NOTICES
DEPARTMENT OF
HUMAN SERVICES
Disproportionate Share Payments for Obstetrical and Neonatal Services
[49 Pa.B. 786]
[Saturday, February 16, 2019]The Department of Human Services (Department) is announcing its intent to allocate funds for Fiscal Year (FY) 2018-2019 disproportionate share hospital (DSH) payments to qualifying Medical Assistance (MA) enrolled acute care general hospitals providing obstetrical and neonatal services. The Department is also revising the description of the qualifying criteria so that it includes separate sections for obstetrical services and neonatal intensive care services. The actual criteria, however, are not changing. Corresponding changes are being made to the payment methodology. The qualifying criteria and the payment methodology are set forth below in their entirety.
Qualifying Criteria
For the purposes of this payment, a rural hospital is defined as being located in a county outside a Metropolitan Statistical Area established by the United States Office of Management and Budget or as the only hospital licensed by the Department of Health to provide obstetrical services located in a county of the 6th, 7th or 8th class. Rural hospitals may be eligible for DSH payment for providing obstetrical services, neonatal services, or both, as follows:
(a) To be eligible for DSH payment related to obstetrical services, a rural hospital must be licensed to provide obstetrical services and must meet one of the following qualifying criteria:
(i) The hospital ranks in the top 1/3 of rural hospitals in terms of volume of obstetrical cases for MA beneficiaries in this Commonwealth during the most recent FY with available data;
(ii) The hospital has greater than 50% of all of its obstetrical cases for MA beneficiaries in this Commonwealth during the most recent FY with available data; or,
(iii) The hospital is the only hospital licensed to provide obstetrical services within the county.
(b) To be eligible for DSH payment related to neonatal services, a rural hospital must be licensed to provide neonatal intensive care services.
''Nonrural'' hospitals (those that do not meet the definition of ''rural'' as previously defined) may be eligible for DSH payment for providing obstetrical services, neonatal services, or both, as follows:
(a) To be eligible for DSH payment related to obstetric services, a nonrural hospital must be licensed to provide obstetrical services and must meet one of the following qualifying criteria:
(i) The hospital ranks in the top 1/3 of nonrural hospitals in terms of volume of obstetrical cases for MA beneficiaries in this Commonwealth during the most recent FY with available data;
(ii) The hospital has greater than 50% of all of its obstetrical cases for MA beneficiaries in this Commonwealth during the most recent FY with available data; or,
(iii) The hospital provides obstetrical care services and is located within 5 miles of any hospital that closed its obstetrical service during the previous 3 years.
(b) To be eligible for DSH payment related to neonatal services, a nonrural hospital must be licensed to provide neonatal intensive care services and must meet one of the following qualifying criteria:
(i) The hospital ranks in the top 1/3 of nonrural hospitals in terms of volume of neonatal intensive care cases for MA beneficiaries in this Commonwealth during the most recent FY with available data;
(ii) The hospital has greater than 50% of all of its neonatal intensive care cases for MA beneficiaries in this Commonwealth during the most recent FY with available data; or,
(iii) A children's hospital with greater than 40% of all of its cases for MA beneficiaries in this Commonwealth during the most recent FY with available data.
Payment Methodology
The Department will make DSH payments to those hospitals that meet the qualifying criteria using the following payment methodology:
(a) 15% of the total amount available will be paid to qualified rural hospitals as follows:
(i) Of the amount available for distribution to rural hospitals, 75% will be distributed to hospitals that qualify under section (a) of the rural hospital eligibility criteria (related to obstetrical services) using the following formula:
(A) For each hospital, determine the ratio of the hospital's obstetrical cases for MA beneficiaries in this Commonwealth to all obstetrical cases for the hospital.
(B) For each hospital, multiply the ratio under clause (A) by the number of the hospital's obstetrical cases for MA beneficiaries in this Commonwealth.
(C) Add the products under clause (B) for all hospitals.
(D) Divide the amount available for distribution to rural hospitals by the sum under clause (C).
(E) Multiply the quotient under clause (D) by the product under clause (B).
(F) For rural hospitals located in counties whose ratio of MA eligible persons to total county population exceeds one standard deviation above the mean for all rural counties, but less than 1.3 standard deviations above the mean for all rural counties, multiply the product in clause (E) by 1.50. For rural hospitals located in counties whose ratio of MA eligible persons to total county population is equal to or greater than 1.3 standard deviations above the mean for all rural counties, but less than 1.6 standard deviations above the mean for all rural counties, multiply the product in clause (E) by 1.75. For rural hospitals located in counties whose ratio of MA eligible persons to total county population is equal to or greater than 1.6 standard deviations above the mean for all rural counties, multiply the product in clause (E) by 2.0.
