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Elizabeth M. Whitehorn, Director

Provider Notice issued 06/30/12

Institutional Provider Rate Reductions Effective July 1, 2012

To:​ Enrolled Hospitals:  Chief Executive officers, Chief Financial Officers, and Patient Accounts Managers; Renal Dialysis Facilities; Ambulatory Surgical Treatment Centers; and Hospice Agencies​
Date:​ ​June 30, 2012
​Re: Institutional Provider Rate Reductions Effective July 1, 2012 ​

As a result of Public Act 097-0689(pdf), referred to as the Save Medicaid Access and Resources Together (SMART) Act, the department will reduce the rates or payments for hospital inpatient and outpatient and other institutional provider services.

Effective with dates of service on and after July 1, 2012, hospital inpatient and outpatient services will be reduced by 3.5%. This reduction also applies to any payments for current static payment programs. Hospitals identified as Safety Net Hospitals or Critical Access Hospitals are exempt from the 3.5% reduction, as are drug and alcohol treatment services provided by hospitals enrolled for COS 35 - Alcohol and Substance Abuse Treatment Services.

All components of claims reimbursement including the DRG or Per Diem base amount, capital for DRG reimbursement, outliers, DSH, MPA, and MHVA will be calculated using current reimbursement rates and methodologies and then reduced by 3.5%.

The 3.5% reduction for institutional providers also impacts the following services:

  • Renal dialysis treatment  

  • ASTC services

  • Organ Transplant services

Additionally, a 2.7% reduction impacts the following services:

  • Hospice services, for all revenue codes except 658 – Nursing Home Room & Board.  The long term care facility rate will already include the reduction. 

  • Hospitals, including Safety Net and Critical Access hospitals, billing non-institutional fee-for-service claims.

  • Renal dialysis injectable drug payment. 

The rate reductions will be applied prior to any deductions for co-payments or third-party liability (TPL).

Hospitals are advised to locate their facility-specific letters containing Fiscal Year 2013 assessment payment amounts on the HFS Web site: Medicaid Reimbursement 2013 Assessment Payment Letters

Any questions regarding this notice may be directed to your facility’s medical assistance consultant in the Bureau of Comprehensive Health Services at 1-877-782-5565.

 

Theresa A. Eagleson, Administrator

Division of Medical Programs