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Tag: DSH

Court Grants Government’s Motion to Remand Part C Cases Post-Allina II

Service Line Contact: 
Karen Kim, Vice President Appeal Services  karen.kim@toyonassociates.com 888.514.9312

 

 

This week, the DC District Court granted the Secretary of Health and Human Services motion for voluntary remand of all cases related to Azar v. Allina Health Services, 139 S. Ct. 1804 (2019) (“Allina II”).

 

 
Details
As you may know, Toyon has been helping Providers in appealing HHS’s decision to arbitrarily include Part C days in the Medicare fraction between 2004 and 2012, on the grounds that only Medicare Part A days should be included in the SSI ratio and that dual eligible Part C days belong in the numerator of the Medicaid ratio.
 
Last year, the Supreme Court in Allina II ruled in favor of our Providers, holding that HHS violated its rulemaking obligations by including Part C days in the Medicare fraction between 2004 and 2012. This court ruling should have resulted in CMS restoring the status quo and reinstating HHS’s prior-to-2004 policy (wherein Part C days were NOT included in the Medicare fraction) and distributing substantial additional DSH reimbursement to Providers.
 
Instead, HHS had requested voluntary remand of the cases to the agency to “re-examine these claims in light of [Allina II] and take further action as necessary to comply with the applicable legal standards announced therein.” Providers opposed remand and pushed the court to instead vacate the agency’s “invalid determinations” and enter judgment “with instructions to promptly pay the hospitals any additional DSH payments due,” pursuant to the Allina I and II decisions.
 
The Court on Tuesday ruled in HHS’s favor, stating that the agency has “already begun further action to address the Allina II decision,” and so the Court thought remand appropriate to allow the agency “to cure its own mistakes.” A copy of the Court’s order can be found here.
 
What this means to you
Unfortunately, the agency’s attempt to “address the Allina II decision” as referenced by the Court was publication of a proposed rule in August 2020 wherein CMS stated it would “adopt the same policy of including Medicare Advantage patient days in the Medicare fraction that was prospectively adopted in the FY 2014 IPPS/LTCH PPS final rule and to apply this policy retroactively to any cost reports that remain open for cost reporting periods starting before October 1, 2013.”
 
Thus, for many reasons, including the delays it would cause, our attorneys fought against the voluntary remand. The agency’s proposed rule and request for remand show that HHS likely plans to leave the problematic policy intact and to refuse correcting the illegal payment determinations for Providers.
 
What now?
Toyon is working with our attorneys (Ropes & Gray) to determine a strategy for next steps. We will provide you with additional updates as this matter unfolds.
 
Please contact Karen S. Kim at (925) 685-9312 or karen.kim@toyonassociates.com if you have any questions or concerns.
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CMS Publishes Rule in apparent response to Allina II Ruling

Last week, CMS published a proposed rule on the treatment of Medicare Advantage (MA) Part C days for discharges prior to October 1, 2013, related to the Medicare DSH calculation.

This proposed rule is purportedly CMS’s long awaited response to the United States Supreme Court’s ruling in Azar v. Allina Health Services, 139 S. Ct. 1804 (2019) (“Allina II”), wherein the Supreme Court upheld a lower court ruling that HHS violated the Medicare Act when it changed its DSH reimbursement formula without providing notice and opportunity for comment. 
 
As you know, HHS arbitrarily began including Part C days in the Medicare fraction through its 2004 Final Rule, and Toyon has been helping Providers in appealing the agency’s actions on the basis that only Medicare Part A days should be included in the SSI ratio and that dual eligible Part C days belong in the numerator of the Medicaid ratio. While the Supreme Court in Allina II did not rule on the merits of Providers’ position, it did rule that HHS violated its rulemaking obligations by including Part C days in the Medicare fraction between 2004 and 2012. This court ruling should have resulted in CMS restoring the status quo and reinstating HHS’ prior-to-2004 policy (wherein Part C days were NOT included in the Medicare fraction). Such actional would have resulted in substantial additional DSH reimbursement to Providers. 
 
What it Means to You
Instead, CMS’s proposed rule, published August 6, 2020, states that CMS proposes to “adopt the same policy of including MA patient days in the Medicare fraction that was prospectively adopted in the FY 2014 IPPS/LTCH PPS final rule and to apply this policy retroactively to any cost reports that remain open for cost reporting periods starting before October 1, 2013.” This proposed rule is tantamount to CMS simply disregarding the Supreme Court Allina II ruling in favor of Providers, as the 2014 Final Rule applies CMS’s same flawed policy of including Part C days in the SSI ratio for FYEs 2004-2012. CMS alleges it has the authority to apply this rule retroactively under the guise that it is in the ”public interest.” 85 Fed. Reg. 47,723; 47,725-56 (Aug. 6, 2020).
 
What now?
Our attorneys (Ropes & Gray) filed a response in the US District Court for the District of Columbia on Friday, objecting to HHS’s proposed rule and requesting the Court entertain further briefing and hearings on HHS’s motion requesting remand of the cases to the agency. A copy of the response is linked here. We will provide you with additional updates as this matter unfolds.
 
Please contact Karen S. Kim at (925) 685-9312 or karen.kim@toyonassociates.com if you have any questions or concerns. 
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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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