Part II: Federal Matching Fund Programs Available to Arizona Critical Access Hospitals

1. Part II: Federal Matching Fund Programs Available to Arizona Critical Access Hospitals Julie Nelson, Esq. The Nelson Law Group PLLC julie@nelsonlawsolutions.com www.nelsonlawsolutions.com The Nelson Law Group, PLLC

2. Overview • Federal Matching Fund Program Requirements • Federal Matching Fund Programs • Disproportionate Share (DSH) Intergovernmental Agreement • Safety Net Care Pool (SNCP) Intergovernmental Agreement • Q&A The Nelson Law Group, PLLC

3. Federal Matching Fund Program Requirements • Federal financial participation (federal matching funds) available for state health care funding programs when the state contributes at least 40% of Medicaid program costs (state funds/non-federal share) to the cost of the program. • “State funds” include state or local government funds appropriated directly or AHCCCS or transferred to AHCCCS by local governments or other public agencies, typically through Intergovernmental Agreements (IGAs). • “Local government” includes: city, county, special purpose district (hospital district), or other governmental unit that (1) has taxing authority, (2) has direct access to tax revenues, (3) is a state university teaching hospital with legislative appropriations, or (4) is an Indian tribe. The Nelson Law Group, PLLC

4. Federal Requirements, cont’d. • Provider Tax Programs • Health care taxes may be used for state share if (1) broad based, (2) uniformly imposed, and (3) there is no hold harmless provision (CMS may waive certain tax requirements). • Voluntary Donation Programs • State may accept “bona fide” donations and use as state share, but only if the donation has no direct or indirect relationship with health care providers. No relationship if donations not returned to individual providers, provider class, or entities related to the provider. Exception for donations of less than $5k for individual hospitals and $50k for hospital systems, but restrictions regarding returning funds to providers still apply. • Arizona (Section 1115 Waiver) Exception The Nelson Law Group, PLLC

5. Intergovernmental Agreements (IGAs) • Parties: AHCCCS and local government unit. • Beneficiary: CAH • Special terms and conditions • Public Entity warrants that, consistent with 42 C.F.R. Part 433, Subpart B, no portion of the funds transferred to AHCCCS are derived from (1) provider-related donations other than bona fide provider-related donations, or (2) health care-related taxes other than as permitted in Subpart B. • Public Entity agrees to provide AHCCCS with supporting documentation that provides a detailed description (including but not limited to the amount, source, and uses) and the legal basis for (1) each provider-related donation received by the Public Entity including all bona fide and presumed-to-be bona fide donations, and (2) all health care-related taxes collected. • If Public Entity fails to provide supporting documentation, or if any funds transferred by Public Entity are determined to be derived from provider-related donations or health care-related taxes such that CMS adjusts future grant awards to AHCCCS or disallows any expenditures claimed by AHCCCS, then Public Entity agrees to reimburse AHCCCS, upon demand by AHCCCS, in the amount of the adjustment or disallowance that is attributable to the impermissible provider-related donation and/or health care-related tax. The Nelson Law Group, PLLC

6. Federal Matching Programs Available to Arizona CAHs • CAH Pool • SAVE Pool • Disproportionate Share (DSH) • Proposition 202 Trauma and Emergency Services Fund • Electronic Health Record Incentives • Safety Net Care Pool (SNCP) The Nelson Law Group, PLLC

7. Disproportionate Share (DSH) • DSH payments provide financial assistance to hospitals that serve a large number of low-income patients (Medicaid/uninsured), including IHS hospitals. • Eligible hospitals determined based on the hospital’s Medicaid Inpatient Utilization Rate and other factors. DSH funds are distributed to hospitals through various pools. • AHCCCS DSH payments are the largest source of federal funding for uncompensated care. • Reimbursement capped at OBRA limit (uncompensated Medicaid costs + uncompensated uninsured costs) • DSH applications due April 15th of each year. • Payments typically made in the late summer/early Fall. The Nelson Law Group, PLLC

8. DSH IGA Funding (Pool 5) • Additional DSH reimbursement available if a “local government” entity provides the state share for the benefit of one or more hospitals through an IGA with AHCCCS (Pool 5). • Final (signed) IGA deadlines: • 2010 DSH: August 24, 2012 • 2011 DSH: April 15, 2013 • 2012 DSH: TBD The Nelson Law Group, PLLC

9. Safety Net Care Pool (SNCP) • Established in 2011 and approved by AHCCCS in 2012, reimburses participating hospitals for uncompensated care costs provided to AHCCCS members and the uninsured. • Eligible hospitals: Includes Arizona rural hospitals, safety net hospitals, and hospitals receiving disproportionate share payments and that have a local governmental entity sponsor (IGA model). • Approximately $332 million/yr. (federal and state), with a portion used to fund the “Kids Care II” program (2-3%). • Program expires January 1, 2014 (payments available through December 31, 2013). The Nelson Law Group, PLLC

10. SNCP • Process: • AHCCCS legal counsel IGA review/approval. • AHCCCS requests amendment to waiver to add additional hospital(s). • Implementation: • Local government (state match funds) due quarterly. • Uncompensated care cost limit, determined based on medical services furnished to AHCCCS eligible and uninsured individuals. • Payments made within 15 days of receipt of state match funds. • Annual reconciliation • Deadlines: • State waiver amendment deadline September 30, 2012 for FY 2012 SNCP payments. • State waiver amendment deadline September 30, 2013 for FY 2013 SNCP payments. The Nelson Law Group, PLLC

11. Next Steps • CAHs interested in any federal matching programs may obtain more information on AHCCCS’ website: http://www.azahcccs.gov/commercial/HospitalSupplements/HospitalSupplements.aspx • Arizona Rural Hospital Flexibility Program Resources/Assistance The Nelson Law Group, PLLC

12. Questions The Nelson Law Group, PLLC