1. 1 CPE Cost Reports, Audits and WACs What You Need to Know September 26, 2008 10:00 AM

2. 2 Today's Speakers Jeff Mero, Executive Director, AWPHD Mary K. Bensen, Consultant

3. 3 The CPE Program – SFY 2009 HRSA estimates that the total payments to CPE hospitals will be $257 million CMS will pay $199 million of the costs The state will pay $58 million

4. 4 Definitions CMS: Centers for Medicare & Medicaid – the federal provides the federal match from Medicaid HRSA: Health & Recovery Services Administration – Medicaid state agency OIG: Office of the Inspector General – audit department of the federal Health and Human Services (HHS)

5. 5 General Issues on the Medicaid Cost Report The fee-for-service and state programs paid claims are provided by the HRSA (PS & R). Hospitals develop logs (PS & R) of paid claims for Healthy Options (managed care) services and the uninsured by revenue center. The payments are to reflect the actual payments received for the claims in the hospital developed logs. If a hospital corrects its Medicaid cost report, the hospital needs to submit a revised signed certification (Schedule S1).

6. 6 Common Errors on the Medicaid Cost Reports Routine charges for inpatient Medicaid, state programs, managed care, and the uninsured are omitted (see Schedule 1 Columns 1a, 3a, 5a, and 7a on Total Routine line between lines 36 and 37). Interim payments sometimes do not include actual payments, third party, patient responsibility, and hospitals portion of the CPE payments. Cross walk between revenue codes and cost centers on Medicaid cost report missing.

7. 7 Important Issues on CPE The CPE Medicaid program includes federal funds and all CPE hospitals should consider the implications by maintaining detailed documentation. CMS and HRSA rely on the hospital certification that the information is true, correct, complete and from hospital records.

8. 8 What the Federal Government Relies on for CPE Hospitals certify that the Medicaid costs and costs of the uninsured have been incurred (the costs are real and the hospital is responsible for payment of the costs). And the hospital has paid for non-federal share of the costs without using non-allowed federal funds such as Medicaid payments or a federal grant for another project. Federal regulation 42 CFR 433.51

9. 9 Audits – Audits - Audits HRSA conducts audits based on paid claims and will continue for CPE hospitals after Medicaid cost reports are final. Timing or scope of claims audits are not determined by the CPE program staff rather by the audit staff. Various federal agencies can audit hospitals as the Medicaid program relies on federal funds with no time or scope limitation. The federal General Accounting Office can review the CPE program at any time – often such reviews are part of a report to Congress. CPE audits both on a federal and state level.

10. 10 CPE Audits are in Addition to Ongoing Medicaid Audits Recent webcast provided an in depth discussion of ongoing Medicaid audits. The webcast “The Ins and Outs of Dealing with Medicaid Audits”. The webcast can be accessed at AWPHD.org in New from AWPHD or WSHA.org in the Webcasts and Presentation section.

11. 11 When Might the HRSA Audit the CPE Program HRSA currently relies on the certification from the Medicaid cost report and corrects obvious reporting errors for the interim payments and settlements. HRSA has stated that at some point in the future hospital managed care and uninsured data on the final Medicaid cost report may be audited - possibility by an outside audit firm. If HRSA elects to audit, SFY 2006, 2009 would be the soonest.

12. 12 What the HRSA May Audit in the CPE Program Continuation of HRSA audits on claims regardless of status: CPE or non-CPE Audit of hospital reported data on managed care and uninsured claims data up to a claim by claim review Affects DSH CAP: Uninsured cases revenue codes: are the codes that Medicaid pays Affects DSH CAP: All payments for the managed care and uninsured included Affects DSH CAP: Were the uninsured truly uninsured with no third party payments

13. 13 When Might the Federal Government Audit CPE HRSA staff has stated that CMS will review CPE after the SFY 2006 final Medicaid cost reports are settled. CMS or the OIG or some other federal agency can audit the CPE program at any time.

14. 14 CPE Audit by Federal Government (CMS or OIG) A federal audit is between the state and the federal government. If the audit is conducted by the OIG (agency other than CMS), the findings of the audit are to CMS for any action CMS would take with the state. CPE hospitals may be audited to determine if the data HRSA used are in compliance with federal requirements and the state plan (how the state said the program is to operate).

15. 15 What Concerns Would CMS Have with HRSA CMS is a payer and pays over 50 percent of the Medicaid program costs. CMS will review how HRSA came up with the billing amount to CMS. CMS will look at what HRSA is including as costs. Is HRSA paying over the upper limit – the amount Medicare would have paid for the services (measured annually)?

16. 16 What a Hospital May Expect in a Federal (CMS or OIG) CPE Audit Affects DSH CAP: Audit managed care and uninsured claims data up to a claim by claim review of what is reported on the Medicaid cost report. Affects DSH CAP: Uninsured cases revenue codes - are the codes what Medicaid pays. Affects DSH CAP: All payments for the managed care and uninsured included. Affects DSH CAP: Were the uninsured truly uninsured with no third party payments?

17. 17 What Documentation Should a Hospital Maintain Managed care: patient logs including discharge date or date of service, payer, charges by revenue center, and payments on the claims by plan and TPL Uninsured: patient logs including discharge date or date of service, charges by revenue center, and payments by patient Documentation of how the managed care and uninsured are identified and the retrieval process used Medicaid cost report (as-filed and final) Revenue codes to cost center cross walk

18. 18 Records That are Updated for Final Medicaid Cost Report Patient logs for the managed care and uninsured services must be updated when the final Medicaid cost report is prepared. Any additional payments on the uninsured claims must be recorded. Claims that were considered insured but later found to be uninsured would be added. Cross walk for revenue codes and cost centers.

19. 19 How Would State Audits Affect CPE Hospitals Claims audits would probably reduce the hold harmless if claims are disallowed or adjusted. If the CPE did not receive a grant, the audit items that affect the DSH CAP could result in in the hospital returning funds to state and the state returning funds to CMS. If the CPE did receive a grant, the audit items that affect the DSH CAP could result in the state returning funds to CMS.

20. 20 How Would Federal Audits Affect CPE Hospitals Any findings would be between CMS and the state, a federal audit would not result in a federal recoupment from the hospital. If there is a recoupment between CMS and the state, the same risks apply to the CPE hospital as with a state audit especially for non-grant hospitals.

21. 21 Proposed State Medicaid Regulations (WAC) - Status Hearing on the WAC was held August 26, 2008 Comments were due by August 26, 2008 As of now, WACs are not shown as adopted however, no change from the proposed is anticipated

22. 22 388-550-4670 CPE Payment Program – “Hold Harmless” Provision Hold harmless is subject to legislative directives and appropriations. Hospital CPE submissions are subject to audit including the cost report schedules. WAC 4(b) states that the final hold harmless calculation will be performed after audit.

23. 23 388-550-4690 Authorization Requirements and Utilization Review for Hospitals Eligible for CPE Payments Clarifies that psychiatric admissions are excluded from this section. Effective August 1, 2007, CPE hospitals are subject to the same utilization rules as the non-CPE hospitals.

24. 24 388-550-5470 CPE Medicaid Cost Report and Settlements Hospitals must send the Medicare finalized cost report (with NPR) 30 days after receipt. Hospitals have 30 days after receipt of HRSA updated PS & R to complete the finalized cost report and update the uninsured and managed care claims. Hospitals must provide cross walks between revenue codes and cost centers on the Medicaid cost report. All as-filed, finalized cost reports and supplemental data are subject to audit with no time restrictions or limitations. WAC 4(b) states that the final hold harmless calculation will be performed after audit.

25. 25 Questions