April Recap of DHLF Activities

Following is a summary of the issues on which the DHLF has been focusing recently.  This newsletter, as well as additional information and resources related to Forum activities, is available on our website – www. cadhlf.org.

DHLF April Board Meeting

The DHLF Board/members met April 16 and 17 in Sacramento.  The agenda included presentations from Ponder & Co. regarding capital access and strategic project assessment.  DHLF members, Alameda Hospital and El Centro Regional Medical Center, currently considering various options also provided their perspective.  Members were reminded of the importance of grassroots advocacy and encouraged to invite both state and federal representatives to tour individual hospitals.  CHA staff provided an updates on their current activities with one presentation focusing on the implementation of health care reform (see below for CHA activities related to the proposed SEIU initiatives).  There was a focus on potential delivery system behavioral health projects and other Waiver activities (more information included below).

AB 113, District Hospital Inpatient Medi-Cal Intergovernmental Transfer (IGT) Program 

The Department of Health Care Services (DHCS) is preparing for implementation of the 2013-14 AB 113 program for district/municipal hospitals. The AB 113 program provides supplemental payments to district/municipal hospitals for fee-for-service Medi-Cal inpatient services.  DHCS plans to distribute payments prior to June 30 (contingent upon CMS approval of the total amount).  Letters were sent to individual hospitals in late April requesting confirmation of planned participation.  DHLF staff has been working with hospitals and DHCS to ensure all eligible hospitals have completed the intent to participate.  If you have not submitted your intent to participate and/or need a copy, please let me know as soon as possible.

2010 1115 Waiver

The DHLF-sponsored 2013 legislation, AB 498 (Chavez) provided funding for district/municipal hospitals.  These federal funds would be accessed via certified public expenditures (CPEs) for care provided to the uninsured.  The funding would be available for the last two years of the current 1115 Waiver, 2012-13 and 2013-14 and provides approximately $25 million in each year for district/municipal hospitals with the state raking off an equal amount.  This will require an amendment to the 2010 Waiver.

When the Waiver amendment was submitted to the Centers for Medicare and Medicaid Services (CMS), the informal initial response from CMS was that their direction is shifting away from funding services (for the uninsured) and to ensuring that delivery system changes are implemented.  Therefore, DHCS and Forum staff have crafted a counter proposal that would include the two years of funding for uncompensated care as outlined above but would add a one year (2014-15) delivery system reform incentive program (DSRIP) for district/municipal hospitals.  The Forum currently is advocating that this DSRIP contain requirements for only one category.  (Designated public hospitals must meet milestones in four separate categories.)  The category likely most appropriate is infrastructure and/or innovation and redesign.  When DHLF members were working with the state in 2012-13 on the DSRIP some of the potential projects in these categories included expanding primary and/or specialty care; improvements in emergency departments; telemedicine, etc.

Forum staff is meeting with DHCS on the potential DSRIP later this week and will provide additional information as it becomes known.  It is likely that we will reinstitute the DSRIP working group to begin meeting with DHCS to craft the program for district/municipal hospitals.

While CMS has provided some feedback, their approval on both components is still required prior to any implementation/funding.

2015 1115 Waiver

An ongoing key component of DHLF advocacy is district/municipal participation in the upcoming Medi-Cal 1115 Waiver.  DHCS recently announced a timeline for the upcoming Waiver:

  • Summer 2014 – Summary of stakeholder and public input and administration review of stakeholder feedback
  • Late Summer 2014 – Concept paper and proposal for stakeholder engagement to submit to CMS
  • Fall 2014 – Begin stakeholder process; process to be determined
  • Spring 2015 – Submission of Waiver renewal to CMS.

As noted above, the Forum is currently engaged with DHCS (and other stakeholders) on the current Waiver) and continues to advance the Forum’s participation in both the 2010 and 2015 Waivers.

2014-2016 Hospital Provider Fee 

Due to the various new complexities in the current 2014-2016 Quality Assurance Fee (QAF), the CMS approval likely will take longer than for prior programs.  CHA is working diligently on approval of the fee-for-service component, but the managed care component (which is how district/municipal hospitals will receive the majority of funding) always takes longer.  Therefore, while QAF funding will be retroactive to January 1, 2014, distribution won’t be done until well into the 2014-15 fiscal year.   We will continue to keep you apprised of activities relating to implementation of the QAF.

