HCAP-RELATED HOSPITAL FREE CARE
FREQUENTLY ASKED QUESTIONS
The OHA member resource for answers to the most frequently asked questions regarding the Ohio Hospital Care Assurance Program (HCAP), its related hospital free care requirement and Ohio Medicaid DSH Program Audits.
These FAQs reflect Ohio Administrative Code (OAC) 5101:3-2-07.17, established by the Ohio Department of Medicaid (ODM) on the allowance and documentation of free and uninsured hospital services related to the Hospital Care Assurance Program (HCAP).
They are designed to provide guidance to hospitals, but they do not reflect any particular legal interpretation on the part of OHA or ODM and are not intended to provide counsel to consumers about the state “free care” rule. OHA recommends hospital members review their “HCAP” and other charity care policies and procedures with legal counsel to ensure they are in compliance with all state and federal laws and rules.
Updated July 1, 2013.
Any new or substantially updated FAQs is noted with the date 07/01/13 at the end and are effective for services or admissions on and after July 1, 2013, unless otherwise indicated by the retroactive application of a CMS rule or definition.
All public rules and provider manuals are available on the ODM website. Go to “Ohio Health Plans – Provider;” then to “(more…)”; then to “Hospital Handbook;” then to “Hospital Services Ohio Administrative Code.”
View HCAP “free care rule” (OAC 5101:3-2-07.17)
View ODM and OHA recommended free care application
View Medicaid-covered UB-04 Revenue Codes
View HCAP data review Agreed Upon Procedures (go to Appendix A, page 13)
PUBLIC RULES AND INCOME GUIDELINES
1.1 Which rule explains how hospitals must manage public notices and applications for free care, and where can I get a copy of it?
The rule number is OAC 5101:3-2-07.17.
1.2 Which rule explains how a hospital’s auditor must conduct an annual review of the data on Medicaid Cost Report Schedule F and where can I get a copy of it?
The rule number is OAC 5101:3-2-23. The data-review agreed-upon-procedures are in Appendix HYPERLINK “http://emanuals.odjfs.state.oh.us/emanuals/DataImages.srv/emanuals/pdf/pdf_forms/3-2-23APPXA.PDF”A starting on page 13 of the rule.
1.3 Where can I get the federal poverty income level (FPL) guidelines?
Federal poverty income guidelines are available from the Health & Human Services website. They go into effect each year on the date they were published in the Federal Register. Eligibility for inpatient admissions or outpatient services under OAC 5101:3-2-07.17 delivered on or after that publication date should be judged by the new guidelines. Admissions or services delivered prior to the publication date should be judged by the guidelines in place on the date of admission or service.
APPLICATIONS AND ELIGIBILITY FOR FREE CARE
2.0 I am an Ohio resident and have a bill from an Ohio hospital that I cannot pay. How do I apply for free or discounted care?
Contact the hospital’s business office and ask for an HCAP application. The hospital will review your application and may ask for income documentation. If your documented family income is below the federal poverty income limits in place on the date of service or admission, the hospital will write off its portion of the bill. Please keep in mind that the state “free care rule” does not apply to bills from doctors or other medical care providers, nor does it apply to residents of other states or out-of-state hospitals. Also remember that most hospitals have discounted payment programs for patients whose incomes are above the federal poverty limits, so if you are not eligible for HCAP be sure to inquire about other charity care policies or programs the hospital may have available to help.
2.1 Is there a standard application for free care?
There is no required application, but OHA and ODJFS recommend this sample.
2.2a Is there a limit to the amount of time a hospital must take applications for free care?
OAC 5101:3-2-07.17 permits a hospital to adopt a three-year limit on applications. Note that the three-year limit starts on the date of the first follow-up notice sent to a patient, not the date of service. It is expected each hospital that adopts the three-year limit will clearly state this in its written HCAP/free care policy (see FAQs 2.2b & 3.2a) and be consistent in its application.
2.2c Can an application for free care be taken over the telephone or the internet?
In most cases no. Hospitals are permitted to take an application over the phone or the internet only as a last resort because an application taken by phone cannot be signed by the patient or authorized applicant.
If an application is taken over the telephone, the interviewer is expected to ask the questions exactly as they are listed on the recommended free care application (see FAQ 2.1) and to mail a copy of the completed application to the patient or authorized applicant to sign and return, so the hospital has the attestation for its records. If there is some reason the patient/applicant cannot sign the application, the interviewer is expected to sign the form him/herself and document why the patient/applicant was not able to sign.
