471 Neb. Admin. Code, ch. 46, § 009

Current through June 17, 2024

Section 471-46-009 - DISPROPORTIONATE SHARE HOSPITALS

A hospital qualifies as a disproportionate share hospital if the hospital meets the definition of a disproportionate share hospital and submits the required information completed, dated and signed as follows with their Medicare cost report:

(A) The names of at two obstetricians who have staff privileges at the hospital and who have agreed to provide obstetric services to individuals who are eligible for Medicaid. This requirement does not apply to a hospital:

(i) The inpatients of which are predominantly individuals under 18 years of age;

(ii) Which does not offer non-emergency obstetric services to the general population as of December 21, 1987; or

(iii) For a hospital located in a rural area, the term obstetrician includes any physician with staff privileges at the hospital to perform non-emergency obstetric procedures;

(B) Only Nebraska hospitals which have a current enrollment with Medicaid will be considered for eligibility as a disproportionate share hospital; and

(C) When notified by the Department that the hospital qualifies as a disproportionate share hospital, each hospital must certify to Medicaid that it has incurred costs for the delivery of uncompensated care which are equal to or exceed the amount of the disproportionate share hospital payment.

009.01DISPROPORTIONATE SHARE ELIGIBILITY CALCULATION. To calculate eligibility, proxy data will be used from each hospital's fiscal year ending in the calendar year preceding the state fiscal year. Eligibility as a disproportionate share hospital will be calculated using the following data.

009.01(A)MEDICAID INPATIENT UTILIZATION RATE. To determine the Medicaid inpatient utilization rate, the denominator will be the total days as reported on the Medicare cost report. The numerator will be the sum of each hospital's Medicaid days, which includes the Medicaid management information system claims file data run 150 days after each hospital's fiscal year end, managed care days, and out-of-state days reported before the federal fiscal year for which the determination is made. Only secondary payor days in the Medicaid management information system claims file data will be included.

009.02(B)LOW INCOME UTILIZATION RATE. To determine the low-income utilization rate, data from the Nebraska accounting system will be used to calculate the low-income utilization rate for state-owned institutions for mental disease. For all other hospitals, the hospital's certified report of total revenue, Medicaid inpatient revenue, cash subsidies, uncompensated care charges, and total inpatient charges minus any disproportionate share payment will be used.

009.02DISPROPORTIONATE SHARE HOSPITAL UPPER PAYMENT LIMIT AND UNCOMPENSATED CARE CALCULATION. The Disproportionate Share Hospital upper payment limit and the uncompensated care calculation is the sum of the Medicaid shortfall plus the cost of uninsured care.

(A) The Department will calculate the Medicaid shortfall as follows:

(i) The Department will determine the costs of Medicaid fee-for-service and managed care inpatient services by:

(1) Calculating a hospital's routine cost per day for each cost center from the Centers for Medicare and Medicaid Services 2552 cost report by dividing the total costs by the total days; and

(2) Multiplying the cost per day times the number of Medicaid allowable days provided during the same fiscal year as the filed cost report, and paid up to 150 days after the end of the fiscal year.

(ii) The Department will determine costs of Medicaid fee-for-service and managed care outpatient services by:

(1) Calculating a hospital's ancillary cost-to-charge ratio from the Centers for Medicare and Medicaid Services 2552 cost report; and

(2) Multiplying the total Medicaid allowable charges times the ancillary cost-to-charge ratio.

(iii) The total Medicaid cost is the sum of the inpatient and outpatient costs for each hospital; and

(iv) The Medicaid shortfall is determined by subtracting the total allowable Medicaid payments from the total Medicaid cost.

(B) The Department will calculate the cost of uninsured care by using each hospital's charges for services provided to uninsured patients as filed and certified to the Department for the same fiscal year as the Centers for Medicare and Medicaid Services cost report used in determining costs. The Department will convert each hospital's charges to cost for uninsured patients by multiplying the charges by the overall cost-to-charge ratio determined using each hospital's Centers for Medicare and Medicaid Services 2552 report for the same fiscal year used in determining cost; and

(C) The Medicaid upper payment limit and the uncompensated care amount shall be the sum of the Medicaid shortfall plus the cost of uninsured care.

009.03DISPROPORTIONATE SHARE PAYMENTS. Disproportionate share payments will be made each federal fiscal year following receipt of all required data by the Department. The total of all disproportionate share payments must not exceed the limits on disproportionate share hospital funding as established for this State by the Centers for Medicare and Medicaid Services in accordance with the provisions of the Social Security Act, Title XIX, Section 1923. Payments determined for each federal fiscal year will be considered payment for that year, and not for the year from which proxy data used in the calculation was taken. To calculate payment, proxy data will be used from each hospital's fiscal year ending in the calendar year preceding the state fiscal year which coincides most closely to the federal fiscal year for which the determination will be applied.

009.03(A)METHODS. For federal fiscal year 2007 and succeeding years, the Department will make a disproportionate share hospital payment to hospitals that qualify for a payment under one of the following pool distribution methods.

009.03(A)(i)BASIC DISPROPORTIONATE SHARE PAYMENT POOL 1. Pool 1 consists of eligible hospitals in peer groups 2, 3, and 6 that are not eligible under pool 6.

