Front Page DHLF News

Dear CEOs and CFOs of district/municipal hospitals:

We wanted to take this opportunity to let you all know of the terrific work being done by the PRIME teams at your hospitals.  In October, I provided an update to DHCS and many other Medi-Cal stakeholders based on your DY 12 year end reports.  All districts have done great work in putting in place the infrastructure to begin the pay-for-performance component of the program currently underway.  

 

 

Front Page – About DHLF

The District Hospital Leadership Forum (DHLF) represents California’s district and municipal hospitals. DHLF originated from the efforts of a number of public district hospital executive teams in an effort to address financial issues of importance related to public district and municipal hospitals.

Front Page – DHLF Initiatives

DHLF members are focused on putting together transformation plans as part of their participation in the Public Hospital Redesign and Incentives in Medi-Cal (PRIME) Program, which is part of Medi-Cal 2020, the state’s 1115 waiver, which was approved December 31, 2015. Further information on this program and the waiver in general are included here.

 

January 2013 Recap of DHLF Activities

Happy New Year!

Following is a summary of the issues the DHLF has been focusing on since our last monthly recap. As outlined below, most activities have been (and will continue to be) focused on the 2012-13 state budget which changed Medi-Cal inpatient fee-for-service reimbursement for District and Municipal hospitals, effective July 1, 2012. Additionally, we have been working with members on the 2013-14 proposed state budget, specifically the reductions to hospital distinct-part nursing facilities (DP/NF).

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

Current and Ongoing Activities

The Department of Health Care Services (DHCS) is (still) awaiting approval (from the Centers for Medicare and Medicaid Services – CMS) on all components of the 2012-13 state budget proposal to transition non-designated public hospitals (NDPHs) to using certified public expenditures (CPE). The transition is for Medi-Cal fee-for-service inpatient services and will be coupled with receiving waiver funding (for uncompensated care costs and delivery system improvements). CMS has indicated to DHCS that approval on the concept is imminent with approval of the program details to come soon thereafter.

Delivery System Reform Incentive Payments (DSRIP)

DHLF staff and hospital representatives are meeting weekly with DHCS on this subject although due to the pending CMS approval, most activities are slowed. Hospitals should have already submitted plans for categories 1 and 2; if you have not yet submitted that component of your plan, please do so as soon as possible.

Plans for category 4 (2 projects) were due earlier in January, however many district/municipal hospitals ran into an issue due to low (or no) numbers in the patient safety projects outlined and/or already have achieved improvements that land them in the top quartile. DHCS changed a previously-stated position that a starting point in the top quartile would be approved by CMS (previously DHCS and district/municipal hospitals were moving forward with the belief that maintaining the results in patient safety categories would be appropriate).

The next step to address this issue is a technical assistance conference call with DHCS and the hospitals. Scheduling the call will be done when DHCS has more feedback from CMS. Unfortunately, until then many hospitals are in a “wait and see” mode on completing plans for category 4. However, if you are able to complete a category 4 plan, please do so for submission (through the DHLF) to DHCS.

Uncompensated Care

DHCS has been revising the certified public expenditure (CPE) reporting form and met with DHLF staff recently to review the components (still in draft form). Many questions were raised in the meeting (both from Forum staff and DHCS staff). Once some of the questions are answered and the form is further revised, a few district/municipal hospitals will be asked to test it. Most of the data used to complete the form is obtained from a hospital’s cost report (and the form will be submitted twice – once using filed cost reports and then again with revised audited cost reports).

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

Waiver Funding Allocation

The DHLF Board met earlier this month and approved the slightly revised (by DHCS) waiver funding (both uncompensated care and DSRIP) allocation. DHCS attempted to craft a formula that would be approved by CMS while maintaining the DHLF Board-approved principles. Those principles are: year 1 – all district/municipal hospitals see the same reduction; year 2 – more overall funding is available and a bump should be provided to rurals and CMAC-contracting hospitals; and year 3 – all hospitals will achieve the same level of cost reimbursement (approximately 98 percent based on current estimates).

A spreadsheet with the revised allocation estimates was provided to the DHLF membership January 25. For the allocation to work, it is to the advantage of all hospitals to accurately capture all costs related to the uninsured (for the uncompensated care pool) and to complete a DSRIP plan and then to meet all requirements, including reporting, related to the plan.

2013-14 State Budget

DP/NF Medi-Cal Rate Reduction

As reported in mid-December, the 9th Circuit Court of Appeals upheld the Medi-Cal rate reductions included in 2011’s AB 97. These include 10 percent reductions to many providers (physicians, pharmacy, etc.), but also include onerous reductions to hospital DP/NFs. Due to the methodology included in AB 97 (reducing 2008 rates by 10 percent), the ultimate reduction for DP/NFs is closer to 20 to 30 percent. Additionally, these new reduced rates are frozen in perpetuity – there are no plans for updates as occurred previously.

