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During 2012, the Centers for Medicare & Medicaid Services (CMS) proposed a rule that would update the Home Health Prospective Payment System (HH PPS) rates. This update included the national standardized 60-day episode rates, the national per-visit rates, the low-utilization payment amount (LUPA), and outlier payments under the Medicare prospective payment system for home health agencies effective January 1, 2013.
The continuing reform of the Massachusetts healthcare environment took effect on November 5, 2012 with the Chapter 224 of the Acts of 2012. This legislation sought to use the Commonwealth’s original reforms as the basis of a plan to reduce the growth rate of healthcare spending and improve overall patient care and quality.
The Patient Protection and Affordable Care Act (ACA) created Internal Revenue Code Section 501(r) which is applicable to tax-exempt hospitals. Section 501(r) created four new requirements for exempt hospitals.
The New Markets Tax Credit (NMTC) Program was established in 2000 as part of the Community Renewal Tax Relief Act of 2000. The goal of the program is to stimulate revitalization efforts of low-income communities across the United States. The NMTC Program provides tax credit incentives to investors for equity investments in certified Community Development Entities (CDEs), which invest in low-income communities. The credit equals 39% of the investment paid out (5% in each of the first three years, then 6% in the final four years, for a total of 39%) over seven years.
In 2011, the Budget Control Act of 2011 (the “Act”) was signed into law. The Act requires a 10 year reduction of all federal spending totaling $2.1 trillion with an increase in the debt ceiling by up to $2.4 trillion. Under the Act, the Center for Medicare and Medicaid Services (“CMS”) will implement a 2.0% sequestration reduction to all Medicare payments beginning on January 1, 2013. Effectively, Medicare providers will continue to bill Medicare normally, but will be paid at 98% for the 10 year period. Total savings related to Medicare payment reductions are estimated to be approximately $125 billion over the 10 years.
The Medicare tax, which has historically been limited to earned income, has been expanded in 2013 to apply to net investment income at a 3.8% rate. Specifically, the 3.8% Medicare tax will apply to the lower of net investment income or modified adjusted gross income in excess of $250,000 for joint returns and surviving spouses, $125,000 for separate returns, and $200,000 in all other cases. Investment income includes interest, dividends, annuities, royalties, and capital gains. Rents from a passive activity are subject to the Medicare tax but rents from an active trade or business are not. In general, rents are not automatically passive in the case of real estate professionals (e.g., construction, real property brokerage).
The evolution of payment systems, provider agreements, cost control initiatives and strategic alliances underscores the significance of information management systems. Today’s financial managers must have the ability to readily access critical measurement tools to evaluate operations, clinical outcomes, and the ultimate costs of service lines and programs.
In the current environment providers are looking for opportunities to maximize and strengthen their financial and strategic positioning for the future. One opportunity is a strategic alliance that brings together two or more providers to enhance the potential reimbursements for all parties involved. The type of analysis used to assess these potential alliances involves comparing each provider’s contractual rates and fee schedule. The comparison includes calculating expected reimbursement under each provider’s rate schedules, by payor, for an agreed upon time frame and volume/data set to determine rate differentials, if any, and any other benefits of an alliance.
The FASB has issued ASU 2010-24 for Health Care entities to change the way insurance claims are being reported. The Accounting Standards Update is effective for fiscal years beginning after December 31, 2010. The intention of the update is to mitigate the current diversity in practice related to the accounting by health care entities for medical malpractice claims and similar liabilities (and their related anticipated insurance recoveries).
In July 2011, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2011-07, “Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities”. Healthcare organizations have historically recognized a significant amount of patient service revenue at the time the service was performed and did not evaluate the likelihood of collection. The resulting accounting was to report a gross-up of revenues along with a provision for bad debts in operating expenses.
MassHealth issued Long Term Care Facility Bulletin 106 in August, providing instructions for the submission of the annual accounting for Personal Needs Allowances (PNA). The forms will be made available online.
The Healthcare Financial Management Association (HFMA) recently published an analysis to clarify for healthcare providers the accounting for incentive payments received under the Health Information Technology for Economic and Clinical Health (HITECH) Act.