2.2d Are free care applications distributed by or completed with the help of community legal aid or patient advocacy groups acceptable?
The issue is not where a patient gets an application or who helps him/her complete it, but rather how the hospital validates the data against the requirements of OAC 5101:3-2-07.17 and the hospital’s internal policy on documentation. The hospital also must confirm the signature is the patient’s, or that of someone legally able to speak for the patient. As such, if a patient presents a completed application, the hospital should ensure the data on the application conforms to the elements outlined in FAQ 2.1, confirm the data was correct as of the date of service, and request the patient or someone legally able to speak for the patient sign (or re-sign) and date (or re-date) the application.
2.3 May a hospital require an uninsured patient to apply for Medicaid before it accepts an application for free care?
2.5 If a patient account has gone to collection, can the patient still apply for free care?
Yes. While the application time limits outlined in FAQ 2.2a apply, if a patient is retroactively found to have been eligible for free care on the date of admission or service the account must be recalled from collection and written off (see FAQ 6.4 for additional information on collection fees and court costs).
2.6a. Is a separate application required for a patient with multiple outpatient encounters or inpatient admissions?
OAC 5101:3-2-07.17 (B)(3) permits a hospital to apply an approved free care application to any outpatient service delivered up to 90 days from the date of the initial outpatient service. It is also not necessary to take a new application for an inpatient re-admission so long as the re-admission is within 45 days of the date of the initial admission and it is for the same underlying condition. Eligibility for all other inpatient admissions must be judged separately and require new free care applications.
2.6b Can an application for an inpatient hospital admission also be used to cover any outpatient care that is required post-discharge?
Yes, an inpatient application can also be used to cover related outpatient services for the patient in the 90-day period immediately following the first day of the inpatient admission.
2.6c Does an approved free care application apply to services delivered by other hospitals during the 90 and 45 day periods immediately following an outpatient encounter or inpatient admission?
No, unless the two hospitals are part of one system and their internal policies permit a shared application for follow-up care related to the initial outpatient encounter or inpatient admission.
2.7a Who can sign a free care application and attest to the accuracy of the information it contains?
The application should be signed by the patient or someone who has a legal right to represent the patient, such as a parent or spouse.
2.7b Can a parent sign a free care application for an adult child (18 or older)?
No, unless the parent has been appointed by the Court as the adult “child’s” legal representative or guardian.
2.7c Who can apply for a deceased patient?
An application for free care must always be attested to by someone who is legally able to speak for the patient, so the executor of the estate should apply. If there is no estate the patient’s next of kin could sign and attest to the validity of the information on the application. (July 1, 2013)
2.8 Does a signed application for free care have to be notarized?
2.9 Occasionally a Medicaid managed care patient will go to an out-of-panel hospital for elective care. If the out-of-panel hospital puts the patient on notice that (s)he will be responsible for the charges, as required by OAC 5101:3-26-11, can the patient later apply for free care?
No. If a patient is eligible for Medicaid, including Medicaid managed care, (s)he cannot apply for HCAP and the hospital cannot include the charges for that admission or service in any field on Schedule F.
2.9a If a patient is only eligible for Medicaid to cover family planning services, as outlined in OAC5101:3-21-02, 5101:3-21-02.1 & 5101:3-21-02.3, can (s)he apply for HCAP for service not covered by the family planning services program?
Yes, because his/her Medicaid eligibility is limited to the specific services covered by the program as outlined in the rules linked above. (7/1/13)
2.10 Can a patient with health care coverage other than Medicaid who has self-pay charges arising from an out-of-panel encounter apply for free care?
Yes. Note that, if approved, the charges should be listed in the hospital’s log as “with insurance.”
2.11 OAC 5101:3-2-07.17 requires a signed application. Is an electronically stored or faxed copy of the signed original application acceptable for audit, or must the hospital keep the original?
A faxed or electronically stored copy of the original application is acceptable, providing:
• The electronic document is stored in a PDF file or in some other manner that is not easily altered after it is created,
• The fax or electronically stored application is available as outlined in OAC 5101:3-2-07.17 (B)(3).
Note that a hospital will lose credit for the uninsured account if the hospital is unable to retrieve an electronically stored application for review.
