Provider Notice issued 09/03/14

Potentially Preventable Readmissions (PPR) State Fiscal Year (SFY) 2013 Reconciliation – Remaining Amount Owed

In SFY 2013, as part of Public Act 097-0689(pdf) (SMART Act), hospitals were required to reduce inpatient hospital readmission expenditures by a minimum of $40 million as a quality initiative. The Department of Healthcare and Family Services, after negotiations with the hospital community, developed a PPR Quality Initiative using 3M™ PPR software that set actual and target PPR rates specific to each hospital. For hospitals that had readmissions over their target rates, a payment reduction amount was calculated based on the number of PPR chains above the target multiplied by the hospital’s average cost of PPRs. Twenty-five percent of the payment reduction was deducted from the inpatient claims paid by the department in SFY 2013 between March and June. Hospitals then were given a chance to cost avoid the remaining amount owed (75%) by reducing their PPRs. Administrative rules were adopted last year and can be referenced on the Joint Committee on Administrative Rules Administrative Code Title 89: Social Services webpage.

A Provider Notice was sent in July of 2012 detailing the PPR policy and referencing the department’s PPR website and how to receive the Hospital Specific PPR reports. SFY 2013 Hospital specific PPR reports were emailed with the payment reduction amounts to those hospitals that registered in December of 2012.

Please review the PPR Quality Initiative Fact Sheet (pdf) which includes the background and calculation methodology of the PPR Quality Initiative.

The department has finalized the PPR reconciliation of SFY 2013. Those hospitals that were above their target rates and had a payment reduction amount calculated should go to the following website to see the remaining amount owed. If a hospital was able to cost avoid a portion of the payment penalty then that amount was deducted from the total. If a hospital was able to meet their target then no additional monies are due the department. Please review the HFS Hospital Inpatient Potentially Preventable Readmissions Information and Reports webpage to see by hospital the total payments recouped, the amounts cost avoided and the remaining amounts owed.

Hospitals can either pay the total remaining amount owed or contact the department at 217-785-0710 to discuss a payment plan. If paying the total amount, receipt of the monies are due within 30 days of this provider notice. The check must be clearly labeled as “PPR SFY 2013 reconciliation” so as not to be confused with other hospital payments. At this time all checks must be in paper form and mailed to the department until the electronic payment process is available. Please remit your payment to:

 

Illinois Department of Healthcare and Family Services

Bureau of Fiscal Operations

PO Box 19491

Springfield IL, 62794-9491

 

Should the department not receive the payments, recoupments against future inpatient claims will be made until the full amount of the payment penalty is receipted by the department. Questions regarding the PPR policy should be directed to the Bureau of Rate Development and Analysis at 217-785-0710.

Theresa A. Eagleson, Administrator

Division of Medical Programs