulation Conditions for Federal Financial Participation (FFP) (42 CFR 455.304) Transition Provision Findings of state reports and audits for Medicaid state plan years 2005-2010 will not be given weight except to the extent that the findings draw into question the reasonableness of the state�s uncompensated care cost estimates used for calculating prospective DSH payments for Medicaid state plan year 2011 and thereafter.

18. Rule Changes Probably July 1, 2011 2005 � 2010 audits will be for informational purposes only 2 Choices for any DSH overpayments: Return federal share Redistribute funds to other qualifying hospitals State plan must reflect this policy 18

19. Questions / Comments? - Next - 2007 Audit and Survey Timelines 19

20. Survey Year - 2007 DSH was paid in 2007 using survey and cost report information from most recently settled cost reports (typically FYE 2004). CMS now requiring that we resurvey this year using cost report information from the same year as the DSH year. Recalculate the 2007 hospital specific DSH limit. Compare allocations to payments made in each year to make sure they didn�t exceed the hospital specific DSH limit. 2007 Survey will also be used to pay the 2010 DSH allotment. 20

21. Who Must File a Survey If you received a DSH allocation for DSH year 2007 � You must submit a survey And/or - If you want to be considered for a current year 2010 DSH payment, you must file a survey 21

22. Audit Timelines Surveys must be received by May 31, 2010 (holiday, so must be to M&S by 05/28/10!) All hospitals will receive either a desk review or a field audit this summer Audits will be pre-scheduled with your staff We expect that field audits will be conducted between June 1 and July 1, 2010 22

23. Audit Timelines � 3 Year Cycles 23

24. Survey Must Cover State Plan Year DSH survey information must cover the DSH State Plan Year (not necessarily your FYE) State Plan Year: 10/01/06 � 9/30/07 Will require 1 � 3 cost reports to match 1 DSH year i.e.: FYE 12/31 for the 2007 DSH Year Cost Report Ended 12/31/06 (3 months) Cost Report Ended 12/31/07 (9 months) If we audited an applicable cost report year during the 2006 DSH audit, you don�t have to resubmit that cost report year data. 24

25. Audit Timelines � Cont. Draft audit reports are due to the state by 09/30/10 Payment of 2010 DSH allotments will follow Idaho rules 2007 surveys due 05/31/2010 Notify hospitals of preliminary DSH payment by 07/15/2010 Final DSH payments made by 09/30/2010 (or after all provider taxes have been paid) 25

26. Questions / Comments? - Next - Process Changes 26

27. Changes from the Prior Year Send providers adjustment workpapers. Send providers calculation of their as reviewed hospital specific DSH limit. Draft audit report due to state 9/30 so process will go quicker. No emailing of surveys. Must be a CD. Survey template has changed but not many changes to the type of data requested. 27

28. Costing of Idaho Medicaid Claims-Section D of Survey 2006: M&S calculated this separate from the survey process 2007: You will key this information using your Medicaid cost settlement So you can see your total HSDL Key Medicaid cost to Section D, Line 81 Key Medicaid payments to Section D, Line 89 See Separate Settlement Spreadsheet Examples for Calculations. 28

29. Questions / Comments? - Next - Findings From Last Year 29

30. Findings From Last Year 1) Including non-hospital services in charges & payments. Clinics RHC & FQHC SNF 30

31. Findings From Last Year � cont. 2) Properly excluded non-hospital services in charges but included them in payments. Clinics RHC & FQHC SNF 31

32. Findings From Last Year � cont. 3) Included professional component in charges. Charge should be carved out Lab X-Ray ER Payment should be carved out too. Simplest way is prorate the uninsured payment based on the percentage of charges (Exhibit B will calculate) 32

33. Findings From Last Year � cont. 4) Out of State Medicaid Data Insufficient Charges reported with no payments Payments reported with no charges Charges reported but no supporting PS&R submitted 33

34. Findings From Last Year � cont. 4) Billing System � Private status After insurance exhausted, billing system rolls patients into �Private� status These were reported as uninsured 34

35. Findings From Last Year � cont. 5) Crossover Claims Not reported We are attempting to get EDS crossover summaries for Medicaid charges and Medicaid payments Providers will report Medicare payments 35

36. Findings From Last Year � cont. 6) Reporting on the DSH year, not the cost report year. 7) Missing the Nursery Per Diem. Typically not on D-1, Part II Must be manually calculated as follows: B Part 1, Nursery Row, Total Cost Column / Worksheet S-3: Total Nursery Days 36

37. Questions / Comments? - Next - Survey 37

38. 38 Survey � General Instructions General Instruction and Identification of Cost Report Years Select your hospital from the drop-down menu Verify provider number is correct DSH year begin and end dates will populate Identify the cost report years needed to completely cover DSH year Example: DSH year 10-1-06 thru 9-30-07 Cost report years needed: 1-1-06 thru 12-31-06*, and 1-1-07 thru 12-31-07 * If this year was surveyed in DSH year 2006, you do not have to resubmit survey data and the year has been excluded from the self-populating data in the survey. Click over to excel survey now. Explain general tab layoutClick over to excel survey now. Explain general tab layout

39. 39 Survey - General General Instruction and Identification of Cost Report Years Answer survey questions 4, 5 and 6 to determine if hospital is eligible to receive DSH payments Supporting documentation for all DSH survey responses must be maintained by your hospital (for a minimum of 5 years)

40. 40 Survey � Section A Section A � Cash Subsidies and Charity Care Charges The state must report your actual MIUR and LIUR for the DSH year - data is needed to calculate the LIUR Provide the amounts for each cost report year needed to cover the DSH year If cash subsidies are specified for I/P or O/P services, record them as such, otherwise prorate them based on charges.

