Western Michigan HFMA Meeting WPS Medicare Audit Update September 20th, 2016 Paul Hula Chris Severson

Agenda Cost Report Settlements Contractor Update DSH/UCP Wage Index Off Campus Provider Based Units Physician Reimbursement Cost Report Reopenings Low Volume/MDH EHR/HITECH Questions

Cost Report Settlements CMS requirement – for non-audited cost reports, the FI/MAC must complete a Notice of Program Reimbursement (NPR) within 365 days from cost report acceptance. For cost reports with FYE after 12/31/14, contractors have 12 months from the accept date to issue an NPR. Acute and rehab hospitals that use the SSI ratio aren’t subject to these requirements.

Cost Report Settlements In conjunction with the recently published FY2014 SSI ratios on CMS’ website, CR 9648 also gives IPPS hospitals to ability to file amended FY2014 cost reports to revise Worksheet S-10 data. For revisions to be considered, hospitals must submit their amended cost report containing the revised Worksheet S-10 (or a completed Worksheet S-10 if no data had been included on the previously submitted cost report) no later than September 30, 2016.

Cost Report Settlements This instruction applies only to Worksheet S-10 of FY 2014 cost reports for IPPS hospitals; revisions to Worksheet S-10 from other fiscal years, revisions to other worksheets of the FY 2014 cost reports, or revisions to Worksheet S-10 by non-IPPS hospitals are not subject to this instruction. Because providers have been given the option to submit an amended FY2014 cost report, Contractors have been instructed not to issue NPRs for any cost reports that utilize the FY2014 SSI ratio for determining DSH payments.

Cost Report Settlements The holding of cost report settlements is temporary and we are awaiting further instructions from CMS on settlement timelines for these cost reports. Note that although settlements are being held, MACs may continue to work on cost report desk review and audit processes.

Contractor Update In 2010 CMS announced it would consolidate the original 15 A/B MAC jurisdictional contracts into 10 contracts. By 2014, as a result of jurisdictional consolidations, CMS had reduced the number to12. At that time CMS decided to postpone any future consolidations in order to evaluate the impact of further consolidations on the evolving business environment. The two consolidations were J8 and J15, along with J5 and J6.

Contractor Update CMS has recently announced that further jurisdictional consolidation is not in the best interest of the MAC program. Therefore, the current total of 12 A/B MAC jurisdictions will remain in effect. CMS is also extending the maximum length of MAC contracts, inclusive of all option and renewal periods. New MAC contracts beginning on or after 1/1/17 will have a period of performance up to 7 years (previously was 5 years).

Contractor Update In addition, at CMS’ discretion, they may unilaterally renew those 7 year MAC contracts annually for up to 3 more years in instances where the MAC contractors consistently meet or exceed MAC contract performance standards and where contract renewal is in the best interest of the program. To summarize, no further consolidations are expected, and MAC contracts will go from a 5 year period to a maximum of 10 years before the next re-procurement.

DSH/UCP CMS is distributing almost $6 billion in uncompensated care payments in FY 2017, a decrease of approximately $400 million from the FY 2016 amount. For FY 2017, CMS is finalizing a policy of continuing to distribute these funds using a proxy for uncompensated care based on insured low income days, which include inpatient days for patients eligible for Medicaid and inpatient days for patients entitled to Medicare and Supplemental Security Income (SSI). 

DSH/UCP CMS is also finalizing two changes to this methodology.  First, CMS will use data from three cost reporting periods instead of one cost reporting period to limit major fluctuations in uncompensated care payments from year-to-year. Second, CMS will apply a proxy to estimate Medicare SSI inpatient days for Puerto Rico hospitals since residents of Puerto Rico are not eligible for SSI benefits.

DSH/UCP CMS proposed to begin incorporating uncompensated care cost data from Worksheet S-10 of the Medicare cost report in the methodology for distributing these funds starting in FY 2018.  In light of public comment, CMS now intends to engage in future rulemaking and begin to incorporate Worksheet S-10 data into the computation of Factor 3 no later than FY 2021. 

DSH/UCP CMS intends to make certain modifications and clarifications to the cost report instructions for Worksheet S-10. In addition, review protocols will be implemented to use in reviewing Worksheet S-10. 

Wage Index September 2, 2016 – was the deadline for hospitals to request revisions to their Worksheet S-3 wage data and CY 2013 occupational mix data as included in the May 16, 2016 preliminary PUFs and to provide documentation to support the request. MACs have approximately 10 weeks to complete their reviews, make determinations, and transmit revised data to CMS's Division of Acute Care (DAC).

Wage Index November 15, 2016 - deadline for MACs to complete all desk reviews for hospital wage data and transmit revised Worksheet S-3 wage data and occupational mix data to DAC. January 30, 2017 - release of revised FY 2018 wage index and occupational mix files as PUFs on the CMS Web site. These data will have been desk reviewed and verified by the MACs before being published. Also, a file including each urban and rural area's average hourly wages for the FYs 2017 (final) and 2018 (preliminary) wage indexes will be provided on the CMS Web site.

