Uncompensated Care Analytics

In 2015, Healthcare Payment Specialists (HPS) launched its Uncompensated Care Analytics (UCA) solution. This solution was created with the anticipation that Worksheet S-10 would become an important component of the Medicare Disproportionate Share (DSH) formula, a position that the Centers for Medicare and Medicaid Services (CMS) just adopted within the FY 2017 Hospital Inpatient PPS Proposed Rule.

The Critical Role of Worksheet S-10

The FY 2017 Hospital Inpatient PPS Proposed Rule, released by CMS in April 2016, lays out the new role of Worksheet S-10:

  • Worksheet S-10 will be incorporated into the uncompensated care payment portion of the Medicare DSH calculation, effective FY 2018. Line 30 of Worksheet S-10 will be used in calculation of Factor 3 of the uncompensated care payment. It will be used along with low-income insured patient days for FY 2018 and FY 2019 and will become the sole source of uncompensated care payment starting in FY 2020.
  • CMS will use data from FY 2014 in the initial introduction of Worksheet S-10. As shown in the table below, the Factor 3 calculations for FY 2017 and beyond will be based on data from three (3) cost reporting periods. For Worksheet S-10, the initial cost reporting period that will be used is FY 2014.

What This Means for Hospitals

The implication of the proposed rule for Medicare DSH hospitals is significant. The adoption of Worksheet S-10 as the source for uncompensated care costs for the Medicare DSH formula makes it imperative for hospitals to ensure the accuracy of their Worksheet S-10 data and that they have appropriate documentation available in the event of an audit. Failure to complete either of these tasks will place Medicare DSH funding at risk.

The proposed implementation of Worksheet S-10 — utilizing Worksheet S-10 data starting with FY 2014 — means that hospitals need to review prior Worksheet S-10s, in addition to focusing on their processes going forward.

HPS Solution

With deep expertise in complex and data-intensive cost report issues, such as Medicare Bad Debt and Medicare DSH, HPS is ideally positioned to work with hospitals to deliver Worksheet S-10s that are complete and accurate. Our UCA solution provides hospitals with complete documentation, an analysis of the impact that your Worksheet S-10 results will have on uncompensated care and EHR incentive payments, and benchmarking against peer hospitals.