New Class of Disproportionate Share Hospital Payments [44 Pa.B. 7142]
[Saturday, November 8, 2014]The Department of Public Welfare (Department) is providing final notice of its creation of a new class of disproportionate share hospital (DSH) payments for those acute care general hospitals that provide a significant amount of services to the indigent and Medical Assistance (MA) populations residing in Pennsylvania (PA) cities with a per capita income substantially below the Statewide average. These payments provide additional financial support to hospitals providing inpatient hospital services and serve an inordinate amount of MA beneficiaries in impoverished areas of this Commonwealth.
Qualifying Criteria
For a hospital to qualify for this class of DSH payment, it must meet all of the following criteria, based on its Fiscal Year (FY) 2011-2012 PA MA hospital cost report unless otherwise specified:
(a) The hospital is enrolled in PA MA as an acute care general hospital.
(b) The hospital provides at least 20,000 inpatient days of care to MA beneficiaries.
(c) The hospital has an MA inpatient utilization rate of at least 25% as determined by dividing the hospital's MA inpatient days by its total inpatient days of care.
(d) The hospital has a negative 3-year average change in net patient revenue according to the Pennsylvania Health Care Cost Containment Council's Fiscal Year 2012 Financial Analysis, Volume One, General Acute Care Hospitals.
(e) The hospital is located in a county in this Commonwealth which contains a city with a population of 30,000 or more and that city has a per capita income below 60% of the average per capita income for this Commonwealth as documented in the 2010 United States census data.
Payment Determination
The Department is paying each qualifying hospital a proportionate amount of the funding allocated for this payment based on the hospital's ratio of MA inpatient days to the total MA inpatient days for all qualifying hospitals. The hospital's ratio is multiplied by the total amount allocated for these payments to determine its payment amount. The data used for this determination is based on the FY 2011-2012 PA MA hospital cost report.
The Department published notice of its intent to create this additional class of DSH payments at 44 Pa.B. 4044 (June 28, 2014). The Department received two comments during the 30-day comment period. The comments suggested that these DSH payments violate Federal and State equal protection and access requirements of section 1902(a)(30)(A) of the Social Security Act (42 U.S.C.A. § 1396a(a)(30)(A)). The comments also suggest that these payments were created to reward one hospital at the expense of others.
The Department is not treating similarly situated hospitals in a disparate manner. These payments were created to provide additional support to those hospitals providing significant amounts of hospital services to MA and low-income populations in financially distressed areas of this Commonwealth. The Department has a legitimate interest in promoting the continued participation of these hospitals in the MA Program. Finally, the creation of these payments has not affected MA payments to any other hospital in this Commonwealth.
Fiscal Impact
The FY 2013-2014 impact is $4.128 million ($1.989 million in State general funds).
BEVERLY D. MACKERETH,
SecretaryFiscal Note: 14-NOT-915. (1) General Fund; (2) Implementing Year 2013-14 is $1,989,000; (3) 1st Succeeding Year 2014-15 through 5th Succeeding Year 2018-19 are $0; (4) 2012-13 Program—$268,112,000; 2011-12 Program—$325,685,000; 2010-11 Program—$243,809,000; (7) MA—Inpatient; (8) recommends adoption. Funds have been included in the budget to cover this increase.
[Pa.B. Doc. No. 14-2333. Filed for public inspection November 7, 2014, 9:00 a.m.]
