PROVIDER FEE IMPLEMENTATION STEPS / ISSUES

1. PROVIDER FEE IMPLEMENTATION STEPS / ISSUES Presentation to Jerry Dubberly, PharmD, Medicaid Director Department of Community Health April 27, 2010 Alec Steele, Director, Reimbursement Services

2. Discussion Points • Establish Implementation Work Group • Identify Associated Agencies/entities/partners • Schedule Initial Work Group Planning Meeting • Implement Provider Fee Management • Operationalize Provider Fee Model Development • Operationalize Rate Maintenance • Implement State Plan Amendment Activities

3. Discussion Points (cont.) • Implement Provider Fee Exemption/Waiver Activities • Implement Provider Fee Communication/Education Plan • Implement Provider Fee Accounting • Implement Provider Fee Reporting • Implement Provider Fee Rate-Setting / Rate-Maintenance • Implement Provider Fee Administrative Code Modifications • DCH Staff Assignments

4. Establish Implementation Work Group • Select participants of internal DCH Provider Fee Work Group • Identify Work Group Project Manager • Convene internal DCH planning meeting • Issues: The complexity of the provider fee implementation will require the cooperative efforts of a diverse group of individuals working independently but toward a common goal. An impartial external project manager will be needed to guide this effort and keep everyone on task.

5. Identify associated agencies/entities/partners • DCH Financial Management • Department of Audits and Accounts • Myers & Stauffer • GHA and HTH • Hospital Advisory Committee • Issues: DCH welcomes the participation of the Hospital Advisory Committee, GHA and HTH in an advisory capacity with the understanding that DCH retains final authority regarding provider fee implementation.

6. Schedule Initial Work Group planning meeting • Discuss implementation schedule • Define functional/operational areas • Assign provider tax planning tasks to workgroup member • Issues: The implementation schedule must be internalized by all participants in order for the implementation to stay on track. Failure to adhere to an aggressive schedule will cause significant adverse effects on the hospital community and on revenue targets.

7. Implement Provider Fee Management • Define organizational locus of control • Define ongoing staffing requirements/levels • Define internal management criteria • Define escalation criteria and processes • Issues: DCH Financial Management is currently understaffed going into this project. Staff recruiting, training and project management must be given priority consideration in order for the provider fee to meet its goals.

8. Operationalize Provider Fee model development/maintenance • Define data elements • Define HFS data validation process • Define public use and data access parameters • Define tax model QC and maintenance requirements • Define tax model control and maintenance responsibilities • Issues: The Health Facilities Regulation (HFR) Hospital Financial Survey (HFS) has been identified as the sole source of data to support the provider fee. Steps must be taken to validate and insure the integrity of this data. Year-to-year updates of the HFS and annual reconciliation processes must be established.

9. Operationalize rate maintenance • Define FFS rate adjustment process • Define hospital OP rate adjustment process • Define hospital IP rate adjustment process • Define CMO rate pass-through process • Define actuarial adjustment by AON for pass-through rates • Define DCH-CMO language to insure rate pass-through • Issues: Agreement by all affected parties regarding the method of adjusting IP and OP rates is essential in order to maintain the integrity of the provider fee process.

10. Implement State Plan Amendment activities • Identify affected state plan sections • Draft necessary amendments • Draft necessary public notices • Obtain initial Board approval • Obtain final Board approval • Amend SPAs as necessary • File SPAs with CMS and Negotiate CMS approvals effective 7/1/10 • Issues: In order to meet implementation targets, it will be necessary to compress the usual public comment and Board approval cycles from 30 to 15 days.

11. Implement Provider tax exemption and waiver activities • Finalize Provider Fee Model • Identify necessary exemptions/waivers • Draft waiver documents • Draft necessary public notices • Obtain initial Board approval • Obtain final Board approval • Amend tax exemption waiver documents as necessary • File Provider Fee waiver documents with CMS and Negotiate CMS approval effective 7/1/10 • Issues: In order to meet implementation targets, it will be necessary to compress the usual public comment and Board approval cycles from 30 to 15 days.

12. Implement Provider Fee Communication/Education Plan • Identify the components of the Communication and Education Plan • Prepare Provider Fee Communication and Education Plan • Enlist support of GHA and HTH in Communication and Education Seminars • Issues: The provider fee program is complex at a number of levels and a communication and education plan must be developed that will relate to affected staff at all financial and operational levels in all hospitals.

13. Implement Provider Fee Accounting • Establish procedures for tracking Provider Fee accounts receivable • Establish procedures to determine IP and OP rate adjustments • Establish periodicity for provider tax assessments • Establish guidelines for late/non-payment and penalty assessment • Issues: Quarter-by-quarter fee estimates will be established in advance using the FY 2008 HFS. This will permit DCH to notify hospitals 30 days prior to the end of each quarter of the amount of the hospital assessment.. Payment in full will be due the last day of the quarter. Payments not received by the due date will be referred to Benefit Recovery where assessments plus penalties will be recouped.

14. Implement Provider Fee Reporting • Define necessary internal and external reports • Identify data sources needed to support reports • Identify organizational responsibilities for reporting/monitoring • Format and test reports • Issues: The Department of Audits and Accounts will be asked to work with DCH to create a hospital provider fee reporting systems similar to the one DOAA created for nursing home fees. Once the system is established, internal and external reporting processes will be established to ensure that collections are timely and referrals to Benefits Recovery are made within 30 days of non-payment.

15. Implement Provider Fee rate-setting and rate-maintenance • Determine offsetting rate increases for IP and OP by provider class • Draft necessary public notices for IP and OP rate adjustments • Obtain initial Board approvals for IP and OP rate adjustments • Obtain final Board approvals for IP and OP rate adjustments • File SPAs and negotiate approvals with CMS, as needed • Issues: Once initial rates are set, rate adequacy will need to be monitored to determine the variance between reimbursement and provider fees. Reimbursement rates will be established by class of provider with roll-forward adjustments made on an annual basis utilizing the results of each year’s HFS.

16. Implement Provider Fee Georgia Administrative Code modifications • Define Provider Fee system and dispute resolution process • Draft rule changes to implement the dispute resolution process • Present rule changes to Board for initial consideration • Draft and file public notice regarding any necessary rule change • Obtain final Board approval of any needed rule change • Assign responsibilities for staffing fair hearings and appeals • Issues: Hospitals will need an avenue to appeal determinations of final agency actions that they feel are adverse with regard to rate-setting and provider assessment. A 30 day appeals process should be permitted at the conclusion of each end-of-year rate settlement.

17. Function Policy Coordination Administrative Rules Financial Coordination Accounts Receivable Reporting Fines and Recoupment Operational Coordination Rate-Setting State Plan Amendments Waiver Filings Lead DCH Staff Jerry Dubberly Legal Staff (TBD) Scott Frederking TBD TBD Al Cusumano Alec Steele David Riddle / Brenda High TBD TBD DCH Staff Assignments