Tuesday, August 11, 2020

Puerto Rico Medicare Reimbursement Rates to be Increased

By on January 18, 2016

SAN JUAN – The Centers for Medicare and Medicaid Services (CMS) informed hospitals in Puerto Rico that they will soon begin receiving the same basic reimbursement rate—known as the “base rate”—as hospitals in the states for treating Medicare patients.  The Consolidated Appropriations Act for fiscal year (FY) 2016, enacted in December 2015, included the language of H.R. 1417, the Puerto Rico Hospital Medicare Reimbursement Equity Act, which Resident Commissioner Pedro Pierluisi introduced in March 2015.

For the first time in the history of the Medicare program, which was established in 1965, Puerto Rico hospitals will essentially be treated the same as hospitals in the states with respect to how they are reimbursed for the services they provide.  

The Congressional Budget Office (CBO) estimates that, as a result of this legislative change, Puerto Rico hospitals will receive $618 million more in federal reimbursement payments between 2016 and 2025, an average of over $60 million per year.  The Consolidated Appropriations Act also included the language of H.R. 1225, the Puerto Rico Hospital HITECH Amendments, a bill Pierluisi introduced to make Puerto Rico hospitals eligible for the same bonus payments as hospitals in the states for adopting use of electronic health records. The CBO estimates that this legislative fix will increase payments to Puerto Rico hospitals by $266 million over the next 10 years.

On Dec. 18, President Obama signed into law the Consolidated Appropriations Act. Section 601, Modification of Medicare Inpatient Hospital Payment Rate for Puerto Rico Hospitals modifies the payment calculation with respect to operating costs of inpatient hospital services of a subsection: (d) Puerto Rico hospital for discharges on or after January 1, 2016.

CMS is currently revising the Inpatient Prospective Payment System (IPPS) FY 2016 Pricer to reflect the new payment calculation requirement. The amount of the payment with respect to the operating costs of inpatient hospital services of a Puerto Rico hospital for inpatient hospital discharges on or after Jan. 1 will be based on 0 percent of the applicable Puerto Rico percentage and 100 percent of the applicable federal percentage, CMS says in its provider news blog. In addition, the IPPS FY 2016 Pricer will include changes to certain FY 2016 IPPS operating rates and factors that result from the application of the new Puerto Rico hospital payment calculation requirement, which are applicable to all IPPS hospital discharges on or after Jan. 1.

CMS will also incorporate the revised IPPS rates into the Long-Term Care Hospital (LTCH) Pricer, as they are used for certain LTCH claims payments.

To allow sufficient time to develop and test, CMS will implement the IPPS and LTCH Pricers on April 4. Medicare Administrative Contractors (MACs) will reprocess IPPS inpatient claims from Puerto Rico and all other IPPS hospitals with a discharge date on or after Jan. 1. The MACs will also reprocess LTCH claims with a discharge date on or after Jan. 1 “due to the impact of the change,” CMS says, adding that Puerto Rico hospitals (as well as all other IPPS and LTCH hospitals) do not need to take any action. CMS says it expects to reprocess claims no later than June 30.

“On Thursday, CMS notified me it has informed Puerto Rico hospitals that increases in their reimbursement rates are forthcoming.  Although it will take several months for CMS to fully implement these changes, which require updates to the agency’s computer systems, the changes will be made retroactive to January 1, 2016—so that Puerto Rico hospitals will receive the higher reimbursement rates for all Medicare patients who are admitted on or after that date,” Pierluisi said.

To allow sufficient time to develop and test, CMS will implement the IPPS and LTCH Pricers on April 4. Medicare Administrative Contractors (MACs) will reprocess IPPS inpatient claims from Puerto Rico and all other IPPS hospitals with a discharge date on or after Jan. 1. The MACs will also reprocess LTCH claims with a discharge date on or after Jan. 1 “due to the impact of the change,” CMS says, adding that Puerto Rico hospitals (as well as all other IPPS and LTCH hospitals) do not need to take any action. CMS says it expects to reprocess claims no later than June 30.

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