CMS Proposes to Use Worksheet S-10 Data in FY 2018 Uncompensated Care Allocation

Included in the proposed rule to update the fiscal year (FY) 2018 inpatient prospective payment system is the Centers for Medicare & Medicaid Services’ (CMS) proposal to begin incorporating Worksheet S-10 data over a three-year period in the distribution methodology of uncompensated care payments beginning in FY 2018. The use of low-income insured days would be phased out by FY 2020.

CMS has developed an audit process to improve Worksheet S-10 data and expects to implement this process during the desk review of the cost reports beginning in FY 2017.

CMS proposes to define uncompensated care costs as the cost of charity care and non-Medicare and non-reimbursable Medicare bad debt as reported on Worksheet S-10, Line 30. For cost reporting periods beginning on or after October 1, 2016, charity care is based on date of write-off rather than date of service.

For the 2018 allocation, CMS is proposing to calculate Factor 3 using each of the following and averaging the three values:

  1. low-income insured days proxy determined using Medicaid days from FY 2012 cost report and FY 2014 SSI ratio
  2. low-income insured days proxy determined using Medicaid days from FY 2013 cost report and FY 2015 SSI ratio
  3. FY 2014 Worksheet S-10 data

Table 18 includes the proposed FY 2018 uncompensated care payment Factor 3 for each provider. Medicare DSH Supplemental Data File includes the data used to calculate Factor 3 and the preliminary uncompensated care payment amounts. These files are located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Proposed-Rule-Home-Page.html.

Hospitals have until June 27 to review the table and supplemental data file and to notify CMS in writing at Section3133DSH@cms.hhs.gov of any inaccuracies. If you would like assistance in reviewing your data, please contact our Albany office at (229) 883-7878 or our Atlanta office at (404) 220-8494.

2017-06-30T12:10:45+00:00 June 8th, 2017|Client Alert|