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IMPORTANT COVID-19 HOSPITAL FUNDING UPDATE

 

 

 

 

 

1. Important Deadline:

June 15 is the deadline to submit January 1 through June 10 COVID-19 inpatient admissions for the next round of High Impact Funding.

2.  HHS released updated FAQs including:

  • Reporting COVID-19 admissions.
  • Reporting expenses and lost revenues.
  • Clarifications for parent organizations with subsidiaries.

3. HHS allocated $25 billion toward:

  • $15 billion for Medicaid & CHIP providers.
  • $10 billion for Safety Net Hospital Funding.

 

Toyon is pleased to provide this update on the CARES Act Public Health and Social Services Emergency Fund (PHSSEF).   For more information, or to contact any of our team members, please feel free to visit Toyon’s website.

1. Important Deadline: Monday June 15
HHS contacted all hospitals requesting COVID-19 positive-inpatient admissions for January 1 through the end of the day June 10.  These cases will be used for the second round COVID-19 High Impact funding.  Funding from the first round of High Impact Payments will be taken into account in the second round.  Hospitals have until June 15 (9 PM EDT) to submit admission detail.  Toyon recommends hospitals evaluate HHS’s FAQs and contact TeleTracking for assistance 
(877-570-6903).
 
2. Observations from Updated FAQs
The CARES Act Provider Relief Fund FAQs were last updated Tuesday June 9.   Listed below are notable updates by category:
 
 
Reporting COVID-19 Admissions:
  • Patients with a pending positive test that came back positive after June 10 are not allowed in COVID-19 admissions data due June 15.
  • Do not include emergency department patients in COVID-19 admissions data.
  • Admissions occurring at multiple campuses, under the same TIN, should be reported separately and not rolled up into one count.
  • If the prior submission of COVID-19 positive admissions was submitted in error (i.e., all COVID-19 positive admissions submitted by system instead of by facility), HHS requests providers to use TeleTracking to correct and update the data to reflect all COVID-19 positive inpatient admissions from January 1 through June 10.
CARES Provider Relief Funding
  • HHS expects providers will only use Provider Relief Fund payments for permissible purposes. If, at the conclusion of the pandemic, providers have leftover Provider Relief Fund money that cannot be expended on permissible expenses or losses, then providers will return this money to HHS. 
COVID-19 Expenses and Lost Revenues
  • HHS will be providing further guidance about the type of documentation to provide per the terms and conditions (e.g., documentation due with quarterly reports July 10).  
  • HHS clarifies the term “healthcare related expenses attributable to coronavirus” is a broad term for determining eligibility of expenses and lost revenues eligible for reimbursement including:
    • supplies used to provide healthcare services for possible or actual COVID-19 patients,
    • equipment used to provide healthcare services for possible or actual COVID-19 patients,
    • workforce training; developing and staffing emergency operation centers; reporting COVID-19 test results to federal, state, or local governments,
    • building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated; and
    • acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing, and technology to expand or preserve care delivery.
  • Providers may have incurred eligible health care related expenses attributable to coronavirus prior to the date on which they received their payment.  HHS expects that it would be highly unusual for providers to have incurred eligible expenses prior to January 1.
  • The term “lost revenues that are attributable to coronavirus” means any revenue lost to providers due to the coronavirus. 
  • HHS encourages the use of funds to cover lost revenue so providers can respond to the coronavirus public health emergency to cover employee or contractor payroll, employee health insurance, rent or mortgage payments, equipment lease payments and electronic health record licensing fees.
Parent Organizations and Subsidiaries
  • Parent organizations with multiple billing TINs that each received payments, may attest and keep the payments as long as providers associated with the parent organization were providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31 and can otherwise attest to the Terms and Conditions.  The parent organization can allocate funds at its discretion to its subsidiaries. If the parent organization would like to control and allocate Provider Relief Fund payments to its subsidiaries, the parent organization must attest to accepting its subsidiaries’ payments and agreeing to the Terms and Conditions.
  • Providers with TINs covering all business lines can report lost revenues under the same TIN that are actively caring for patients with COVID-19 or actively working to prevent the spread of COVID-19.
  • Parent entities, submitting revenue information on behalf their subsidiaries may encounter an issue if they have multiple Medicare/Medicaid provider numbers (there is only one space in the HHS Portals to populate these numbers). HHS states these providers should submit a statement on the first page of the uploaded tax return file stating (i) the parent entity’s Filing TIN and that it does not bill Medicare and (ii) a schedule of the billing subsidiaries, their Billing TINs, their Medicare/Medicaid ID numbers, and gross sales or receipts.
On Tuesday, June 9, HHS announced the following funding allocations:
  • $15 billion Medicaid and CHIP funding to eligible providers that participate in state programs and have not received a payment from the Provider Relief Fund General Distribution. Approximately one million health care providers may be eligible for this funding.
  • $10 billion safety net funding to approximately 760 hospitals. HHS states the safety net distribution will occur this week. Recipients will receive a minimum payment of $5 million and a maximum payment of $50 million. In order to qualify for this funding, hospitals must have:
    • A Medicare Disproportionate Payment Percentage (DPP) of 20.2 percent or greater,
    • average Uncompensated Care per bed of $25,000 or more, and
    • profitability of 3 percent or less, as reported to CMS in its most recently filed Cost Report.

