HCFA will allow nearly 300 hospitals to resubmit their fiscal 1999 wage data in the next several weeks, a decision that means the facilities could split as much as $500 million in additional Medicare payments at the expense of other hospitals.
The hospitals affected are ones that incorrectly recorded "zero" for wage-related costs on their Medicare worksheets. HCFA decided to allow the hospitals to resubmit the worksheets because hospitals were required to submit the data in May, about three months earlier than usual. The earlier date was necessitated by changes made by last year's budget law.
The nearly 300 hospitals that recorded a zero will have until Dec. 3 to resubmit the correct data. In all, nearly 200 urban hospitals in about 63 metropolitan statistical areas and about 100 rural hospitals in 15 states could be affected, HCFA said.
However, HCFA was much less precise in its estimate of the impact, which ranged from zero to $500 million, nor would it estimate how much the change would affect Medicare payments, an agency spokeswoman said.
According to the HCFA regulation, any changes made must not increase total Medicare spending. Therefore, any increase in payments for the 300 hospitals will be offset by a decrease in payments to other hospitals.
The reimbursement changes will be made prospectively, meaning that any changes made to Medicare reimbursement rates will not be retroactive to the beginning of the federal fiscal year, which began Oct. 1. HCFA would not say when the changes would be completed.
The American Hospital Association supports the change. "The issue here is one of data accuracy," said Carmela Coyle, AHA senior vice president for advocacy and representation. "This is an important opportunity to make sure the data used to calculate the wage index is as accurate as possible."
But Lawrence Goldberg, director of Washington national affairs in healthcare for Deloitte & Touche, said HCFA's decision sets a dangerous precedent.
"In the past, when HCFA made mid-year (prospective payment system) wage adjustments, those adjustments were not budget neutral," Goldberg said. "It would appear . . . that a basic tenet of (Medicare) PPS is being broken, that of predictability of the PPS rate."
Because wage-index calculations are made for each MSA, the changes will affect not only the hospitals involved but also other hospitals in the same MSA.
The changes were published in the Nov. 19 Federal Register.