Days of care provided under Mississippi’s section 1115 Medicaid waiver for evacuees displaced by Hurricane Katrina were properly excluded from the Medicaid fraction of the Medicare disproportionate share hospital (DSH) adjustment calculation. The CMS Administrator reversed the Provider Reimbursement Review Board’s (PRRB) decision to include 1,681 "Katrina days" in the calculation for two different hospitals, finding that the hospitals failed to provide documentation to show that the Katrina days were not uncompensated care pool (UCCP) days (In the Case of: CCT&B 2005-2006 Hurricane Katrina §1115 Waiver UCP Days Group v. Novitas Solutions Inc., CMS Administrator Decision, Review of PRRB Decision No. 2016-D18, November 18, 2016; In the Case of: Singing River Health System v. Novitas Solutions, Inc., CMS Administrator Decision, Review of PRRB Decision No. 2016-D19, November 18, 2016).
Katrina days. In response to Hurricane Katrina, CMS approved waivers extending and expediting Medicaid eligibility to displaced individuals meeting the income eligibility standards. States were given permission to reimburse providers that incurred uncompensated care costs. When some hospitals submitted cost reports, they included inpatient days for those receiving services under the waiver in the Medicaid fraction for the Medicare DSH adjustment calculation. Medicare contractors excluded these days when settling the cost reports, stating that the UCCP was created for patients who were uninsured, not eligible for Medicaid, and not part of the waiver. On appeal, the PRRB found that a change in the law in 2005 allowed days of care to be included for everyone under waiver authority (see ‘Katrina days’ to be included in DSH payment calculation, October 12, 2016).
Waiver and UCCP plan. On appeal, the CMS Administrator noted that the hospitals failed to distinguish between days of care for uncompensated care and care provided to the Medicaid expansion population in the cost report. All days were submitted as "Katrina days," and the contractor found no documentation supporting the inclusion of these days as related to the Medicaid expansion population.
The Deficit Reduction Act (DRA) (P.L. 109-171) clarified that HHS may include in the calculation patient days for those who are not eligible for Medicaid under a state plan but who receive benefits under an approved demonstration project. The DRA also provided funding for Hurricane Katrina demonstration projects, allowing HHS to pay for the state share of expenditures for care provided to Medicaid-eligible individuals affected by the hurricane and total uncompensated care costs for uninsured and non-Medicaid-eligible affected individuals. In addition to approving Mississippi’s section 1115 Katrina waiver for Medicaid-eligible evacuees, CMS also approved the state’s UCCP plan, which dealt with the uninsured, non-Medicaid-eligible, hurricane-affected population.
Differentiating the days. The Administrator found that payment made under the UCCP plan is not payment for patients eligible for Medicaid coverage under the state plan. Hospitals may include all days attributable to populations eligible for federal matching payments under an approved waiver, but UCCP payments are not considered matching payments and cannot be counted in the DSH calculation. Although the hospitals stated that some of the excluded Katrina days were in fact days for the waiver population, the Administrator found that the hospitals bore the burden of proof of substantiating this claim, but failed to submit any documentation showing that some of these days were not UCCP days. The PRRB decision was reversed.
Cost reporting periods ending 2005-2006; September 30, 2006.
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