2.12 Can a patient who is eligible for Medicaid via the “spend-down” provision apply for free care? Is a hospital obligated to take into account the patient’s spend-down amount in the calculation of eligible free care?
Every patient eligible for Medicaid via spend-down has a specific date in the month on which Medicaid coverage starts and that date can be verified on the patient’s Medicaid card for that month or via the ODM eligibility verification system. Any service or admission prior to that date is considered self-pay and is eligible for free care. Any service or admission after that date is not. Do not net the spend-down amount from the charges reported for the patient in the period (s)he was not eligible for Medicaid, unless the patient actually pays that spend-down amount to the hospital.
2.12a Is the patient with a spend-down amount that is written off to HCAP considered insured or uninsured?
Since the amount that is being written off to HCAP reflects the period before the patient had Medicaid coverage, (s)he is considered to be uninsured. (July 1, 2013)
2.13 Is a “Sanctioned” Medicaid enrollee eligible for free care?
“Sanction” means the individual did not follow through with an Ohio Works First activity for three months or more and has, as such, lost Medicaid eligibility for a period of up to six months. Since they are not eligible for Medicaid during the sanctioned period, a patient could apply for free care for an admission or service date that falls within the period.
2.14 Is a patient who is under the custody of the county Children’s Services Bureau eligible for free care?
No. The CSB is responsible for medically necessary care the child receives.
2.15 Is a prisoner or detainee eligible for free care?
3.1 What documentation is required to support an application for free care?
Each hospital must have an internal policy outlining its documentation requirements. At the very least a hospital should require an application that contains all data elements contained in the sample application (see FAQ 2.1), which has been signed by the patient or by someone who has a legal right to represent the patient.
No additional documentation is necessary unless a hospital’s internal policy requires it. If a signed application is all a hospital requires, and the patient/applicant reports zero income for the period in question, ODJFS recommends the hospital document how the applicant and his family are surviving at the bottom of the application.
Hospitals have the right to deny a signed application if they can document a reasonable doubt that the applicant is telling the truth.
If a hospital’s policy states additional documentation is required it is recommended the hospital adopt a hierarchical approach that includes:
• A completed application, signed by the patient or his/her authorized representative, and hard copy proof of income, such as pay stubs, bank statements or a letter from the applicant’s employer. If this is not available,
• A completed application, signed by the patient or his/her authorized representative, or an application completed by a hospital representative that is clearly documented to indicate why the patient or authorized applicant was not able to sign (see FAQ 2.2c).
3.2a. Must a hospital have a written free care policy?
Yes. OAC 5101:3-2-23 requires an auditor to use the hospital’s internal policy to judge its compliance with OAC 5101:3-2-07.17. As such, each hospital must establish a policy that, at least, outlines the application process and what types of documentation, if any, it requires to verify family size and income.
3.2b If a hospital decides to change its internal policy, when should the policy change be implemented?
The policy change cannot be implemented retroactively. The hospital must choose a specific date on which to change its policy and all applications for dates of service on or after that implementation date must be judged under the revised documentation standards.
3.3 Is an income tax return acceptable income documentation?
No. By its nature, an income tax return does not cover the date of service, which OAC 5101:3-2-07.17 requires to be the basis for determining eligibility, and a tax return defines family and income differently. So, other than outlined in FAQ 3.4, a tax return is not a recommended form of documentation. But if a hospital requires documentation and a tax return is all a patient can produce to document his/her income, it may be considered backup for the signed, sworn statement of income contained in the application. Just be sure any decision of eligibility is based on income and family size as defined in OAC 5101:3-2-07.17, not the federal tax code.
4.1 Should a hospital include a spouse who does not live in the same home as his/her spouse and/or children in the patient’s “family?”
Yes. OAC 5101:3-2-07.17 states “a “family” shall include the patient, the patient’s spouse (regardless of whether they live in the home), and all of the patient’s children, natural or adoptive, under the age of eighteen who live in the home. If the patient is under the age of eighteen, the “family” shall include the patient, the patient’s natural or adoptive parent(s) (regardless of whether they live in the home), and the parent(s)’ children, natural or adoptive under the age of eighteen who live in the home.”
4.2 Regarding FAQ 4.1: What if a patient or the patient’s parent is still married, but the patient or patient’s parent cannot locate his/her spouse?
OAC 5101:3-2-07.17 instructs a hospital to include the still-married spouse in the “family” count, regardless of where (s)he lives.