The proposed state budget for 2013-14 assumed the savings from the AB 97 reductions ($488 million for all providers; approximately $50 – $100 million for DP/NFs).

There currently are three avenues at work to oppose this reduction: the plaintiffs in the court case 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 (a copy of the plaintiffs’ press release is attached).  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 (at least while some of the legal proceedings are pending). Finally, legislation will be introduced to unravel this reduction.

While all of us in the hospital advocacy world are continuing to advocate with the Administration, they have indicated they plan to move forward with implementation as soon as June (including the retroactive recoupment; although legal proceedings could delay this by another six months). CHA has implemented a grassroots advocacy campaign requesting hospitals with DP/NFs 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.

Regarding the legislative avenue, it is important for all hospitals operating a DP/NF to contact their state Assembly Member and Senator right away to let them know how devastating this reduction is and to tell the specific hospital story of what the reduction will mean to the community.

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.

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.

DHCS has been working with Forum staff on this program to ensure district hospitals are able to use CPEs for the recouped amounts (and prospectively). There is a 2-year claiming deadline for the CPEs, so an estimate will be prepared by DHCS (based on input from hospitals and Forum staff) so they can submit the claim. The claim will then be amended to reflect actual costs and what was ultimately paid. More information on the estimated claim will be provided in the next few days.

Forum staff has secured a meeting with Health and Human Services Secretary Diana Dooley on February 27 (the DHLF Legislative Day) to discuss this issue and the following budget item. A few district hospital representatives will be asked to represent the Forum (along with staff) in the meeting with the Secretary. DHLF staff will ask for representatives from the hospitals that are most significantly impacted by the DP/NF reduction.

Health Care Reform Implementation

The 2013-14 state budget indicated that the expansion of Medi-Cal as part of the federal health care reform could be done via the state or locally via counties. Several DHLF members (and other private hospitals) have expressed concern that implementation via the counties could disadvantage non-county hospitals while adding administrative burden to providers and counties alike (58 sets of procedures rather than 1). Additionally, the not-always-smooth experience of the district hospitals in working with counties on the Low Income Health Program (LIHP) only heightens the concern with the responsibility for health care reform being implemented locally.

The Forum is expressing this concern in our advocacy messages on the proposed budget and is participating in the stakeholder process to explore the options.

Hospital Provider Fee

The current hospital provider fee sunsets in December 2013. CHA is putting together a new two-year fee program that likely will be similar to the current fee. However, the 2013-14 state budget proposes the state continue the increased rake-off of funds from the fee that they initiated in 2012-13. This will be a point of negotiation between CHA and the Administration as the 2014-15 fee proposal is drafted. Additionally, the hospital community is planning a 2014 ballot measure which will protect the fee from future rake-offs. More information on the 2014 fee and ballot measure will be provided as details are available. The DHLF will advocate continued participation in the fee program through direct grants.

Hospital Charges

As previously reported, CHA has convened a group of CFOs and other interested parties (including the DHLF) to consider options to improve or replace the current hospital billing/charging system. This is driven by two primary goals, the first of which is to find a solution to proactively mitigate near-term and future efforts by others to mandate unreasonable and unsustainable pricing policies on hospitals. The second is to improve the public’s perception about hospital bills and pricing.

At the most recent workgroup meeting earlier in January, a number of legal questions raised by the group were discussed with Lloyd Bookman of Hooper Lundy and Bookman. Subgroups will be meeting over the next couple of weeks to address issues specific to critical access hospitals and business office issues.

More information will be provided and addressed via the DHLF charges workgroup.

DHLF Calendar

Upcoming DHLF Board Events:

  • February 27 – DHLF Legislative Day, Sacramento
  • March 12 – DHLF Board Meeting, Sacramento
  • July 11 – DHLF Board Meeting and tour of 2 district hospitals, Carlsbad

If you have not yet RSVP’d for the Legislative Day or March Board meeting, please do so.

DHLF Staff Activities

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

  • Hospital Charges Workgroup (with member hospitals)
  • CAH Charges Subgroup
  • CHA Board Meeting,
  • DHCS DSRIP Workgroup (with member hospitals), weekly
  • DHCS CPE Reporting
  • Health & Human Services – Health Care Reform Stakeholder Group

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

2013 Legislation

As bills currently are being introduced, a more complete 2013 legislative report will be included in next month’s recap.

November Recap of DHLF Activities

Following is a summary of the issues the DHLF has been focusing on since our last monthly recap. As outlined below, most activities have been (and will continue to be) focused on the 2012-13 state budget which changed Medi-Cal inpatient fee-for-service reimbursement for District and Municipal hospitals, effective July 1, 2012.

