As reported in CHA News last week, the Department of Health Care Services (DHCS) recently sent hospitals invoices covering the first six fee-for-service cycles of the 2017-19 Hospital Fee Program. The attached draft model incorporates those invoiced amounts, as well as the supplemental fee-for-service payment amounts approved last month by the Centers for Medicare & Medicaid (CMS) services. Notably, the “Gain.Contribute” tab in the model includes a summary, by state fiscal year, of the estimated fee and payment amounts for the 30-month program period. CHA is in the process of creating hospital-specific fee and payment schedules, which will be distributed within the next week.
It is important to note that the managed care components of the program have not been approved by CMS and, therefore, the payment amounts in the draft model are very preliminary. Furthermore, the supplemental Medi-Cal managed care payments made through the new directed payment mechanism have been estimated using inpatient utilization data publicly reported to the Office of Statewide Planning and Development for fiscal years ending in 2015. However, in actuality, the directed payments will be made for inpatient and outpatient services provided to in-network patients during the current state fiscal year.
Last week, the Department of Health Care Services Disproportionate Share Hospital Unit emailed a survey to private hospitals that participate in the hospital fee program. The Calendar Year 2016 Quality Assurance Fee Survey seeks information related to hospital fees and payments during calendar year 2016 of the hospital fee program; results will be used to calculate Medi-Cal disproportionate share hospital payments for state fiscal year 2018-19. If a hospital fails to respond to the survey by Feb. 9, the department will use internal data to estimate the fees and payments from the hospital fee program, which may impact eligibility or payment amounts.
As reported in CHA News last month, the Centers for Medicare & Medicaid Services approved the supplemental fee-for-service payments and overall tax structure of the 2017-19 hospital fee program. CHA is working with the Department of Health Care Services (DHCS) to update the draft model so hospital-specific implementation schedules can be distributed by the end of this month. DHCS expects the first round of invoices will be sent to hospitals within the next month, with a due date in late February. As soon as the exact timing is finalized, CHA will notify members via CHA News.
Now that the fee-for-service component of the program has been approved, DHCS has turned its attention to the managed care components of the program. As previously reported in CHA News, the new federal Medicaid managed care rules require significant changes to how supplemental Medi-Cal managed care payments are made through the hospital fee program. Effective July 1, 2017, roughly half of the supplemental Medi-Cal managed care payments must be transitioned to a directed payment methodology. Under the directed payment method, supplemental payments can be made only to network providers based on utilization in the encounter data file from the current rate year.
Yesterday, CHA met with representatives from the Centers for Medicare & Medicaid Services (CMS) at its headquarters in Baltimore to discuss the Medicaid managed care rules finalized in May 2016 and January 2017 and, specifically, their impact on the Quality Assurance Fee (QAF) program.
As part of the House budget resolution process, the Energy and Commerce Committee announced earlier today the Common Sense Savings Act of 2016 (H.R. 4725), legislation introduced by Health Subcommittee Chairman Joe Pitts (R-PA) to reduce the federal deficit by almost $25 billion through cuts to Medicaid, the Children’s Health Insurance Program (CHIP) and the Prevention and Public Health Fund. The legislation, opposed by CHA, would:
Eliminate the enhanced federal Medicaid matching funds available for the coverage of prisoners as a result of the Affordable Care Act’s Medicaid expansion. States would continue to be allowed to receive federal funds for Medicaid coverage for prisoner inpatient services, but at the traditional federal matching rate.
Reduce the amount of the non-federal share that can come from providers by gradually reducing the Medicaid provider tax threshold from its current 6 percent of the net patient service revenues to 5.5 percent (the amount that was in place until Oct. 1, 2011).
Eliminate the 23 percentage point increase in the CHIP matching rate implemented in the Affordable Care Act.
Repeal the Prevention and Public Health Fund, which amounts to more than $14 billion over the next 10 years.
Close a loophole in a current statute that has allowed lottery winners to retain taxpayer-financed Medicaid coverage.