4.3 Does a common-law marriage count?
No. Ohio law stopped recognizing common-law marriages on Oct. 1, 1991, although any persons who entered into a common-law marriage before that date were grandfathered into the revised law and their marriage is still recognized. (July 1, 2013)
4.4 What if the patient or his/her representative states the spouses are “legally separated”
There is no such status in Ohio law. Count both parents.
4.5 Do grandparents, step-parents or “legal guardians” count as part of a minor patient’s HCAP “family?”
No. While any of the above could be part of a minor patient’s household and may in fact contribute to the patient’s livelihood, OAC 5101:3-2-07.17 states they may not be counted as part of the patient’s “family” unless they are related by birth or formal adoption. Further, in most cases where a child is the ward of the Court and is placed in “legal guardianship” healthcare is provided by the court or the state.
4.6 A patient’s parent states his/her former spouse was given the responsibility to provide for the minor child’s healthcare in a decree of divorce or separation. Do we count both parents as part of the HCAP “family?”
Yes. One parent’s support-order has no bearing on the requirements of OAC 5101:3-2-07.17.
4.7 Often divorced parents share custody of minor children. If the patient is not residing with his/her natural or adopted siblings on the date of service, do we count the siblings in the patient’s HCAP “family?”
No. OAC 5101:3-2-07.17 indicates only siblings that reside in the patient’s home can be counted in his/her “family.” In the case of joint custody, count only the natural or adopted siblings that actually resided in the patient’s home on the date of service as part of his/her “family.”
4.8 Is a 18-year old high-school student living in his/her parents’ home considered part of the patient’s family?
No. Regardless of the living arrangements, any patient 18 or over is considered the basis for his/her own “family.” Only count his/her spouse, if there is one, and any of his/her natural or adopted children.
4.9 If a patient gives birth during an admission, is the baby counted as part of the ‘family’ for purposes of determining eligibility for free care?
No, since OAC 5101:3-2-07.17(B)(1) indicates the children must reside in the home to be counted as part of the “family” (which the newborn, as yet, does not), and (B(2)(a) indicates income for the family is to be counted for the period “immediately preceding” the date of service or admission. (July 1, 2013)
5.1 How long must a patient have lived in Ohio to qualify for free care?
OAC 5101:3-2-07.17 does not set a standard for residency, other than stating the patient must be “living in Ohio voluntarily.” ODM allows hospitals to include temporary residents, such as students or migrant workers, and patients who are temporarily residing with in-state relatives. What is not permitted is the inclusion of out-of-state patients who are on vacation in Ohio, or any patient who has come to Ohio solely to receive medical care.
5.2 Can an illegal alien qualify for free care?
Yes, assuming s(he) meets the residency requirement outlined in FAQ 5.1.
5.3 Do the free care residency requirements apply to accounts with family incomes above the federal poverty income limits?
5.4 Is a prisoner or detainee eligible for free care?
CALCULATION OF INCOME
6.1 Is there any limit to what can be considered income?
OAC 5101:3-2-07.17 considers income to be total salaries, wages and all cash receipts before taxes. Reasonable business expenses may be deducted for self-employed patients or their families. However, the rule does not exempt other sources of non-wage income. So, all sources of income, including but not limited to, alimony, child support, veterans’ benefits and social security should all be counted.
Note that child support, SSI and Social Security Disability payments for patients must be handled differently than other forms of non-wage income. OMA has advised OHA that child support, SSI and SSD payments may be counted as income for a family only when the patient is the intended recipient of that support payment. That is, if child support, SSI or disability is involved and the patient is the sole intended family member designated to receive that support, the family size would remain the same but you would not count the support as income for other family members.
6.2a Are a patient’s assets taken into consideration as income?
6.2b Are withdrawals from a savings account then counted as income? What about interest and dividends?
Withdrawals from an asset such as a savings account or brokerage account would not be considered income. However, interest and dividends on a non-retirement savings or brokerage account would be considered income. See FAQ 6.2c for treatment of retirement accounts.
6.2c The patient has a retirement account [IRA, 401(k), 403(b)]. How should these be treated?
Funds in a retirement account would be considered an asset. Any distributions from a retirement account, monthly or lump-sum, should be treated as income, as they were not previously taxed. Interest and dividends paid directly to a retirement account would not be considered income until withdrawn.