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

Current and Ongoing Activities
The Department of Health Care Services (DHCS) is (still) awaiting approval (from the Centers for Medicare and Medicaid Services – CMS) on all components of the 2012-13 state budget proposal to transition non-designated public hospitals (NDPHs) to using certified public expenditures (CPE) for Medi-Cal fee-for-service inpatient services coupled with receiving waiver funding (for uncompensated care costs and delivery system improvements). The CMS approvals are pending the review of proposed NDPH Waiver Amendment documents and additionally, proposals specific to Attachment Q (related to the Delivery System Reform Incentive Program). Some documents were submitted to CMS in June and to date there has been back-and-forth questions and answers between the two entities.

Delivery System Reform Incentive Payments (DSRIP)
DHLF staff and hospital representatives are meeting weekly with DHCS on this subject. Currently, DHCS is in the process of reviewing each individual hospital plan for categories 1 & 2. In their review, they are checking for correct formatting, proper grammatical editing, coherency, plan completeness and overall plan ambition. To date, 32 hospital plans and 3 extension requests have been submitted to DHCS. If your plan has not yet been submitted, please contact DHLF staff as soon as possible.

All NDPHs will be required to submit a 3-year DSRIP plan for categories 1, 2 and 4 (category 1 – infrastructure; category 2 – innovation and redesign; category 4 – patient safety). Plans for categories 1 and 2 already should have been submitted (as noted above) and category 4 (two projects for this category) will be due to DHCS by January 4 (although due to the holidays, DHLF staff is advocating for an extension of this date by a week). DHCS is proposing that district/municipal hospitals NOT complete a project in category 3 as those facilities without rural health clinics likely would find it difficult to identify projects in this category (population-focused improvement).

Detailed information on DSRIP requirements has been provided to all NDPHs previously through ongoing emails, conference calls and these monthly updates.

If you or staff within your hospital are interested in participating in the DHLF DSRIP workgroup, please respond to this email expressing your interest.

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

Hospital Provider Fee

Installments of direct grants to all NDPHs contained in the 30-month hospital provider fee (the term of the fee is July 1, 2011 through December 31, 2013) are being distributed to hospitals on a periodic basis. Subsequent installments will continue (approximately 10 installments in total) over the term of the fee.

Hospital Charges

The California Hospital Association (CHA) has convened a group of CFOs and other interested parties (including DHLF and other hospital constituency group staff) to consider options to improve or replace the current hospital billing/charging system. This is driven by two primary goals, the first of which is to find a solution to proactively mitigate near-term and future efforts by others to mandate unreasonable and unsustainable pricing policies on hospitals. The second is to improve the public’s perception about hospital bills and pricing. Duane Dauner, president of CHA, met with members of the DHLF in November to outline the project and listen to members’ concerns.

DHLF staff has convened a workgroup of district/municipal hospital CFOs to provide input to CHA’s workgroup to ensure NDPHs are not disadvantaged by proposals that result from CHA’s work in this area. Updates of both the CHA and DHLF workgroups on this subject will be provided as information becomes available. The CHA Board will consider this issue and next steps at its December 20 meeting.

California Health Benefit Exchange

The California Health Benefit Exchange (now known as Covered California) plans to enroll about 2 million new people in Medi-Cal, and help an additional 2 million Californians buy private coverage with federal subsidies.

In January 2013, bids from health issuers proposing to sell Qualified Health Plans through Covered California will be due so currently health insurers are beginning efforts to assemble networks of medical providers, negotiate rates and design various health plans to comply with benefits in the exchange. This is being done prior to Covered California’s negotiations with the more than 30 health insurers (which have provided an intent to bid) on coverage and pricing in 19 separate regions of the state. Policies through Covered California take effect in January 2014, when most Americans face the requirement to buy health insurance or pay a penalty. We will keep you apprised of Covered California’s activities in future updates. Exchange activities will be the subject of several pieces of legislation in 2013.

Upcoming DHLF Board Events:

  • February 27 – DHLF Legislative Day, Sacramento
  • March 12 – DHLF Board Meeting, Sacramento

(Additional 2013 Board meeting dates as well as our annual education session will be determined and provided to you soon.)

DHLF Staff Activities

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

California Association of Public Hospitals Annual Meeting, December 5-7
CHA Hospital Charges Workgroup (with member hospitals), December 12
Covered California Board Meeting, December 18
CHA Board Meeting, December 20
DHCS DSRIP Workgroup (with member hospitals), weekly

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

We want to take this opportunity to wish you all a healthy and happy holiday season. We have enjoyed working with you in this challenging year and look forward to facing new and continuing challenges together in 2013!