January 17, 2013

FHA Comments on Meaningful Use Stage 3, Medicare DSH

This week, FHA submitted comments in response to recent requests for information from the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS). In commenting on Stage 3 meaningful use requirements for electronic health records, FHA stated that it is much too soon to look at Stage 3. It is vital that HHS first evaluate Stage 1, and even Stage 2, before moving to Stage 3.  HHS must evaluate the existing requirements for meaningful use from the perspective of providers, vendors and the government. HHS must identify what components of the existing program are working well and where improvement is needed before adding a new set of measures to the definition of meaningful use. 

Comments were also submitted in response to CMS on the Disproportionate Share Hospital (DSH) provisions of the Patient Protection and Affordable Care Act (PPACA), specifically Section 3133, in advance of formal proposed rules on these provisions. On Jan. 8, CMS, along with its consultants Dobson DeVanzo & Associates and KNG Health Consulting, LLC, presented expected changes to Medicare DSH payments beginning in federal fiscal year (FY) 2014. Beginning in FY2014, Medicare DSH payments will be reduced to 25 percent of the amount that would have been paid under the existing methodology and the remaining 75 percent will be reduced by a factor based on the percent change since 2013 in the under 65 uninsured population. The remaining funds will then be distributed according to each hospital's proportion of the estimated, aggregate amount of uncompensated care. FHA comments addressed the need to capture not only charity care and bad debts in determining uncompensated care, but also the unreimbursed costs of Medicaid, State Children's Health Insurance Program, and other state and local government indigent care programs. FHA also stressed the need to capture all charity care write-offs that occur during a provider fiscal year and not just those for services provided during the accounting year. FHA also asked that the uncompensated care costs include those costs associated with graduate medical education programs. Finally, in light of the Supreme Court decision that allows states to opt out of Medicaid expansion under PPACA, we are concerned that the original 2010 Congressional Budget Office (CBO) estimate of the uninsured would not be accurate for future years and a new estimate should be developed for measuring the percent change beginning in 2014.