009.03(A)(i)(1)POOL 1. Total funding to Pool 1 will be $1,000,000. In federal fiscal year 2008 and following years, this amount will be increased by the percentage change in the consumer price index for all urban consumers, all items; U.S. city average. The Department will calculate the payment as follows. First, each hospital's Medicaid days, which include days from the Medicaid management information system claims file data run 150 days after each hospital's fiscal year end, managed care days, and out-of-state days reported before the federal fiscal year for which the determination is made, will be divided by the sum of the Medicaid inpatient days of all hospitals which qualify for a payment in pool 1. Second, the ratio resulting from such division will be multiplied times the total funding for pool 1 to determine each hospital's payment. If payment to a hospital exceeds the disproportionate share hospital payment limit, as established under section 1923(f) of the Social Security Act, the payment will be reduced. If payment is reduced to a hospital within pool 1, the additional funds will be redistributed pro rata to eligible hospitals within pool 1.

009.03(A)(i)(2)BASIC DISPROPORTIONATE SHARE PAYMENT POOL 2. Pool 2 consists of eligible hospitals in Peer Groups 1, 2, and 3 that are also eligible under Pool 6.

009.03(A)(i)(2)(a)POOL 2. Total funding to pool 2 will be $3,154,000 for federal fiscal year 2007, and $2,654,000 for federal fiscal year 2008. For federal fiscal year 2009 and following years, the total funding will be the amount for federal fiscal year 2008 with an annual increase by the percentage change in the consumer price index for all urban consumers, all items; U.S. city average. The Department will calculate the payment for pool 2 as follows. First, each hospital's Medicaid days, which include days from the Medicaid management information system claims file data run 150 days after each hospital's fiscal year end, managed care days, and out-of-state days reported before the federal fiscal year for which the determination is made, will be divided by the sum of the Medicaid inpatient days of all hospitals which qualify for a payment in pool 2. Second, the ratio resulting from the division will be multiplied times the total funding for Pool 2 to determine each hospital's payment. If payment to a hospital exceeds the disproportionate share hospital payment limit, as established under 1923 (f) of the Social Security Act, the payment will be reduced. If payment is reduced to a hospital within pool 2, the additional funds will be redistributed pro rata to eligible hospitals within pool 2.

009.03(A)(i)(3)DISPROPORTIONATE SHARE PAYMENT FOR HOSPITALS THAT PRIMARILY SERVE CHILDREN POOL 3. Pool 3 consists of the hospital that both primarily serves children age 20 and under, and has the greatest number of Medicaid days.

009.03(A)(i)(3)(a)POOL 3 FUNDING. Total funding for pool 3 will be $3,138,000 for federal fiscal year 2007, and $3,638,000 for federal fiscal year 2008. For federal fiscal year 2009 and following years, the total funding will be the amount for federal fiscal year 2008 with an annual increase by the percentage change in the consumer price index for all urban consumers, all items; U.S. city average. A hospital eligible for payment under this pool will not be eligible for payment under any other pool. If payment to the hospital exceeds the disproportionate share hospital payment limit, as established under 1923(f) of the Social Security Act, the payment will be reduced.

009.03(A)(i)(4)DISPROPORTIONATE SHARE PAYMENT FOR STATE OWNED INSTITUTIONS FOR MENTAL DISEASE HOSPITALS AND FOR ELIGIBLE HOSPITALS IN PEER GROUP 4 POOL 4. Pool 4 consists of state owned institutions for mental disease and other eligible hospitals in peer group 4.

009.03(A)(i)(4)(a)POOL 4 FUNDING. Total funding for Pool 4 will be $1,811,337 annually. The Department will calculate payments as follows.

Each eligible hospitals must certify in writing to the Nebraska Medical Assistance Program its charges for uncompensated care for the hospital's fiscal year ending in the calendar year preceding the federal fiscal year for which the determination is applied. Charges for uncompensated care will be converted to cost using the hospitals cost-to-charge ratio. payment to each hospital will be equal to the cost of its uncompensated care. If the total of all disproportionate share payment amounts for pool 4 exceeds the federally determined disproportionate share hospital limit for Nebraska, the will be reduced pro rata.

009.03(A)(i)(5)NON-PROFIT ACUTE CARE TEACHING HOSPITAL AFFILIATED WITH A STATE-OWNED UNIVERSITY MEDICAL COLLEGE POOL 5. Pool 5 consists of the non-profit acute care teaching hospital, subsequently referred to as the state teaching hospital, that has an affiliation with the University Medical College owned by the State of Nebraska. A hospital eligible for payment under this pool may be eligible for payment under Pool 6.

009.03(A)(i)(5)(a)POOL 5 FUNDING. Total funding to Pool 5 will be $15,000,000. For FFY 08 and following years the funding will be increased annually by the percentage change in the consumer price index for all urban consumers, all items; U.S. city average. The Department will calculate the disproportionate share hospital payment to Pool 4 5 as an amount equal to the cost of its uncompensated care. If the payment to the hospital exceeds the disproportionate share payment limit, as established under 1923(f) of the Social Security Act, the payment will be reduced.

