Provider Notice issued 10/04/13

State Fiscal Year (SFY) 2014 Provider Potentially Preventable Readmissions (PPR) Reports

The Department of Healthcare and Family Services has published the SFY 2014 hospital specific PPR Reports which includes a hospital's actual and target rate of readmission and illustrative payment penalty at the 2014 Hospital Specific PPR Reports HFS web page. Each hospital is listed by its name and unique Medicaid provider identification number. Should you have any questions regarding your number, please call the Bureau of Rate Development and Analysis at the following number 217-785-0710.

SFY 2014 Policy Changes

• Child Behavioral Health claims are removed from the calculations.

• Children treated at a Tier 1 Pediatric Intensive Care Unit (PICU) facility have a different risk adjusted pediatric/behavioral health factor to account for the higher acuity children treated at these facilities.

• Expected threshold for acute services is lowered to .85 and behavioral health is lowered to .90 of the statewide average instead of the .79 used in the SFY 2013 Policy.

• Payment penalties will not exceed 3% of the total inpatient hospital payments which includes static and assessment payments (net the tax).

• Payment penalties can be cost avoided in full or in part. The actual and target rates published give hospitals the chance to reduce their readmissions, achieve their target rates, and eliminate or reduce the penalties prior to any penalty amount being finalized and collected.

• Final payment penalties owed will be one half the payment penalty amount listed on the reports less any cost avoidance.

Payment Penalty

Hospitals will have one year to reduce their readmissions and cost avoid penalties before any amount is owed. Once all inpatient claims data has been received by the department for SFY 2014, after January 1, 2015, the department will do an analysis of SFY 2014 to determine if those hospitals that were above their target rate were able to eliminate or reduce their actual to target variance and reduce their average cost per readmission chain. Where variances are eliminated, the payment penalty will be cost avoided in full and there will be no payment penalty imposed. Where the variance is reduced, the penalty amount will be reduced. The department will notify hospitals of any payment penalty eliminations or reductions prior to July 1, 2015. After the application of any reductions, hospitals will owe 50% of the remaining payment penalty. The penalty will be owed in 12 equal monthly payments, beginning July 1, 2015. For those hospitals that increase their actual to target variance, the payment penalty may increase, but will be capped at the original amount listed on the report.

Data Files

Hospital data files are available for analysis on request. If you wish to receive a file, please send an e-mail to HFS Hospitals with a name of one person to receive the file, which hospital or hospitals they represent, the name of the CEO, CFO, their e-mail address, the Hospital's Address and the Medicaid Provider ID number. There will be one file sent per hospital. The person receiving the file will get instructions on how to download the Entrust Encryption software followed by the password protected encrypted data file.

Theresa A. Eagleson, Administrator

Division of Medical Programs