I 111th CONGRESS 1st Session H. R. 4250 IN THE HOUSE OF REPRESENTATIVES December 9, 2009 Mr. Melancon (for himself, Mr. Alexander, Mr. Cao, Mr. Cassidy, Mr. Boustany, and Mr. Fleming) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To direct the Secretary of Health and Human Services to revise regulations implementing the statutory reporting and auditing requirements for the Medicaid disproportionate share hospital (DSH) payment program to be consistent with the scope of the statutory provisions and avoid substantive changes to preexisting DSH policy.

1.

Short title; findings

(a)

Short title

This Act may be cited as the Medicaid DSH Integrity Act. (b)

Findings

Congress finds the following: (1)Medicaid disproportionate share hospital (DSH) payments are a critical source of funding for many safety net hospitals that provide essential access to care for the poor and uninsured. (2)The statutory reporting and auditing requirements added by the Medicare Prescription Drug Improvement and Modernization Act of 2003 are important to provide assurances to Congress, the Department of Health and Human Services, States and the public that DSH funds are being used to fulfill their intended statutory purpose of assisting hospitals that serve a disproportionate share of low-income individuals. (3)The Centers for Medicare & Medicaid Services issued Medicaid DSH auditing and reporting regulations (as defined in section 2(d)) that, in implementing those reporting and auditing requirements, also implemented changes to underlying DSH policy which have the effect of narrowing the scope of DSH payments that may be made for many States. (4)In adding those reporting and auditing requirements, Congress did not intend to alter the definition of DSH-eligible costs or to narrow the scope of DSH payments that may be made under the existing DSH program and the substantive standards in section 1923(g) of the Social Security Act (42 U.S.C. 1396r–4(g)). (5)The policy changes in such regulations would result in DSH payment reductions of millions of dollars to critical safety net providers that have long participated in the Medicaid DSH program under payment methodologies previously approved by CMS.

2.

Revision of Medicaid DSH auditing and reporting regulations

(a)

In general

Not later than 60 days after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with States and disproportionate share hospitals (as determined for purposes of the Medicaid DSH program), shall— (1)indicate, in appropriate guidance, that CMS does not intend to enforce any changes in policy related to the calculation of the limits under section 1923(g)(1)(A) of the Social Security Act that were contained in the Medicaid DSH auditing and reporting regulations; and (2)publish an interim final rule to revise the Medicaid DSH auditing and reporting regulations at sections 447.299(c) and 455.304 of title 42, Code of Federal Regulations, as necessary— (A)to correct policy changes related to the calculation of the limits under section 1923(g)(1)(A) of the Social Security Act; (B)to provide appropriate guidance for otherwise implementing the Medicaid DSH auditing and reporting regulations; and (C)to provide for the regulatory changes described in subsection (b). (b)

Regulatory changes To be included in new interim final rule

The regulatory changes described in this subsection are the following: (1)In defining the costs of furnishing services to individuals with no health insurance (or other source of third-party coverage), CMS shall permit inclusion of all costs related to services provided to patients with no insurance for the service rendered, even if the patient has insurance that covers other services. The receipt by a hospital of nominal payments related to a service shall not constitute health insurance or a source of third-party coverage. (2)Consistent with prior guidance of CMS contained in a letter to State Medicaid directors on August 17, 1994, CMS shall permit States to use the definition of allowable costs in its State Medicaid plan, or any other definition, in computing such costs as long as the costs determined under such a definition do not exceed the amounts that would be allowable under the Medicare principles of cost reimbursement. CMS shall interpret the language of the audit requirement at section 1923(j)(2)(C) of the Social Security Act describing “inpatient hospital and outpatient hospital services” to be consistent with the term “hospital services” as used in section 1923(g)(1)(A) of such Act and not to indicate an intent by Congress for a more restrictive interpretation of such section 1923(g)(1)(A). (3)CMS shall, as appropriate, revise the General DSH Audit and Reporting Protocol referenced in the Medicaid DSH auditing and reporting regulations and issued at the same time as those regulations, in particular, to permit the use of either an overall cost-to-charge ratio or departmental cost-to-charge ratios. (4)CMS shall revise section 455.304(d)(2) of title 42, Code of Federal Regulations, to permit alternative methodologies for determining actual costs, including through trending forward costs from prior years. (c)

Initiation of requirements

(1)

In general

Section 1923(j) of the Social Security Act (42 U.S.C. 1396r–4(j)) is amended by striking 2004 and inserting 2008. (2)

Effective date

The amendment made by paragraph (1) shall be effective as if included in the enactment of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173). (d)

Definitions

In this Act: (1)The term CMS means the Centers for Medicare & Medicaid Services. (2)The term Medicaid DSH auditing and reporting regulations means the final regulation issued on December 19, 2008, and published beginning at 73 Federal Register 77904. (3)The term Medicaid DSH program means the program of payment adjustments under section 1923 of the Social Security Act (42 U.S.C. 1396r–4). (4)The term Secretary means the Secretary of Health and Human Services, acting through CMS.