41. 41 Survey � Section B Section B � Out of State Medicaid Provider Numbers List your Medicaid provider names and numbers for states other than your home state. If more lines are needed than provided on the form, attach a complete list to your survey

42. 42 Survey � Section C Section C � Net hospital revenue from patient services Information is needed to determine your actual LIUR for the DSH year. A separate schedule must be used for each cost report year covering a portion of the DSH year. Data elements used in the calculation are: Inpatient hospital charges Net hospital revenue The form provides space to allocate contractual allowances among Worksheet A cost centers. If such an allocation is not possible, record a single amount in each of the columns (inpatient, outpatient, & non-hospital). If your records don�t split contractual allowances between these groups, allocate the contractuals based on gross charges.

43. 43 Survey � Section D Section D � Calculation of Medicaid and Uninsured Costs (Using Cost Report Methods) For each cost report covering a portion of the DSH year, the hospital should record the routine per diem costs and ancillary cost-to-charge ratios for each cost center. Use cost report schedules D-1 and C for these values Enter inpatient (routine) days, I/P and O/P ancillary charges. The form will calculate cost for: In-State FFS Medicaid* In-State Managed Care In-State FFS Cross-Over In-State Managed Care Cross-Over * For Idaho services that are cost settled, refer to the survey instructions for Section D. Payment data should agree to PS&R (or MR-0-14, etc.) reports from Medicaid and/or managed care agencies

44. 44 Survey � Section D, cont. Section D � Calculation of Medicaid and Uninsured Costs (Using Cost Report Methods) For uninsured services, patient days (by routine cost center) and ancillary charges by cost center are needed Survey form Exhibit A shows the data elements that need to be collected and provided to Myers and Stauffer. This data will allow us to cost your uninsured services using cost report mechanics Uninsured services need to be identified for each cost reporting period covering a portion of the DSH year.

45. 45 Survey � Section D, cont. Section D � Calculation of Medicaid and Uninsured Costs (Using Cost Report Methods) Payment received for uninsured services needs to be reported on a cash basis For example, a cash payment received during the �07 DSH year (10-1-06 thru 9-30-07) that relates to a service provided in calendar 2002, must be used to reduce uninsured cost for the �07 DSH year Survey form Exhibit B has been designed to assist hospitals collect and report uninsured payments received data DSH hospitals should make a reasonable effort to identify insurance status when care was provided for all patient payments received during the DSH year. If service dates are so outdated that insurance status cannot be identified, report these cash collections on Exhibit B-1. Payment will be allocated between insured and uninsured using your collection stat during the time period when insurance status could be identified

46. 46 Survey � Section D, cont. Section D � Calculation of Medicaid and Uninsured Costs (Using Cost Report Methods) Uninsured Services: Uninsured patients are individuals with no source of third party health care coverage (insurance). If the patient had health insurance, even if the third party insurer did not pay, those services are insured and cannot be reported as uninsured on the survey

47. 47 Survey � Section E Section E � Out of State Medicaid Services Medicaid days, ancillary charges and payments received must be reported on this section of the survey. The cost and payments for another state�s Medicaid services are included in your hospital�s uncompensated care costs The data needed should be reported in the same format as data on Section D. Days, charges and payments received must agree to the other state�s PS&R (or similar) claim payment summary If your hospital provided services to several other states, please consolidate your data and provide detailed support for your survey responses

48. 48 Survey � Sections F & G Section F & G � Transplant Hospital Organ Acquisition Costs These schedules should be used to calculate organ acquisition cost for Medicaid (in-state and out-of-state) and uninsured Report data for each cost report year needed to cover the DSH year Summary claims data (PS&R) or similar documents and provider records (organ counts) must be provided to support the charges and usable organ counts reported on the survey

49. 49 Survey � Section H Section H � Section 1011, Out of State DSH Payments, Supplemental UPL Payments Section 1011: Provides reimbursement for emergency health services furnished to undocumented aliens. Because a portion of the payments are made for cost recognized for DSH, a portion of these payments must be recognized on behalf of uninsured hospital services You must report your Section 1011 payments included in payment on Exhibit B (posted at the patient level), received but not included in Exhibit B, and separate the 1011 payments between hospital services and non-hospital services (non-hospital services include physician services) Out of State DSH: If your facility received DSH payments from another state, these payments must be reported on this section of the survey Supplemental (UPL) Medicaid Payments (in-state and out-of-state): If your facility received supplemental payments, report them on line 9.

50. 50 Survey - Certification Certification Answer the question addressing if your hospital was allowed to retain 100 percent of the DSH payments it received. Providing IGT/CPE funding is not the basis for a no answer The hospital�s CEO or CFO must certify as to the accuracy and completeness of your survey responses Provide contact information for person(s) responsible for completing survey

51. 51 Other Information: Please use the DSH Survey Submission Checklist Send survey and other data to: Myers and Stauffer LC 8555 W. Hackamore Dr., Suite 100 Boise, Idaho 83709-1665 Phone: (800) 336-7721

52. 52 Questions/Comments?