Additional Payment for Qualifying Hospitals with Lowest Per Enrollee Medicare Spending

Section 1109 of Public Law 111-152 makes $400 million available to qualifying "subsection (d)" hospitals defined in section 1886(d)(1)(B) of the Act that are located in a county that ranks within the lowest quartile of counties based upon its spending for benefits under Medicare Part A and Part B per enrollee adjusted for age, sex, and race.

The Centers for Medicare & Medicaid Services (CMS) has established the risk assessment model using linear regression to determine the demographic adjustments and is outlined in the August 16th, 2010 Federal Register from pages 50303 through 50312 (75 FR 50304 - 50312).

The payments will be distributed in annual lump sums through the Fiscal Intermediary/Medicare Administrative Contractor over the course of two years. The amount of $150 million will be distributed in FY 2011 and $250 million will be distributed in FY 2012 based on the qualifying hospital's predetermined share of funds.

WPS is currently awaiting further instructions from CMS as to how and when the funds will be determined and distributed. More information is forthcoming and will be posted appropriately.

Cost Reporting Implications

Currently, CMS has proposed that hospitals who receive the qualifying distributions for this program report the amounts received on their applicable FYE cost report as an "Other adjustment" line on Worksheet E, Part A. It is important to note that the funds will not be reconciled using the cost report, merely reported on the cost report as documented payments from the Medicare Trust Fund.

For questions concerning how low volume is determined, please contact the WPS Audit Supervisor assigned to your facility.

Page Last Updated: Thursday, 15-Dec-2011 15:08:17 CST