FY 2017 Hospital Inpatient PPS Final Rule:

Why You Should Still Amend and Re-submit Worksheet S-10

worksheet-S10-paperworkThe FY 2017 Hospital Inpatient PPS Final Rule published by CMS on August 2nd contained several changes from the Interim Rule published in April. A key change was postponing the integration of Worksheet S-10 into the Factor 3 calculation formula for uncompensated care payments. Under the Interim Rule, this integration would have started in FY 2018 using Worksheet S-10 data from FY 2014.

As stated in the Final Rule, CMS determined that it needed to “institute certain additional quality control and data improvement measures to the Worksheet S-10 instructions and data prior to moving forward with the incorporation of Worksheet S-10 data into the calculation of Factor 3.”

This change was an abrupt about-face for CMS following the issuance of CR 9648 on July 15th. This notice stated that all revisions to FY 2014 Worksheet S-10 needed to be completed and submitted to MACs by September 30, 2016. That announcement appeared to signal that CMS was going to follow through with the payment formula outlined in the Interim Rule.

While the Final Rule removed the immediate impetus, we believe that amending prior year Worksheet S-10 continues to be the smart choice for hospitals, given the eventual integration of Worksheet S-10 into the Factor 3 calculation formula:

  1. The Final Rule clearly states that CMS intends for this integration to take place by FY 2021.

Page 68 – “We expect data from the revised Worksheet S-10 to be available to use in the calculation of Factor 3 in the near future, and no later than FY 2021.”

  1. While the Final Rule mentions FY 2021, it does not rule out using Worksheet S-10 earlier than that — perhaps as soon as FY 2018.

Page 58 – “We will undertake further notice-and-comment rulemaking to address the issue of the appropriate data to use to determine Factor 3 for FY 2018 and subsequent fiscal years.”

Page 844 – “We will consider further whether the current Worksheet S-10 data or a proxy should be used to calculate Factor 3 for years between FY 2017 and FY 2021 in future rulemaking.”

  1. CMS intends to continue to take steps to standardize submissions and audits of Worksheet S-10.

Page 846 – “The issuance of these special instructions in CR 9648 is one of multiple steps we intend to take over the next several years to ensure more accurate and uniform reporting of uncompensated care costs on Worksheet S-10.”

Page 844 – “We intend to provide standardized instructions to the MACs to guide them in determining when and how often a hospital’s Worksheet S-10 should be reviewed.”

The language above from page 846 is especially interesting: Despite delaying the implementation of Worksheet S-10 into the Factor 3 payment calculation formula, CMS did not change its stance that amended Worksheet S-10s from FY 2014 need to be submitted to MACs by September 30, 2016.

Our Recommendation

While the 2017 Hospital Inpatient PPS Final Rule eliminated integrating Worksheet S-10 into the uncompensated care payment formula, it is clear that CMS intends to make this integration happen — perhaps as soon as FY 2018. CMS’s adherence to the September 30, 2016, date for amending FY 2014 Worksheet S-10 data shows that hospitals may have limited time to revise Worksheet S-10s in the future, once this integration happens.

With this in mind, Healthcare Payment Specialists continues to advise hospitals to amend and resubmit accurate information for FY 2015 based on the current instructions and to ensure that FY 2016 submissions are consistent with the current instructions.

Healthcare Payment Specialists

Healthcare Payment Specialists

Founded in 2002, Healthcare Payment Specialists (HPS) provides technology enabled solutions for health care eligibility, government reimbursement and compliance to hospitals and healthcare systems across the country. Using its STINGRAY software platform, HPS delivers solutions on a software-as-a-service (SaaS) basis or through outsourced service engagements.
Healthcare Payment Specialists