Wage Index February 17, 2017 - deadline for hospitals to submit requests (including supporting documentation) for: 1) corrections to errors in the January PUFs due to CMS or MAC mishandling of the wage index data, or 2) revisions of desk review adjustments to their wage index data as included in the January PUFs (and to provide documentation to support the request). MACs must receive the requests and supporting documentation by this date. No new requests for wage index and occupational mix data revisions will be accepted by the MACs at this point, as it is too late in the process for MACs to handle data that is new in a timely manner.

Wage Index March 24, 2017 - deadline MACs to transmit final revised wage index data to DAC for inclusion in the final wage index. MACs must also send written notification to hospitals regarding the hospitals' February 17, 2017, correction/revision requests by this date.

Wage Index April 5, 2017 - deadline for hospitals to appeal MAC determinations and request CMS' intervention in cases where the hospital disagrees with the MAC's determination. Requests must be received by CMS by this date. A copy of the appeal with complete documentation shall be sent to the MAC. The request must include all correspondence between the hospital and MAC that documents the hospital's attempt to resolve the dispute earlier in the process.

Wage Index April/May 2017 - approximate date proposed rule will be published; includes proposed wage index, which is calculated based on the revised wage index data through the end of February; 60-day public comment period and 45-day withdrawal deadline for hospitals applying for geographic reclassification.

Audit Contact Information Paul Beach, Audit Supervisor, whose team was originally assigned the J8 Michigan providers, recently retired from WPS. Paul’s replacement is Joshua Hagglund. His email is Joshua.Hagglund@wpsic.com and phone number is (402)995-0405. He is located in the Omaha office. Our St. Louis office performs all audits (both regular cost report and HITECH). Manager of the office is Mike Connelly. His email is Mike.Connelly@wpsic.com and phone number is (314)997-6626 ext. 222.

Off-Campus Provider Based Departments- §603 of the Bipartisan Budget Act of 2015 Effective January 1, 2017 items and services furnished at an off-campus hospital department will no longer be paid at OPPS rates unless the department was billing the items and services at OPPS rates prior to November 2, 2015 Instead the items and services will be paid under the Medicare physician fee schedule or Ambulatory surgical center payment systems Eliminates the financial incentive to create new off-campus hospital departments

Off-Campus Provider Based Departments- §603 of the Bipartisan Budget Act of 2015 Doesn’t apply to on-campus hospital departments, off-campus emergency departments, satellite facilities, and provider-based entities such as a rural health clinic Grandfathers off-campus departments that billed under OPPS prior to November 2, 2015 CMS is updating systems to identify off-campus hospital departments and whether those departments have grandfathered status

Critical Access Hospitals – Physician Availability Services in an Emergency Room Need a signed agreement between the hospital and the physician(s) reflecting the allocation of physician time between services provided to individual patients and availability services Allocation agreement must be supported by adequate documentation Two of the most common forms of documentation: 1) ER time logs, 2) physician time study

Critical Access Hospitals – Issues with Physician Availability Services in an Emergency Room No allocation agreement or the agreement is unsigned – required by 42 CFR §415.60 and must be signed by the department head or physician Not all physician compensation is reported on cost report worksheet A-8-2 – either this worksheet hasn’t been completed or only provider component compensation is reported Professional services only includes face to face time with the patient – these services should also include charting and dictation time

Reopenings – DSH Allina Case that went to DC Circuit Court of Appeals– Case remanded back to Administrator Issue – Proposed versus Final Rule methodology of handling Part C days In SSI Ratio or Medicaid Ratio Proposed rule = Include them in Medicaid Ratio Final Rule said = Include them in SSI Ratio Court held that CMS change violated APA, remanded to Administrator Medicare Part C days should not be considered in SSI Ratio and instead should be included in Medicaid Ratio

Reopenings – DSH Allina Currently awaiting final response from CMS on what is going to happen Reopening letters were sent out to all potentially impacted providers. More to come

Reopenings – General http://www.wpsmedicare.com/j5macparta/departments/audit_reimbursement/cost-report-reopening-requests.shtml Per §2931.2, a reopening request determination will be dependent upon whether the following criteria have been met: New and material evidence has been submitted A clear or obvious error has been made The determination has been found to be inconsistent with the law, regulations, and rulings, or general instructions.

Reopenings – General The below situations will result in the denial of a reopening request: A request that is submitted more than three years after the NPR date. A request that is incomplete (does not contain the necessary documentation to support the initial request.) A request for reopening that results in an immaterial revision to the cost report settlement. A request for reopening where an open appeal already exists. The appeal must first be closed before a reopening can be considered. Alert 11 from PRRB Rules A request that does not meet the above criteria for reopening (from §2931.2.)