009.03(A)(i)(6)UNCOMPENSATED CARE POOL. Pool 6 consists of hospitals that provide services to low-income persons covered by a county administered general assistance program; or hospitals that provide services to low-income persons covered by the state administered public behavioral health system.

009.03(A)(i)(6)(a)POOL 6 FUNDING. Total funding to Pool 6 will be the remaining balance of the total, federal and state, disproportional share hospital funding minus the funding for pools 1, 2, 3, 4, and 5, The Department will calculate payments as follows. Disproportionate share hospital payments to a hospital under all other pools will be subtracted from the hospital's disproportionate share hospital upper payment limit before allocating payments under pool 6. The costs for uncompensated care resulting from participation in county administered general assistance program will be reported by the county; and costs for the state administered public behavioral health system will be reported by each hospital. Reported costs will be subject to audit by the Department. A ratio for each hospital will be determined based on the uncompensated cost for each hospital to the total of uncompensated cost for all hospitals in pool 6. The ratio for each hospital will be multiplied times the available funding to the Pool to yield each hospital' annual payment amount. The total computable payment will be commensurate with the charges for uncompensated care resulting from participation in county administered general assistance program; or the state administered public behavioral health system. The annual payment amount will be dispersed in twelve monthly payments. If payment to the hospital exceeds the disproportionate share payment limit, as established under 1923(g) of the Social Security Act, the payment will be reduced to the payment limit. If payments to hospitals under this pool exceed the total allotment to Nebraska, the payments will be reduced pro rata.

009.03(B)LIMITATIONS ON DISPROPORTIONATE SHARE PAYMENTS. No payments made under this section will exceed any applicable limitations upon such payments established by Section 1923(g)(1)(A) of the Social Security Act. Disproportionate Share payments to all qualified hospitals for a year will not exceed the State disproportionate share hospital payment limit, as established under 1923 (f) of the Social Security Act.

009.04REDISTRIBUTION OF DISPROPORTIONATE SHARE HOSPITAL OVERPAYMENTS. As required by Section 1923(j) of the Social Security Act related to auditing and reporting of disproportionate share hospital payments, the Department will implement procedures to comply with the Disproportionate Share Hospital Payments final rule issued in the December 19, 2008, Federal Register, with effective date of January 19, 2009. Beginning in disproportionate share hospital state plan rate year 2011, if the results of audits conducted in accordance with the disproportionate share hospital final rule indicate that a hospital has exceeded the hospital specific disproportionate share hospital limit the amount of disproportionate share hospital payment in excess of uncompensated care costs will be recouped. Any funds recouped shall first be recouped from pool 1 through 5 payments and then from pool 6 payments and shall be redistributed to other eligible hospitals within the state, provided each hospital remains below their hospital specific disproportionate share hospital limit. Funds recouped from pools 1 through 6 shall first be redistributed to each eligible hospital in the pool in which the hospital payment was recouped. Any recouped funds that are not able to be distributed within the pool will accumulate and be redistributed to all eligible hospitals.

009.04(A)CALCULATION. The Department will calculate the redistribution as follows. First, for each pool in which funds were recouped beginning with Pool 1 and proceeding in pool numerical order, each hospital's difference between their disproportionate share hospital payment and disproportionate share hospital limit will be calculated. The difference will be divided by the sum of the difference between the disproportionate share hospital payment and disproportionate share hospital limit for all hospitals in the pool. Second, the ratio resulting from such division will be multiplied times the total funding recouped for the pool to determine each hospital's redistribution payment. If the sum of the original disproportionate share hospital payment and redistribution payment exceeds the disproportionate share hospital payment limit, the payment will be reduced. If payment is reduced to a hospital within a pool, the additional funds will be redistributed pro rata to eligible hospitals within the pool. If all hospitals within the Pool have reached their disproportionate share hospital limit, the remaining funds will be carried forward to be redistributed to all eligible hospitals. For pool 6, each hospital's difference between their disproportionate share hospital payment and disproportionate share hospital limit will include funds redistributed from pools 1 through 5 above.

009.04(B)FINAL REDISTRIBUTION. The final redistribution will be calculated as follows. First, for any funds that were not redistributed for each pool in which funds were recouped, each hospitals, except for pool 4 institutions of mental disease difference between their disproportionate share hospitals payment and disproportionate share hospitals limit will be calculated. The difference will be divided by the sum of the difference between the disproportionate share hospitals payment and disproportionate share hospitals limit for all non-institutions of mental disease hospitals. Second, the ratio resulting from such division will be multiplied times the total recouped funding not already distributed to determine each hospital's redistribution payment. If the sum of the original disproportionate share hospital payment and redistribution payment exceeds the disproportionate share hospitals payment limit, the payment will be reduced. If payment is reduced to a hospital, the additional funds will be redistributed pro rata to eligible non-institutions of mental disease hospitals within the pool. If all non-institutions of mental disease hospitals have reached their disproportionate share hospital limit, the federal portion of remaining funds will be returned to the Centers for Medicare and Medicaid Services.

471 Neb. Admin. Code, ch. 46, § 009

Adopted effective 6/6/2022