Toyon has updated our Provider Relief Fund estimates to include hospitals eligible for safety net funding. This information will soon be available on our website. In the meantime if you have any questions on these estimates, please contact Fred Fisher at 888.514.9312, fred.fisher@toyonassociates.com.  
 
Toyon is committed to apprising providers with important reimbursement updates and will keep you updated with the latest on UC DSH and COVID-19 funding and documentation. Please feel free to visit Toyon’s COVID-19 Resources for updates on hospital funding estimates, and recommendations on documenting cost and revenue losses associated with this public health emergency. Toyon’s website provides information on how to contact Toyon’s team members.  
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CARES Act Funding Attestation – Action Required

Providers receiving relief payments from the CARES Act funding are required to confirm receipt and agree to the terms and conditions within 30 days of payment. Providers are to submit their attestation using the CARES Act Provider Relief Fund Payment Attestation Portal, available here.

Providers have 30 days to attest after receipt of CARES Act funding and will need to provide the following information:

  • Billing Tax ID Number(s).
  • Last six digits of deposit bank account number.
  • Amount of relief payment..

Per HHS’s terms and conditions, these are the significant items:

  • Submit a report within 10 days after each calendar quarter regarding the use of the funds (details of the report have not been released).
  • Agree to not balance bill any patient for out-of-network services (i.e., the amount above if in-network) during the public health emergency period.

The third and fourth terms of HHS’s terms and conditions state:

The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus. The Recipient certifies that it will not use the Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.”

Toyon’s Take
While relief funding will not likely make healthcare providers whole for the losses attributed to the impact of COVID-19, it is recommended providers identify and delineate items reimbursed in current and future legislation during the emergency period. Some examples include: 

  • Payroll Protection Program
  • FEMA assistance
  • Any additional funds for unreimbursed COVID-19 expenses
  • Reimbursement for the uninsured (i.e., Medicare DSH Uncompensated Care)

Please contact Robert Howey at robert.howey@toyonassociates.com or 888.514.9312 with any questions.

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Uncompensated Care Recognition Services Medicare DSH Update April 2020

Toyon’s Uncompensated Care Recognition Services (UCRS) is pleased to provide this update on Medicare Uncompensated Care (UC) DSH.  For more information, Please contact Fred Fisher at 888.514.9312, fred.fisher@toyonassociates.com.

In this Update:

  1. 2018 S-10 Audits
    – CMS is auditing FFY 2018 UC costs for all DSH hospitals
    – Initial data requests:
    • May 15 deadline for hospitals in receipt of audit letters
    • Remaining audit letters to be sent out week of May 18
  2. FAP Updates
    – Discovery of charity while accounts are in bad debt
    – Insured patients not under contract with the hospital
    – Access to Healthcare Crisis
  3. Current S-10 Reporting
    – Annual amendments a new standard when filing UC costs
    – Annual consistency with charity care and bad debt write-offs for
      payment predictability

1. FFY 2018 Worksheet S-10 Audits

MACs will be auditing every DSH hospital’s UC listing for FFY 2018 (i.e., FYE 12/31/2018, 6/30/2019).  Due to the COVID-19 crisis, audit deadlines are fluid.  All hospitals currently in receipt of 2018 audit requests, are eligible to receive deadline extensions until May 15.  All other DSH hospitals should anticipate receiving an audit notification the week of May 18.

