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LATEST INDUSTRY NEWS

COVID-19 Estimates of CARES Act Hospital Relief Payments

Toyon is pleased to provide this interactive model estimating hospital relief payments from the Public Health and Social Services Emergency Fund (PHSSEF). These hospital relief payment estimates are for discussion purposes only. This model includes estimated amounts from the $50bn general allocation, $12bn High Impact (with estimated hospital admissions and DSH portion isolated) and rural hospital funding.   HHS is dispersing actual funds using tax documentation and is collecting information from Sole Proprietor/Disregarded Entities (LLC). HHS published a user guide here.  
 
Please find below the estimates by CCN number, hospital type, state, county, and city (county and city are only provided with available data, some providers are not listed by county and/or city).  Provided amounts are for hospital estimates only and include acute care, critical access, skilled nursing, psychiatric, rehabilitation, LTCH, cancer, children’s hospitals as well as outpatient dialysis providers and rural health clinics.  Non-hospital providers (i.e., physicians), home health, community health medical centers and federal qualified health centers are not included in this analysis.
 
Please contact Robert Howey at 925.685.9312, ext. 3147 / robert.howey@toyonassociates.com with any questions. 
 
There are 7 distinct pages of analytics that can be navigated via the arrows at the bottom center of the visuals. For best viewing, we recommend expanding analysis to full screen by selecting the expansion arrows in the lower right-hand corner.

 

Data Sources:
 – Medicare FY 2019/2020 IPPS DRG Impact File (Updated for Correction Notice) 
 – FFY 2019 Final Rule Standard Operating (Labor and Non-Labor) and Capital Rates 
 – FFY 2019 Final Rule Post-Reclassified Wage Index Factor 
 – Medicare discharges from Medicare cases for the provider from the FY 2018 MedPAR, March 2019 update 
 – Medicare case mix index from the transfer adjusted Case Mix Index under Grouper V37 and FY 2020 Post-Acute Transfer Policy 
 – All add-ons and adjustments from this file (DSH, IME, etc) are included and be turned “on and off” on tab 2 “File Notes” 

2. Estimated Outpatient Payments for Acute Care Hospitals
    
– Worksheet E Series settlement data for Sub-providers and all other hospital types: critical access, skilled nursing, psychiatric, rehabilitation, cancer, children’s hospitals, dialysis and rural health clinics  
 – Net Patient Service Revenue from worksheet G-3, line 3, column 1
 – Total Patient Days from worksheet S-3, Part I, column 8.
 
 
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Good News from the Ninth Circuit Court of Appeals

Last week, providers won a major victory at the Ninth Circuit Court of Appeals relating to the government’s inclusion of non-covered Medicare Part A days (such as exhausted benefit days and Medicare Secondary Payer days) in the SSI Ratio of the Medicare DSH payment calculation. The Court held in favor of providers that the 2005 Rule promulgated by the Secretary of Health and Human Services be vacated on the grounds that the rule is “substantively invalid.” (Empire Health Foundation v. Azar, Case 18-35845).

Ninth Circuit Holds ‘Entitled’ Does Not Mean ‘Eligible’
The Empire Court found HHS’s implementation of the 2005 Rule, wherein HHS arbitrarily included non-covered Medicare Part A days in its calculation of the SSI Fraction, to directly conflict with the Ninth Circuit’s longstanding interpretation of the meaning of “entitled to [Medicare].” The Ninth Circuit in 1996 interpreted the meaning of the words “entitled” and “eligible” in another appeal. (Legacy Emmanuel Hospital and Health Center v. Shalala, 97 F. 3d 1261, 1265-66 (9th Cir. 1996)). According to the Legacy Emmanuel Court, “entitled” means the patient has an “absolute right . . . to payment,” whereas the word “eligible” means the patient “simply meets the Medicaid statutory criteria.” Because the Ninth Circuit’s interpretation of the word “entitled” is unambiguous, HHS’s decision to treat the words “entitled” and “eligible” as having the same meaning directly contravenes the Ninth Circuit’s interpretation of the statute and “cannot stand,” according to the Empire court.
 
What It Means To You
Toyon Associates, Inc. has been helping Providers in appealing the agency’s implementation of the 2005 Rule relating to non-covered Part A days. Toyon’s position has consistently been that non-covered Part A days should be excluded from the SSI Fraction and the portion of those days that are dual eligible be included in the numerator of the Medicaid fraction. 
 
While the Ninth Circuit decision is a great win for providers who have this issue under appeal, the decision is not yet final. HHS has 45 days from the date of the decision to request en banc review or appeal to the Supreme Court, and there is no reason to believe HHS would decline to fight this appeal further. However, in anticipation of this positive ruling, Toyon has engaged the same attorney who prevailed in the Empire Health Foundation case and is actively working to move all its pending Medicare Part A appeals into court so as to position providers in the best situation to benefit from this positive ruling.

What Now?
Providers will need to wait to see how HHS responds to the Ninth Circuit’s ruling but be prepared to move their appeals forward. Toyon will be contacting affected hospitals in the coming weeks as necessary, as more details become available on this issue.

Please contact Karen S. Kim at (888) 514-9312 or karen.kim@toyonassociates.com if you have any questions or concerns.

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