6.3 Should a hospital take into account a patient’s or his/her family’s tax returns to determine income?
Generally, no. (see FAQ 3.3).
6.4 Are grants, scholarships and/ or housing allowances considered income?
Yes, if they are paid directly to the student/patient. Do not count any scholarship, or grant or allowance that is paid directly to the school or housing authority/landlord as income.
6.5 OAC 5101:3-2-07.17 lists two ways to calculate income: three months prior to the date of service multiplied by four and 12 months prior to the date of service multiplied by one. May a hospital choose one or the other methodologies, or must it calculate income both ways? What if calculating income both ways results in conflicting eligibility determinations? What if the patient cannot supply documentation to support both methodologies?
A hospital must calculate income using both methodologies and use the result that is most beneficial for the patient to support eligibility for free care. As such, if using both methodologies results in conflicting eligibility determinations, use the one that allows the patient to qualify.
If a hospital’s policy demands documentation and the patient can only document one of the methodologies, approve the application based on the available documentation, or consider using a signed application (see FAQ 2.1)
6.6a Should a hospital count the income of a spouse who does not live in the same home as his/her spouse and/or children?
Yes. OAC 5101:3-2-07.17 states “a “family” shall include the patient, the patient’s spouse (regardless of whether they live in the home), and all of the patient’s children, natural or adoptive, under the age of eighteen who live in the home. If the patient is under the age of eighteen, the “family” shall include the patient, the patient’s natural or adoptive parent(s) (regardless of whether they live in the home), and the parent(s) children, natural or adoptive under the age of eighteen who live in the home. (See FAQ 4.1)
6.6b Regarding FAQ 6.6a: What if a patient or the patient’s parent is still married, but the patient or patient’s parent cannot locate his/her spouse? Similarly, what if the patient or patient’s parent can locate his or her spouse, but the spouse does not, or will not, contribute to the “family’s” income?
In both instances, OAC 5101:3-2-07.17 instructs a hospital to include the still married spouse in the “family” count, regardless of where (s)he lives. If (s)he does not contribute income to the family, none should be reported on the signed application or counted in the calculation of the family’s income.
6.7 How are “reasonable” business expenses defined for a self-employed applicant?
OAC 5101:3-2-07.17 does not specify which business expenses can be deducted from a self-employed patient’s income. Hospitals are advised to use common sense and the applicant’s most recent federal income tax return as guidance regarding which business expenses are deductible.
6.8 My patient has a health savings account or a health flexible spending account. Is (s)he required to spend down the account before applying for free care?
OAC 5101:3-2-07.17 does not require a patient to exhaust HSAs and FSAs before applying for free care. OHA will investigate this further the next time the rule is re-filed, but in the interim, OHA recommends hospitals permit the patient to apply his/her HSA and FSA funds to bills for other, “non-hospital-level” services related to the encounter or admission.
6.9 An applicant’s pay stub indicates part of his/her “pay” is reimbursement for mileage. Is this portion considered income?
No, since “mileage” is reimbursement for business-related expenses and is not subject to state or federal income taxes. (July 1, 2013)
COVERED MEDICAL SERVICES
7.1 OAC 5101:3-2-07.17 allows a hospital to include only medically necessary, “hospital-level” services in HCAP-related accounts. How does a hospital determine which services are considered “hospital level?”
The most important indicator is whether Medicaid would have covered the service had it been billed on a UB-04 using the hospital’s provider number. ODM maintains a list of Medicaid-covered UB-92 Revenue Codes in Attachment A to OAC 5101:3-2-02. Hospitals should use the list of covered Medicaid codes as a general indicator of what is considered covered “hospital-level” services. This requirement applies to all accounts, under and over 100% of the federal poverty income guidelines that are logged and reported in any field on Medicaid Cost Report Schedule F.
7.1a Are unpaid deductible and coinsurance amounts from a covered service or admission permitted under CMS’ definition of an “uninsured” patient?
No. In its Jan. 2012 Proposed rule: Medicaid Program; Disproportionate Share Hospital Payments—Uninsured Definition CMS states: costs associated with bad debt, including any unpaid coinsurance and deductibles, and payer discounts cannot be included in calculating the hospital-specific DSH limit for individuals with a source of third party coverage.” As such, unpaid deductibles and coinsurance amounts must be recorded in Schedule F and the supporting logs as “with insurance.” (July 1, 2013, retroactive to Jan. 18, 2012)
7.2 If an account has gone to collection, or the hospital has gone to court to enforce collection, and the patient later is found eligible for free care on the date of service, must the hospital write off the collection fees and court costs?