Action Requested – COVID-19 Challenges

Please feel free to provide Toyon any information related to delays and/or the inability to produce information during these audits due to COVID-19.  For instance, hospital personnel being on-site to pull large patient data files, charity care applications / approvals, etc.  This also includes the delays due to hospital personnel working from home and/or prioritization of other work related to COVID-19.   Please send any comments to Fred Fisher (contact information listed above).


2.  Financial Assistance Policy (FAP) Updates

Hospitals may only report UC amounts on worksheet S-10 of the Medicare cost report if the discounts are specified in the FAP.  As recent in the FFY 2020 IPPS Final Rule, CMS states:

“In Transmittal 10, we clarified that hospitals may include discounts given to uninsured patients who meet the hospital’s charity care criteria in effect for that cost reporting period …As a result, nothing prohibits a hospital from considering a patient’s insurance status as a criterion in its charity care policy. A hospital determines its own financial criteria as part of its charity care policy.”

A hospital’s determination of its own financial criteria thereby provides hospitals discretion on how patient financial discounts are articulated in the FAP.   Whereas traditional FAPs are in plain language as public facing documents, the complex nature of cost reporting instructions now warrants the need for hospitals to craft policy disclosures related to the accounting of patient financial discounts.  In this respect, Toyon has prepared template FAP language concerning emerging categories of UC cost.   Any language ultimately adopted by providers should follow the approval procedure with hospital leadership / board of directors.

FAP – Discovery of Patient Financial Assistance Eligibility During Collections

Changes in revenue reduction under ASC Topic 606, may result in hospitals discovering additional charity care associated with patient accounts in collections.   Typically, outstanding patient receivables relate to coinsurance, copayment and deducible (C+D) amounts.  This is a significant population, considering when C+D are reported as charity care, these amounts are not reduced by the cost to charge ratio.  

Example FAP language may stateIn certain cases, further investigation is required to determine eligibility for patient financial assistance.  If it is discovered a patient may qualify for a financial discount, and the patient’s balance is in billing/collections, the patient’s account will be returned from billing/collections.  If it is determined the account is eligible for financial assistance, [provider] will reverse the account out of bad debt and document the associated charges as a patient financial discount. 

FAP – Patients with Insurance Not Under Contract with Providers

CMS permits hospitals can include charges related to insured patients that do have a contractual relationship with the hospital.  CMS states hospitals may report the following as uncompensated care:

“portion of the total charges, written off to charity care, for uninsured patients, and patients with coverage from an entity that does not have a contractual relationship with the provider who meet the hospital’s charity care policy or FAP.”   

It is important to note CMS does not prescribe any further instruction or guidance on 1) when it is determined a payer is “under contract” nor 2) an industry standard for the determination of charges written-off as charity care for this category of patients. 

Example FAP language may state Negotiations with insurance carriers involving single case agreements for insured patients not under contract with [provider] will be conducted by leadership or representation of [provider]. Although [provider] may agree to the terms of the negotiations with insurance companies, a single case agreement is not representative of a patient “under contract” with [provider]. All unreimbursed amounts are a form of patient financial assistance and determined as the difference between gross hospital charges and hospital reimbursement.

FAP – Access to Healthcare Crisis

As the healthcare industry encounters COVID-19, providers may experience high volumes of care to the most critically vulnerable population of underinsured and uninsured patients.  CMS only recognizes, and reimburses, for this charity if it is articulated in the FAP. 

Example FAP language may state An Access to Healthcare Crisis must be proclaimed by [hospital leadership / approved by the board of directors] and attached to this patient financial assistance document as an addendum.  An Access to Healthcare Crisis may be related to an emergent situation whereby state / federal regulations are modified to meet the immediate healthcare needs of the hospital’s community during the Access to Healthcare Crisis.  During an Access to Healthcare Crisis [provider] may “flex” its patient financial assistance policy to meet the needs of the community in crisis.  These changes will be included in the patient financial assistance policy included as an addendum.  Patient discounts related to an Access to Healthcare Crisis may be provided at the time of the crisis, regardless of the date of this policy (as hospital leadership may not be able to react quickly enough to update policy language in order to meet more pressing needs during the Access to Healthcare Crisis). 


