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PA Bulletin, Doc. No. 18-1503



Supplemental Payments to Qualifying Hospitals with High Medical Assistance Graduate Medical Education and Changes to Disproportionate Share and Supplemental Payment Reconciliation Process

[48 Pa.B. 5928]
[Saturday, September 22, 2018]

 The Department of Human Services (Department) is announcing its intent to establish a High Medical Assistance (MA) Graduate Medical Education (GME) supplemental payment for qualifying hospitals that the Department has determined provide a high volume of services to MA beneficiaries and to modify the payment reconciliation process used for certain MA hospital payments.


 Since 2010, the Department has imposed a monetary assessment on the net inpatient revenue of licensed hospitals in this Commonwealth, other than exempt hospitals under Article VIII-G of the act of June 13, 1967 (P.L. 31, No. 21) (62 P.S. §§ 101—1503), known as the Human Services Code. The Human Services Code was amended June 22, 2018, effective July 1, 2018, by P.L. 258, No. 40, (Act 40). Act 40 amended Article VIII-G, 62 P.S. §§ 801-G—816-G, to authorize the Department to also assess the net outpatient revenue of those hospitals. As required by Article VIII-G, funds generated by the hospital assessment on both net inpatient and outpatient revenues are deposited into a restricted account called the Quality Care Assessment Account (see 62 P.S. § 805-G(a)) and are used to make MA payments to hospitals and managed care organizations (MCO) for inpatient and outpatient services, as well as other purposes as approved by the Secretary for inpatient hospital, outpatient hospital and hospital-related services. The Department intends to use some of these funds for a High MA GME Payment.

High MA GME Payments

 The Department intends to establish a High MA GME payment for acute care general hospitals that provide a significant portion of their inpatient acute care services to MA beneficiaries and that demonstrate their commitment to providing GME through their support of a high number of interns and residents. GME is essential to the training of the next generation of medical providers, which then builds the foundation to improved access to hospital acute care services. Hospitals that serve a higher proportion of MA beneficiaries are more reliant upon the MA Program and have a reduced ability to offset their GME costs with revenue from private insurers and other sources. This payment proposal is intended to improve access to quality healthcare across the Commonwealth by encouraging high MA hospitals to promote and expand GME programs.

 For a hospital to qualify for this supplemental payment, it must meet all of the following listed criteria. Unless otherwise stated, the source of the information is the State Fiscal Year (FY) 2014-2015 MA-336 Hospital Cost Report available to the Department as of July 2017.

 a) The hospital is enrolled in the Commonwealth MA Program as a general acute care hospital;

 b) The hospital's MA Dependency ratio exceeds either 20% or the Statewide average MA Dependency ratio among all Commonwealth acute care general hospitals. (For purposes of this payment, the MA Dependency ratio is defined as the hospital's total inpatient acute care days (Fee-for-Service (FFS) and managed care) for Commonwealth MA beneficiaries divided by the hospital's total inpatient acute care days); and,

 c) The hospital must have at least 120 Full Time Equivalent (FTE) interns and residents.

 A qualifying hospital's annual payment amount is calculated by multiplying the hospital's Commonwealth MA managed care acute care inpatient days, as identified in the FY 2014-2015 MA-336 Hospital Cost Report available to the Department as of July 2017, by one of the following:

 a) $200 for hospitals with at least 550 intern and resident FTEs and a MA Dependency ratio above 20%; or

 b) $25 for other qualifying hospitals.

Payment Reconciliation

 The Department intends to modify the payment reconciliation process used to determine the available funding for certain MA payments funded with assessment revenues. Specifically, the Department is proposing to:

 a) Include the following payments in the annual payment reconciliation process and compare the allocated payment amounts for these payments to projected and actual payment amounts as part of the reconciliation factor calculation: High MA GME payment; increased expenditures for FFS observation services; and increased capitated rates to MCOs for outpatient hospital services, for observation services related to implementation of the FFS observation policy, and for the Hospital Quality Incentive Program.

 b) Specify that a calculated reconciliation factor greater than one will result in a reconciliation factor of one; and

 c) Change the amount of available funding for payments to be reconciled to $360.284 million (and of this amount, the portion attributable to the inpatient disproportionate share payments and direct medical education payments is $41.935 million).

 The Department is not otherwise changing its approved State Plan provisions addressing the payment reconciliation process.

Fiscal Impact

 Beginning with FY 2018-2019, the Department will allocate an annualized amount of $23.669 million for high MA GME payments upon approval by the Centers for Medicare & Medicaid Services adjusted to reflect the reconciliation factor described in Part VI of the Pennsylvania State Plan.

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 in determining the final payment methodology for these payments.

 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).


Fiscal Note: 14-NOT-1277. (1) General Fund; (2) Implementing Year 2018-19 is $11,302,000; (3) 1st Succeeding Year 2019-20 through 5th Succeeding Year 2023-24 are $0; (4) 2017-18 Program—$477,690,000; 2016-17 Program—$450,970,000; 2015-16 Program—$392,918,000; (7) MA—Fee-for-Service; (8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 18-1503. Filed for public inspection September 21, 2018, 9:00 a.m.]

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