The ultimate fate of the Sustainable Growth Rate formula has again been tabled by Congress. In December 2011 Congress passed legislation to extend the payment cut override through February 2012.
In 2011, the Centers for Medicare and Medicaid Services (CMS) issued changes to the Provider Reimbursement Manual pertaining to revisions being made to the CMS-2540-10, the Medicare Skilled Nursing Facility and Skilled Nursing Facility Complex Cost Report. CMS had not made changes to this form since 1996. These changes are effective for cost reports for years beginning on or after December 1, 2010.
As we wrap up several Medicare cost reports using the new CMS 2552-10, we wanted to clarify our interpretation of the instructions for the Worksheet S-10, Hospital Uncompensated Care and Indigent Care Data and provide some additional observations about the format of the form.
On Friday March 16th, 2012, the Department of Health and Human Services (HHS) released a final rule that implements numerous provisions of the Accountable Care Act of 2010 relating to expansion and simplification of the eligibility and enrollment rules for the Medicaid Program and Children's Health Insurance Program (CHIP). The final rule effective January 1, 2014, will implement a minimum Medicaid eligibility income level of 133% of the Federal Poverty Level (FPL). The current FPL rate is $14,856 for an individual and $30,656 for a family of four.
In September 2011, members of the F&D healthcare group presented an update on changes to the CMS Form 2552-10, Hospital and Hospital Health Care Complex Cost Report (the Hospital Medicare Cost Report), and the annual update on the Inpatient Prospective Payment System.
The Centers for Medicare and Medicaid Services (CMS) published the final Medicare Outpatient Prospective Payment System (OPPS) rule for calendar year (CY) 2012 on November 1, 2011. The final changes to the Medicare OPPS are effective January 1, 2012 unless otherwise noted.
The Centers for Medicare and Medicaid Services (CMS) released its Medicaid RACs final rule on September 15, 2011 after delaying its previous expected implementation on April 1st. The Medicaid RAC program’s purpose is to fight Medicaid fraud and abuse, sharing many initiatives that the Medicare RAC program implements. According to Health and Human Services, the new initiative will save taxpayers an estimated $2.1 billion over the next five years, of which $900 million will be returned to the states.
Changes to Presentation and Disclosure of Patient Service Revenue and Related Accounts for Certain Health Care Entities - (ASU) No. 2011-07
In July 2011, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2011-07, Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities.
In August 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-24, “Presentation of Insurance Claims and Related Insurance Recoveries”.
The goal of the Patient Protection and Affordable Care Act (ACA) passed in March 2010 was to improve access to healthcare, and to change the healthcare delivery system by improving quality and reducing costs including improving the use of technology.
The purpose of this article is to provide an update as to some of the changes that have been implemented effective September 23, 2010 along with other key points relating to healthcare reform.
By now you are aware of the “Patient Protection and Affordable Care Act”, which was signed into law on March 23, 2010. As you know, this law is an incredibly complex piece of legislation that impacts nearly all Americans.
The Internal Revenue Service (IRS) has made revisions to the 2010 Return of Organization Exempt from Income Tax Forms 990 and 990-EZ, instructions, and schedules from the prior year’s form.
The Financial Accounting Standards Board (the “Board”) issued two accounting standard updates in August 2010. The first one is Number 2010-23, “Measuring Charity Care for Disclosure”. This standard has been issued in order to clarify the measurement basis used in the disclosure of charity care in financial statement footnotes.
The scope of this article will address several key components that will impact you as a healthcare provider. You’ve probably already begun to study the legislation and how it will impact the organization.
Return of Organization Exempt from Income Tax IRS Form 990 – Form and Instructions Revisions - August 2008
With the pay-for-performance reimbursement model gaining ground, Medicare’s new Physician Quality Reporting Initiative offers a risk-free way to start. Or does it? - May 2007
Healthcare Newsletters Archive
Rural Hospital's Bulletin: A Publication of the Feeley & Driscoll Health Care Services Group (2003)
NonProfit Tax Services