Last week, the Department of Health Care Services (DHCS) sent hospitals invoices covering the first phase of managed care directed payments (MC2 DP(A)) for the 2017-19 Hospital Fee Program. The invoices cover July 1 – Dec. 31, 2017, and are due Aug. 22.
While these rates have not been formally approved by the Centers for Medicare & Medicaid Services, DHCS will make the supplemental capitation payments to the Medi-Cal managed care plans in mid-to-late September. Hospitals can expect to begin receiving payments from Medi-Cal managed care plans by the end of October.
DHCS will email the final results for the MC2 DP(A) phase to its hospital contacts within the next week. These emails will include the final directed payment amounts, separated by inpatient ($800.62 per in-network inpatient day) and outpatient ($107.49 per in-network emergency room/outpatient visit) for each hospital and by health plan.
By the end of this month, DHCS will post the final detail files for MC2 DP(A) to its Secure File Transfer Protocol site, including the accepted encounter level information and contract status.
As a reminder, the invoices include new payment instructions that allow hospitals to utilize DHCS’ electronic funds transfer website. It is critical that all hospitals pay their invoices in full and on time.
Finally, several hospitals noticed this week that the MC2 DP(A) invoices were for a higher proportion of fees than they were expecting. For example, they estimated that 50% of the remaining state fiscal year (SFY) 2017-18 hospital fees would be collected with the first directed payment phase, and the remaining 50% of fees would be collected for the second directed payment phase. DHCS confirmed that, while it allocated the managed care fees differently this cycle, it will not collect more than the hospital’s total SFY 17-18 fees. Therefore, if your hospital is paying more than 50% of the remaining fees this time, your hospital will pay less in fees with the second directed payment phase in March 2020.
Questions can be directed to Ryan Witz, CHA’s vice president health care finance initiatives.