A CHA-sponsored initiative will be on the November ballot to protect the funding to hospitals generated by the QAF.

CHA Activities

CHA reported last week that a non-initiative solution was reached in negotiations with SEIU.  If the non-initiative agreement had not been reached, SEIU was prepared to submit signatures for two onerous ballot initiatives: one would cap not-for-profit CEO salary at $450,000/annually; and the other would limit hospital charges to 125 percent of cost.

All California hospitals are grateful to CHA staff and officers for negotiating a compromise that provides a code of conduct among hospitals and SEIU; and includes the outline of advocacy between the two organizations that will improve hospital Medi-Cal funding.  If the new funding component is successful, additional efforts between the two groups regarding organized employees will commence.

State Budget – AB 97 Medi-Cal Reductions 

The governor released the revised 2014-15 state budget (May Revise) today.  Due to a modest surplus (combination of budget cuts, temporary taxes and the recovering economy),  the proposal includes paying down debt, shoring up teacher pensions and further funding for implementation of federal health care reform.

The May Revise builds on the Governor’s January proposal for the establishment of a Rainy Day Fund that allows the state to save for the future while paying down debts and unfunded liabilities. This proposal is expected to go before voters in November.

The May Revise provides $2 billion in added costs from the January budget. This includes higher spending to provide health care coverage under Medi-Cal for a million more people (7.9 million beneficiaries before implementation of health care reform to 11.5 million beneficiaries in 2014-15), emergency drought assistance, added funding for education, caseload increases in the In-Home Supportive Services (IHSS) program, additional contributions to the California Public Employees’ Retirement System (CalPERS) and added staffing to administer California’s unemployment insurance program.

One issue of importance to California’s district/municipal hospitals (and other Medi-Cal providers) is the AB 97 Medi-Cal provider rate reductions.  Unfortunately, the May Revise does not address these reductions, however AB 1805 (Skinner) would roll back all reductions (including the retroactive “clawback” related to hospital-based distinct-part nursing facilities’ rates) and currently is set to be heard in the Assembly Appropriations Committee.  We will keep you apprised of the progress on this legislation.

APR-DRG Implementation

Forum staff has been working with private hospitals and CHA regarding the implementation of APR-DRGs and resulting billing issues.  Some items that are being addressed include:

  1. Medicare/Medi-Cal crossover claims with bill type 121 (Medicare Part B) are being rejected with remittance advice details code 9952 “type of bill code APR-DRG claim invalid or missing.”  (True crossover claims are exempt from DRGs.)

DHCS is aware of this issue and reports a fix will be implemented in mid-June.  Claims that have been denied will be readjudicated through an EPC (erroneous payment correction) process.  Please let me know the impact of this rejection on your facility.  Some hospitals have reported that it is significant and options may be available for working with DHCS for an interim fix.

  1. The claim form can only accept 22 lines of information.  This is causing the second page to reject (and in some cases the second page is actually the first page – the one with the majority of the charges  – based on the order they hit the system).  DHCS is aware of the problem.  Some hospitals are “rolling-up” charges to accommodate the 22 lines but the industry is waiting for a policy determination on that from DHCS.  If you could let me know the impact of this issue on your facility, that would be helpful in our efforts with DHCS.
  2. Mom/baby claims – hospitals are receiving denials when the baby is using the mom’s ID as system sees them as duplicate claims.  DHCS has instructed hospitals to use relationship code 18 (the previous code was 19) and to use the remarks to indicate “baby using mom’s id” to generate a manual review.  This will be addressed in a mid-June bulletin and Medi-Cal newsflash prior to that.

DHCS is planning webinars on June 5 and 19 on APR-DRGs as they plan for the next fiscal year (including new calculators, CCRs, grouper, wage index).  Watch the website for further information and we will keep you apprised.

If you have not yet completed the survey for DHCS regarding utilization management that was emailed to DHLF members April 24, please take a moment to do so.  It will be a tool used by DHCS as they determine utilization management tools under APR-DRGs.

DHLF Calendar

Upcoming DHLF Board/Member Events:

  • August 1, 2014 – Board/Member meeting; San Bernardino Mountains Community Hopsital.