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From Health Law Daily, July 7, 2017

SSI-matching methodology dispute remanded to PRRB

By Robert B. Barnett Jr., J.D.

In a challenge by a group of hospitals to their Medicare administrative contractors’ (MACs’) adjustments to the numerator in the fraction used to determine their eligibility and the amount of reimbursement for disproportionate share hospital (DSH) payments for fiscal years 2006-2009, the CMS Administrator vacated two Provider Reimbursement Review Board (PRRB) decisions, finding that the PRRB had jurisdiction to hold a hearing but no authority to revise the DSH calculations. In remanding the cases to the PRRB, the Administrator ordered the PRRB to determine which of the following actions was most appropriate: (1) send eligible cost years to the MACs for DSH calculations consistent with a 2010 CMS ruling on the issue; (2) determine whether a final determination has already been made by the MACs; or (3) determine whether each provider has a properly pending appeal (Hall Render Optional and CIRP DSH Dual SSI Eligible Group Appeals—Medicare Fraction v. Medicare Administrative Contractors, Review of PRRB Dec. Nos. 2017-D11 and 2017-D12, May 30, 2017).

Background. CMS uses a fraction to determine whether a provider is entitled to DSH payments under Medicare and the amount of the reimbursement. The numerator is the number of each hospital’s acute care inpatient days that were made up of patients entitled both to benefits under Medicare Part A and benefits under SSI, while the denominator is the number of acute care inpatient days that are furnished to patients who are entitled to Medicare Part A. When the DSH adjustments were first introduced, the principal source for calculating the Medicare Part A number was the Medicare Provider Analysis and Review data. CMS also calculated the SSI fraction based on information from the SSA. In Baystate Medical Center v. Leavitt (D.D.C. 2008), as amended, a federal district court ruled that CMS was not using the best available data in matching Medicare and SSI eligibility data. In response, CMS issued Ruling 1498-R, which changed CMS’ data-matching process. The new process, which was published in a 2010 Final rule (76 FR 51476), relied on three SSI codes to match the data.

Case history. The essence of the dispute is the definition of "entitled." The courts and CMS have said that "entitled" under Medicare Part A is different from "entitled" under SSI because Medicare eligibility is automatic and permanent (once a person reaches age 65, he or she will always be at least age 65) while SSI eligibility can change (a person’s greater access to resources, for example, could cause the person to no longer be eligible for SSI benefits). Thus, under the courts’ and CMS’ interpretation, the "patients entitled to benefits under Medicare Part A’ in the numerator consists of all Medicare beneficiaries, regardless whether they received benefits, while the "patients entitled to benefits under SSI" in the numerator consists only of those patients who actually received SSI benefits for that month. The use of the three SSI codes was intended to reflect that fact.

The hospitals, however, argued that "entitled" should be the same for both categories, consisting of anyone who is eligible, regardless whether they actually received benefits. Consequently, they argued for the use of a larger number of codes. They believed that a reduction in the number of those "eligible" for both Medicare Part A and SSI in the numerator would reduce their eligibility for DSH payments and lower the amounts that they were entitled to receive. When the hospitals submitted their reimbursement claims in this case, the MACs altered their calculations in line with CMS’ rules. When that occurred, the hospitals appealed the MACs’ determination to the PRRB. In the first ruling before the PRRB (see Board lacks authority to mandate revisions to DSH data matching process, April 28, 2017), the PRRB ruled that it lacked the authority to mandate specific revisions to the CMS data-matching process. In a second ruling (see PRRB lacks jurisdiction to determine accuracy of reimbursement calculations, May 11, 2017), the PRRB ruled that the data-matching process fell not within the CMS’ jurisdiction, over which it had no authority. The hospitals appealed the now-consolidated rulings to the CMS Administrator.

Comments. On appeal, the hospitals, of course, wanted a different SSI matching calculation. CMS, however, also filed comments, expressing concern that the PRRB decisions were too inconclusive to be reviewed by a court. As a result, it urged the Administrator to issue a definitive, final decision, to give a court something to review rather than have the court simply remand the dispute to the agency for further action. In particular, CMS was concerned that PRRB jurisdiction should not be based on the prospect that the MACs will use the SSI matching calculation, without the calculation actually having been applied (three of the hospitals had not received final recalculations). The PRRB jurisdiction, it argued, must be based on an actual use of the calculation and a final determination.

SSI matching calculation. The Administrator agreed that "entitled" had different meanings for purposes of Medicare Part A and for SSI. She also agreed with the logic of limiting the SSI matching calculation to the three codes. The jurisdictional questions raised by CMS were not so easily resolved. The Administrator, agreeing with CMS’ arguments, noted that the PRRB could not review calculations that were prospective or that were slated to occur. Therefore, the Administrator ruled that the PRRB decisions were vacated and that the PRRB had jurisdiction to conduct a hearing on cost years for which the Notice of Program Reimbursement under appeal was before April 28, 2010. For those cost years, the Administrator said, the PRRB should determine which of the following actions is appropriate: (1) remand the eligible cost years to the MACs for calculations consistent with CMS-1498-R; (2) consider further documentation to determine whether a final determination has already been issued that is consistent with CMS-1498-R; or (3) consider further documentation whether the issue was "timely added with sufficient specificity" and whether the provider has a properly pending appeal.

Cost reporting periods ending various.

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