In a letter to the Centers for Medicare & Medicaid Services, the National Association of Urban Hospitals has offered extensive comments on why the Medicare cost report’s S-10 worksheet is not an appropriate tool to use when calculating hospital Medicare disproportionate share (Medicare DSH) uncompensated care payments.

In support of this view and in response to the publication of CMS’s draft inpatient prospective payment system regulation detailing how it envisions paying acute-care hospitals in FY 2018, NAUH took advantage of the formal stakeholder comment period to offer documentation, including examples, of the shortcomings of the S-10.  In the letter, NAUH also commented on proposed changes in Medicare’s hospital readmission reduction program, hospital inpatient rates, the Medicare area wage index system, and quality reporting and advocated the preservation of states’ ability to make supplemental payments to hospitals through Medicaid managed care providers.

This week NAUH presents excerpts from this letter.  The schedule for this week is as follows:

  • Tuesday– Medicare DSH uncompensated care payments and the S-10
  • today – the Medicare hospital readmissions reduction program
  • Thursday – Medicare inpatient rates, the area wage index, and quality reporting
  • Friday – the preservation of states’ ability to make supplemental payments to hospitals through Medicaid managed care organizations

The Hospital Readmission Reduction Program

NAUH is pleased that CMS proposes adding risk adjustment to the Medicare hospital readmissions reduction program by assessing future penalties based on a given hospital’s performance in comparison to that of similar hospitals rather than in comparison to all hospitals, as the program currently does.  NAUH has called for such risk adjustment ever since the program was introduced, maintaining that certain hospitals – in our case, private, non-profit urban safety-net hospitals – face a degree of challenge in serving their patients that most hospitals do not and that judging all hospitals similarly was therefore unfair.

While NAUH supports this change in philosophy for the readmissions reduction program, we would like to know more about how this change would be implemented before commenting specifically on what CMS is proposing.  To do so, we request access to the data CMS proposes employing to determine how many dually eligible patients hospitals serve; an opportunity to thoroughly evaluate the different methodologies CMS has advanced for creating the peer groups to which individual hospitals would be assigned; and the specific formula CMS proposes using to adjust payments to hospitals.  Once NAUH has sufficient information about this data and the proposed methodologies we will be in a position to model the proposal for ourselves, test its projected impact on private, non-profit urban safety-net hospitals and other hospitals, and offer more detailed and specific comments on the proposal.

See the full letter here.