Reopenings – General Once a reopening request has been denied, such denial cannot be rescinded. A new reopening request can only be submitted if the three year reopening timeframe has not yet expired, and if there is new evidence available that would address the original reason for denial. If a reopening request that has been denied is resubmitted without any additional evidence to address the original denial reasons, the second reopening request will be denied for the same reason.

Low Volume and MDH CR 9197 issued 6/5/15 Implements Medicare Access and CHIP Reauthorization Act of 2015 MDH and Low Volume extended through FFY 2017 MDH facilities do not need to do anything to get extended, provided that they still meet the criteria for MDH Letters have been sent to all facilities Loss of Rural status Low volume facilities automatically extended through 9/30/16 without need for resubmission. Resubmission required again by 9/1/16 Approval letters will be sent out soon to extend through 9/30/17

Audit Topics - EHR/HITECH Currently in Final Year of EHR Incentive 6th year of EHR program CAH EHR participation ended last year Assets must have already been purchased to be eligible Final Year of Acute Care Hospitals

Audit Topics – EHR/HITECH Audit Findings Charity Care – Listings being submitted without all required information requested at audit. Name of patient Dates of service Patient account number Name of health insurer (public or private), Medicare, or uninsured status Total gross charges for the services Charity care charges – see PRM-II, Section 4012, Line 20

Audit Topics – EHR/HITECH Audit Findings Charity Care – Did not separate out patient payments for charity care (S-10 Line 22) Did not separate out insured and uninsured charity care charges on S-10 Line 20 For uninsured, did not include non-contracted insurance plans as required by cost reporting instructions. Uninsured charity care is not being reported as total charges Insured charity care is not being reported as patients deductible and coinsurance

Audit Topics-EHR/HITECH Any registration/attestation questions must go to the EHR Information Center (1-888-734-6433) MACs have no access to any information until after the provider successfully attests. We have limited information on payments We can tell what data we submitted to the contractor and what amount we expect them to pay and approximately when to expect the payment We do not have RAs for any specific dates for the payment We receive a summary listing from CMS approximately one month after payments are made

Audit Topics-EHR/HITECH Website and email information: http://www.wpsmedicare.com/j5macparta/departments/audit_reimbursement/cah-incentive-documentation.shtml (CAH EHR Info) http://www.wpsmedicare.com/j5macparta/departments/audit_reimbursement/_files/cah-incentive-sample.xls (CAH EHR Template to submit) http://www.wpsmedicare.com/j5macparta/departments/audit_reimbursement/acute-cah-ehr-qanda.shtml FAQs

Audit Topics-EHR/HITECH WPS contact for Hospital/CAH EHR (including submission of EHR Payment Requests): audit.advisement@wpsic.com

HIT Cost Report Changes Worksheet E-1 Part II

HIT Cost Report Changes Worksheet A-8

CAH Assets for EHR Incentive From CMS FAQs “The reasonable costs for which a CAH may receive an EHR incentive payment are the reasonable acquisition costs for the purchase of certified EHR technology to which purchase depreciation (excluding interest) would otherwise apply.”

CAH Assets for EHR Incentive Cost of Assets subject to “purchase depreciation” Certified Technology Computer Hardware and Software “necessary to administer” certified technology Capital Leases allowed, but Operating Leases not allowed Interest (capital or otherwise) specifically disallowed by Statute Medical imaging devices (e.g. MRI, CAT Scans, X-Rays) not allowed, regardless of the fact that they feed into the EHR system.

CAH Assets for EHR Incentive Reasonable Implementation Costs Allowed Computer Hardware and Software “necessary to administer” certified technology Must be computer hardware or software Must be “necessary to administer” Subject to judgment and further CMS policy clarifications Examples of non-allowable items HVAC or plumbing for computer room or training room Desks for computers Backup power systems Electrical and infrastructure upgrades Other items that are not computer hardware or software and would normally be depreciated as separate items

CAH Assets for EHR Incentive More examples of non-allowable items End User Training not normally depreciable under GAAP or Medicare Data Conversion (the process) not normally depreciable under GAAP or Medicare Conversion software/hardware allowable Adjustment for percentage of non-EHR use Remaining portion of asset will continue to be depreciated as normal Reasonable allocation methodology Information from vendor Activity reports Storage space comparison Etc.

CAH Assets for EHR Incentive Chains purchasing assets for their components Allowable in each components’ cost report ONLY if cost is directly or functionally allocated to each component through Home Office Cost Report. No Pooled Allocations allowed. (Total costs) (Total patient days may be considered “functional” for this purpose)

CAH Assets for EHR Incentive Additional questions should be emailed to: audit.advisement@wpsic.com Questions need to be in writing for tracking and because further research and potentially communication with CMS may be needed Submissions of asset listings/documentation can be mailed or emailed.

Submission Template

EHR Reopenings For cost reports that were final settled prior to EHR calculation requirements from CMS To include additional approved assets after the cost report has already been settled

Any Questions?