DEPARTMENT OF
PUBLIC WELFAREInpatient Hospital Services [35 Pa.B. 3266] This notice provides advance public notice of the Department of Public Welfare's (Department) intent to revise its payment method for select supplemental payments (Outpatient Disproportionate Share, Medical Education, Community Access Fund and Hospital Uncompensated Care or Hospital Extraordinary Expense payments) effective on or after July 1, 2005. These revisions will affect acute care general hospitals, private psychiatric hospitals, medical rehabilitation hospitals and drug and alcohol rehabilitation hospitals.
The Department proposes to change its payment methodology for supplemental payments as follows.
Affected Payments
Affected supplemental payments are limited to Outpatient Disproportionate Share, Medical Education, Community Access Fund and Hospital Uncompensated Care or Hospital Extraordinary Expense payments.
Payment Limitation
Effective July 1, 2005, the Department will limit supplemental payments to hospitals with an operating margin less than 1% so that one payment or the combination of one or more of the payments does not contribute to the hospital's operating margin exceeding the 1% level. Hospitals with an operating margin of 1% or greater will only receive supplemental payments to the extent that those payments do not result in the hospital exceeding the 1% operating margin level.
Methodology
The Department will use the most recently published Pennsylvania Health Care Cost Containment Council hospital financial report to determine the hospitals with operating margins over 1%. The Department will calculate the value of a 1% operating margin for each hospital. The Department will calculate the effect on the operating margin of eliminating the affected supplemental payments. If the elimination of one payment or the combination of one or more of the payments would result in the hospital's operating margin still exceeding 1% then those payments will not be made. If the elimination of one payment or the combination of one or more of the payments would result in an operating margin of less than 1%, then the hospital will be entitled to its supplemental payments to the extent that the payments will not result in the hospital's operating margin exceeding 1%.
Fiscal Impact
Total savings resulting from this change are estimated at $113.904 million ($51.200 million in State funds) in Fiscal Year (FY) 2005-2006 and $134.956 million ($61.300 million in State funds) in FY 2006-2007.
Public Comment
Interested persons are invited to submit written comments regarding this notice to the Department of Public Welfare, Office of Medical Assistance Programs, c/o Deputy Secretary's Office, Attention: Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120. Comments received by June 24, 2005, will be reviewed and considered in determining final payment amounts and payment methodologies for these select supplemental payments.
Persons with a disability who require an auxiliary aid or service may submit comments using the AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
ESTELLE B. RICHMAN,
SecretaryFiscal Note: 14-NOT-422. No fiscal impact; (8) recommends adoption. As a result of this change, the General Fund will realize a savings of approximately $51.2 million in 2005-2006.
[Pa.B. Doc. No. 05-1096. Filed for public inspection June 3, 2005, 9:00 a.m.]