3. Current S-10 Reporting

Toyon recommends an annual evaluation is conducted each year to determine if an amended worksheet S-10 UC DSH listing is necessary.  Through our experience with UC DSH audits, it is common to “refresh” and update the UC DSH listing after the cost report is filed, five months after the close of a hospital’s fiscal year.  This is analogous to the process of reporting Medicare bad debts and the empirical DSH.

This annual evaluation and update is not to determine or reassess the charity and non-covered Medicaid write-offs that fall within the fiscal year, but rather to redetermine insurance coverage on charity and non-covered Medicaid claims.  These determinations are important as they may impact:

·   Charity care related to coinsurance, copayments and deductibles (C+D).  These costs are reported on Worksheet S-10, Line 20 Column 2 (an important population to correctly identify, as these amounts are not reduced by a hospital’s cost to charge ratio); and

·        The amount of non-covered/denied Medicaid charges reported with uninsured charity care on Worksheet S-10, Line 20, Column 1.

Charity care related to coinsurance, copayments and deductibles (C+D)

A significant step reporting UC DSH listing is to identify amounts related to charity C+D; these amounts are not reduced by the cost to charge ratio.  Importantly, there is no industry standard on how these amounts are determined.  CMS’ auditors review these amounts using an audit template inclusive of fields for hospital teams to populate for “insured” patients vs. “uninsured” patients.   The process of obtaining insurance may take up to a year.   Please consider:

·        At the time of filing the UC DSH listing, five months after the fiscal year end, it may be determined certain patients were “uninsured”, therefore the amount written-off during the year is reported as charity on Worksheet S-0 Line 20, Column 1. This write-off amount is reduced by the cost to charge ratio. 

·        The determination of “uninsured” may be driven by the presence of certain transactional data, like an insurance payment. 

·        When certain patients subsequently obtain insurance, the hospital will have more accurate data (i.e., an insurance payment), five months after the cost report is filed.

·        An amended UC DSH listing thereby allows accurate reporting of these charity care write-offs as “insured” to Worksheet Line 20, Column 2.  This write-off amount is not reduced by the cost to charge ratio.  

Toyon has experienced hospitals identifying larger amounts of charity to report as C+D by refreshing insurance status a year after filing the cost report.   If CMS’s expectation is for hospitals to “smooth” this occurrence using a year over year adjustment, there is no industry standard.  Moreover, any year over year smoothing efforts may be complex as they involve amounts reported as “uninsured” on Worksheet S-10 Line 20, Column 1 vs. “insured” on Worksheet Line 20, Column 2. 

Non-Covered/Denied Medicaid Charges

The assessment of reporting non-covered/denied Medicaid accounts is an important part of Toyon’s annual evaluation to determine if an amended UC DSH listing is necessary.  In many cases, identifying the charge write-off for non-covered Medicaid goes beyond the reported patient transaction amount.  For instance, consider:

·        The transaction amount may not always represent the charge write-off, instead it may represent the payment not received from Medicaid.  Therefore, in some cases (i.e., when there is no Medicaid payment), it is more accurate to report total hospital charges as opposed to the transaction amount.

·        There is no industry standard on how hospitals account for non-covered and denied Medicaid transactions.  In circumstances when non-covered Medicaid accounts are written-off and reversed in transaction detail, this occurrence creates annual reporting anomalies when considering the reporting of total hospital charges vs. transaction amounts (year over year).

·        Medicaid coverage and operations are state-specific, impacting the time it takes to processes Medicaid coverage/payments.

At the time of filing the UC DSH listing, five months after the fiscal year end, it may appear there is no Medicaid payment, and therefore a hospital may report the entire hospital charge as “uninsured” charity on Worksheet S-10, Line 20 Column 1.   However, Medicaid may eventually make a payment, thereby making it improper to report the entire hospital charge.  In other occasions, Medicaid may recoup payment, and it would be proper to report the entire hospital charge. 

Toyon also recommends providers assess annual UC reporting for year over year consistency.   CMS’s use of a single base year for UC funding may cause large variations in annual DSH funding.  As hospital teams look for more predictability in annual payments, hospital teams may consider smoothing the timing of charity and bad debt write-offs so there is mitigated variation in UC cost from year to year (aside from other market conditions). 


Toyon is committed to apprising providers with important reimbursement updates.  Please contact Fred Fisher at 888.514.9312 or fred.fisher@toyonassociates.com if you have any questions. 

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