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

    Tammy Martin

    Karen Calhoon

Survey & Training Documents
   The survey and training materials can be
    downloaded from our website at
   Select the “Downloads” link
   Select “Hospitals”
   Download the 2007 DSH Survey and training
    materials if needed

Training Overview

1.   Review Federal DSH Regulation
     implemented December 2008.
2.   2007 Audit and Survey Timelines
3.   Different Processes This Year
4.   Common Findings from Last Year
5.   Review the Survey Elements


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

Federal Statutes
   Section 1923 of the Social Security Act (42 U.S.
    Code, Section 1396r-4)
   Section 1923(a) – Implementation of
       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,
       These provisions cannot be waived under Section 1915

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
             Meet OB requirements
             MIUR not less than 1%

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

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

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”

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

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

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

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

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.

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).

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.

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

     Questions / Comments?
             - Next -

        2007 Audit and
       Survey Timelines

Survey Year - 2007
1.   DSH was paid in 2007 using survey and cost
     report information from most recently settled cost
     reports (typically FYE 2004).
2.   CMS now requiring that we resurvey this year
     using cost report information from the same year
     as the DSH year.
3.   Recalculate the 2007 hospital specific DSH limit.
4.   Compare allocations to payments made in each
     year to make sure they didn’t exceed the hospital
     specific DSH limit.
5.   2007 Survey will also be used to pay the 2010
     DSH allotment.

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

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

Audit Timelines – 3 Year Cycles
            DSH Plan Year                                Audit Due Date

                  2007                       September 30, 2010

                  2008                       September 30, 2011

                  2009                       September 30, 2012

                  2010                       September 30, 2013

                  2011*                      September 30, 2014

*First year the audit is not for informational purposes and overpayments must be either
repaid or redistributed to other qualifying hospitals.

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.

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

     Questions / Comments?

             - Next -

       Process Changes

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

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.

     Questions / Comments?

              - Next -

     Findings From Last Year

Findings From Last Year

1) Including non-hospital services in charges &
        Clinics
        RHC & FQHC
        SNF

Findings From Last Year – cont.

2) Properly excluded non-hospital services in
   charges but included them in payments.
        Clinics
        RHC & FQHC
        SNF

Findings From Last Year – cont.
3) Included professional component in
            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)

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

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

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

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

     Questions / Comments?

             - Next -


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.

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

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.

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

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
    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.

Survey – Section D
Section D – Calculation of Medicaid and Uninsured Costs (Using Cost Report

    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

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.

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
        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

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

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

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

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
        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

    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.

Survey - 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

Other Information:

Please use the DSH Survey Submission

Send survey and other data to:
     Myers and Stauffer LC
     8555 W. Hackamore Dr., Suite 100
     Boise, Idaho 83709-1665
     Phone: (800) 336-7721



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