(ii) Of the amount available for distribution for rural hospitals, 10% will be distributed to hospitals that qualify under section (b) of the rural hospital eligibility criteria (related to neonatal services) using the following formula:
(A) For each hospital, determine the ratio of the hospital's neonatal intensive care cases for MA beneficiaries in this Commonwealth to all neonatal intensive care cases for the hospital.
(B) For each hospital, multiply the ratio under clause (A) by the number of the hospital's neonatal intensive care cases for MA beneficiaries in this Commonwealth.
(C) Add the products under clause (B) for all hospitals.
(D) Divide the amount available for distribution to rural hospitals by the sum under clause (C).
(E) Multiply the quotient under clause (D) by the product under clause (B).
(F) For rural hospitals located in counties whose ratio of MA eligible persons to total county population exceeds one standard deviation above the mean for all rural counties, but is less than 1.3 standard deviations above the mean for all rural counties, multiply the product in clause (E) by 1.50. For rural hospitals located in counties whose ratio of MA eligible persons to total county population is equal to or greater than 1.3 standard deviations above the mean for all rural counties, but less than 1.6 standard deviations above the mean for all rural counties, multiply the product in clause (E) by 1.75. For rural hospitals located in counties whose ratio of MA eligible persons to total county population is equal to or greater than 1.6 standard deviations above the mean for all rural counties, multiply the product in clause (E) by 2.0.
(iii) Of the amount available for distribution to rural hospitals, 15% will be distributed equally among hospitals that qualify under section (a) of the rural hospital eligibility criteria (related to obstetrical services).
(iv) To ensure that payments do not exceed available funds, the Department will adjust payments to each hospital using the following formula:
(A) The calculated total amount of payments for each hospital under steps (i), (ii) and (iii) in this section is divided by the total calculated amount for all hospitals to obtain a percentage, which is a ratio of each hospital's respective share of the calculated amount.
(B) The resulting percentage for each hospital in clause (A) is multiplied by the total available funds to obtain a proportional payment for each hospital.
(b) 85% of the total amount available will be paid to qualified nonrural hospitals as follows:
(i) Of the amount available for distribution to nonrural hospitals, 52.5% will be distributed to hospitals that qualify under section (a) of the nonrural hospital eligibility criteria (related to obstetrical services):
(A) For each hospital, determine the ratio of the hospital's obstetrical cases for MA beneficiaries in this Commonwealth to all obstetrical cases for the hospital.
(B) For each hospital, multiply the ratio under clause (A) by the number of the hospital's obstetrical cases for MA beneficiaries in this Commonwealth.
(C) Add the products under clause (B) for all hospitals.
(D) Divide the amount available for distribution to nonrural hospitals by the sum under clause (C).
(E) Multiply the quotient under clause (D) by the product under clause (B).
(ii) Of the amount available for distribution to nonrural hospitals, 32.5% will be distributed to hospitals that qualify under section (b) of the nonrural eligibility criteria (related to neonatal services) using the following formula:
(A) For each hospital, determine the ratio of the hospital's neonatal intensive care cases for MA beneficiaries in this Commonwealth to all neonatal intensive care cases for the hospital.
(B) For each hospital, multiply the ratio under clause (A) by the number of the hospital's neonatal intensive care cases for MA beneficiaries in this Commonwealth.
(C) Add the products under clause (B) for all hospitals.
(D) Divide the 32.5% by the sum under clause (C).
(E) Multiply the quotient under clause (D) by the product under clause (B).
(iii) Of the amount available for distribution to nonrural hospitals, 15% will be distributed equally among hospitals that qualify under section (a) of the nonrural eligibility criteria (related to obstetrical services).
All payment limitations are still applicable, including those limitations that the Commonwealth may not exceed its aggregate annual DSH allotment and that no hospital may receive DSH payments in excess of its hospital-specific limit. The Department will not redistribute DSH payments made under this class of DSH payments to qualifying hospitals as a result of a qualifying hospital exceeding its hospital-specific DSH limit.
Fiscal Impact
The FY 2018-2019 impact, as a result of these payments, is $13.992 million ($6.681 million in State general funds and $7.311 million in Federal funds) upon approval by the Centers for Medicare & Medicaid Services.
Public Comment
Interested persons are invited to submit written comments regarding this notice to the Department of Human Services, Office of Medical Assistance Programs, c/o Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120. The Department will review and consider comments received within 30 days of this notice.
Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
TERESA D. MILLER,
SecretaryFiscal Note: 14-NOT-1290. (1) General Fund; (2) Implementing Year 2018-19 is $6,681,000; (3) 1st Succeeding Year 2019-20 through 5th Succeeding Year 2023-24 are $0; (4) 2017-18 Program—$3,681,000; 2016-17 Program—$3,681,000; 2015-16 Program—$3,681,000; (7) MA—Obstetric and Neonatal Services; (8) recommends adoption. Funds have been included in the budget to cover this increase.
[Pa.B. Doc. No. 19-224. Filed for public inspection February 15, 2019, 9:00 a.m.]
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