March Recap of DHLF Activities

Following is a summary of the issues the DHLF has been focusing on since our last monthly recap.  This newsletter, as well as additional information and resources related to Forum activities, is available on our newly-launched website – www. cadhlf.org.

 DP/NF Medi-Cal Rate Reduction

 The Forum and its members are providing significant support behind the efforts to rollback the Medi-Cal rate reduction to hospital-based distinct-part nursing facilities (DP/NFs).  This reduction was enacted and effective in 2011, however was enjoined until late 2012.  Barring legal action (outlined below), the Department of Health Care Services (DHCS) has indicated plans to begin implementation (including a recoupment of funding back to the effective date of June 1, 2011) as soon as June 2013. 

 There currently are three avenues at work to oppose this reduction: the plaintiffs in the court case (that initially resulted in the injunction noted above) have requested an en banc review (a review by the entire court; not just the justices that provided the decision). The en banc review was filed January 28.   If the en banc request is not approved (or if the decision isn’t favorable), a request will be made to the U.S. Supreme Court to hear this appeal (not all cases appealed to the US Supreme Court are heard, however).  CHA, the DHLF and other hospital constituencies are requesting the Administration NOT implement the reduction.  Finally, AB 900 (Alejo) has been introduced to unravel this reduction.  DHCS is prohibited from implementing the reductions until the en banc matter is decided, which could go well beyond the planned June 2013 implementation.

 CHA has implemented a grassroots advocacy campaign (fully supported by the DHLF) requesting hospitals with DP/NFs to contact the DHCS Director and the Secretary of California’s Health and Human Services Agency to outline the hospital story.  It is important that all hospitals with a DP/NF participate in this grassroots effort.  Additionally, if you could provide the DHLF a copy of your letter, we will use it in our advocacy in Sacramento. 

 If you need talking points for use with your legislators or information on identifying your representatives, please let Forum staff know and these will be provided to you.

 In conjunction with the above, CHA is conducting a public relations campaign which includes paid and earned media, targeting efforts in some legislative districts, a hospital PR toolkit, etc.  The toolkits should be sent to affected hospitals by mid-April.  A kick-off to this campaign is a press conference on April 10 which will be attended by some affected hospitals and Forum staff.

 DP/NF Supplemental Program for Public Hospitals

 There is a supplemental program that allows public DP/NFs to CPE any unreimbursed costs.  While this program has been in place for several years, many district hospitals were not able to take advantage of it since they were receiving their allowable costs.  The effect of the supplemental is to cut the reductions – both retroactive and prospective — in half for all public hospitals through the receipt of federal funds.  Forum staff has been working with DHCS to ensure hospitals have the necessary tools to take advantage of this program when/if the reductions occur.

 Activities Related to District Hospitals’ Transition to CPEs/Obtaining New Federal Waiver Funding

 Current Status

There continues to be no movement on this issue as the Department of Health Care Services (DHCS) is still awaiting approval (from the Centers for Medicare and Medicaid Services – CMS) on all components of transition for district/municipal hospitals to using CPEs.  District/municipal hospitals have continued to receive Medi-Cal inpatient reimbursement for fee-for-service on an interim basis consistent with their prior payment methodologies, with the exception of the AB 113 program, the intergovernmental transfer program for acute inpatient services (see more below).

 Delivery System Reform Incentive Payments (DSRIP)

Plans for Category 4 of the DSRIP are on hold pending additional information on the issue of determining improvement in patient safety projects for hospitals with a small number of patients.  This issue, as well as the overall concerns related to the timing of the DSRIP program (based on approval delays) has been communicated to DHCS and they plan to communicate those to the Centers for Medicare and Medicaid Services (CMS).

 Uncompensated Care

In addition to the waiver funding available to district hospitals via the DSRIP, there also is federal funding available for care provided to the uninsured.  These funds will be accessed using CPEs and the CPEs likely will be reported quarterly.  Most of the data used to complete the CPE form is obtained from both the hospital’s internal records and their cost report.

 The DHLF will work with DHCS to convene a webinar(s) to discuss requirements related to the reporting of CPEs both for Medi-Cal and the uninsured once DHCS has finalized reporting requirements and once timelines are known.

 Next Steps

The CPE transition/waiver funding was planned for implementation on July 1, 2012.  Originally, DHCS believed there would be CMS approval prior to now and they would have been able to reprocess claims with dates of service back to July 1 as well as ensure waiver funding (the uncompensated care and DSRIP) distribution to hospitals was underway.

 Due to the CMS delays in approval, Forum members have discussed reimplementation of the AB 113 program (IGT program for fee-for-service inpatient) with DHCS.  DHCS may be willing to consider this option, but it will be done in the context of further discussions with CMS regarding the overall transition.  Forum staff will continue to work with DHCS and ensure this opportunity is not lost if the transition to CPEs cannot be implemented in a manner that will allow it to be applicable to the fiscal year. 

 Private hospitals are still slated to move to DRGs for Medi-Cal fee-for-service inpatient services on July 1, 2013.  This transition for private hospitals will not impact district/municipal hospitals unless federal approvals are not obtained for the CPE transition.  DHCS staff has been in communication with CMS on the CPE transition and remains confident federal approvals will be obtained.  (However, it is important to note that without approvals, there is at least some uncertainty around the future reimbursement methodology for district/municipal hospitals.)

 Medi-Cal Managed Care Expansion in Rural Areas

Beginning in June 2013, the Governor’s Budget expands managed care into rural areas that are now fee-for-service (FFS) only.  The expansion of managed care includes the following rural FFS counties: Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt, Imperial, Inyo, Lake, Lassen, Mariposa, Modoc, Mono, Nevada, Placer, Plumas, San Benito, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity Tuolumne and Yuba.  The Partnership Health Plan of California is the plan for Del Norte, Humboldt, Lassen, Modoc, Shasta, Siskiyou and Trinity.  And Anthem Blue Cross and California Health and Wellness Plan have been selected as the plans for the remainder of the counties except Imperial (for which county a health plan has not yet been selected).  (Please note:  The February DHLF Newsletter inadvertently left out the inclusion of California Health and Wellness Plan as a selected plan in the remainder of the counties.)  CMS approval has not yet been obtained on this expansion, which may delay implementation.

 For district/municipal hospitals in these areas, there will be an opportunity to use IGTs in conjunction with plan rates to potentially improve reimbursement.  More information will be provided as details/rates are determined in coming weeks.  DHLF staff has begun meeting with DHCS Medi-Cal managed care and some of the selected plans on this subject. 

DHLF Calendar

Upcoming DHLF Board Events:

  • July 10/July 11 – DHLF Board Meeting and tour of 2 district hospitals, Carlsbad
  • November 13 – DHLF Board Meeting, Sacramento

DHLF Staff Activities

In addition to several ongoing informal meetings, DHLF staff has recently attended or is planning to attend:

 Health & Human Services – Health Care Reform Stakeholder Group

DHCS Medi-Cal Managed Care Expansion to Rural Areas Stakeholder Group

DHCS Medi-Cal Managed Care staff (re rural expansion)

CHA Disproportionate Share Hospital (DSH) Task Force addressing both Medicare and Medi-Cal DSH reductions

ACHD Legislative Day

Please let us know if you’d like additional information or have input on any of these items.

 2013 Legislation

An updated legislative report is attached.  Please let staff know if you have any questions on bills included.  Our highest priority is AB 900, addressing the DP/NF Medi-Cal rate reductions.