No. Collection fees and court costs are not considered hospital-level services and may not be included in an HCAP-related account. They remain the patient’s responsibility, regardless of his/her eligibility for free care.
7.3 Are experimental drugs and procedures covered under the free care rule?
No, and if the principal reason for an inpatient admission or outpatient encounter was the experimental drug or procedure, then the entire admission or encounter would not be considered a medically necessary, Medicaid-covered service.
7.4 Are routine-care services delivered in conjunction with a clinical trial covered under the free care rule?
Per OAC 5101:3-2-03 (A)(2)(g), services of a research nature, services which are experimental and not in accordance with customary standards of medical practice, or services which are not commonly used are not covered. However, a patient may apply for routine-care charges delivered during a clinical trial related to:
• Items or services that are typically provided absent a clinical trial (i.e., medically necessary conventional care)
• Items and services that are medically necessary for the diagnosis or treatment of complications arising from the provision of an investigational item or service.
7.5 Appendix A of OAC 5101:3-2-02 indicates that dental services billed under UB92 Revenue Code 0512 (Dental Clinic) are covered. Does this mean all dental services, including routine and preventative dental services, performed in a hospital-based dental clinic are covered under the free care rule?
Generally speaking, no. OAC 5101:3-2-03 (A)(2)(h) states that dental services are only covered in a hospital setting when “the nature of the surgery or the condition of the patient precludes performing the procedure in the dentist’s office or other non-hospital outpatient setting and the inpatient or outpatient service is a Medicaid covered service.” As such, it would exclude any diagnostic or preventative dental services delivered in a hospital setting.
7.6 How does a hospital determine whether a procedure subject to pre-review by ODJFS—such as elective bariatric surgery—is covered by the free care rule?
In general, whether an individual service or procedure is eligible for free care hinges on two factors: whether the care is medically necessary and whether Medicaid covers the service for its enrollees. When considering a service subject to Medicaid pre-certification, a hospital must make the same assessment ODM would have made, had it been the payer. That is, whether the care is medically necessary, versus being done for cosmetic or aesthetic reasons, or for patient convenience.
In OAC 5101:3-2-02 ODM defines medical necessity as: “services which are necessary for the diagnosis or treatment of disease, illness, or injury and without which the patient can be expected to suffer prolonged, increased or new morbidity, impairment of function, dysfunction of a body organ or part or significant pain and discomfort. A medically necessary service must:
(a) Meet accepted standards of medical practice;
(b) Be appropriate to the illness or injury for which it is performed as to type of service and expected outcome;
(c) Be appropriate to the intensity of service and level of setting;
(d) Provide unique, essential, and appropriate information when used for diagnostic purposes.”
If the patient’s primary physician will document that the service is medically necessary as defined in OAC 5101:3-2-02, then it is also eligible for free care.
PATIENT ACCOUNTING AND MEDICAID COST REPORTING
8.1 How should a hospital’s Medicaid DSH data logs be organized?
CMS requires Medicaid DSH logs to be formatted as outlined in the Patient Log Templates on its OMA’s Ohio Medicaid Cost Report homepage. (July 1, 2013, retroactive to SFY 2011 Medicaid Cost Reports and logs.)
8.2a If an inpatient admission or series outpatient encounter crosses two hospital fiscal years, in which fiscal year should the uninsured charges be recorded in Cost Report Schedule F and the related data logs?
Uninsured care charges should be recorded in the cost report and logs for the fiscal year in which the discharge date or service date occurred. This will require split-billing any series outpatient claim that crosses fiscal years. (July 1, 2013, retroactive to SFY 2011)
8.2b Do hospitals get credit for old patient accounts that are written off to HCAP?
By “old” we are describing patient accounts with dates of service prior to an open cost reporting period, and logs and the corresponding Medicaid Cost Report Schedule F. While a closed Medicaid Cost Report cannot be edited to include additional uninsured charges or payments, these charges and payments can be included with the Schedule F patient level data submitted to Myers & Stauffer for the Medicaid DSH audit for that Cost Report year, and will be reflected in the hospital’s DSH audit results. Once that audit is completed, that year is considered closed and final. (July 1, 2013, retroactive to SFY 2011 Medicaid Cost Reports and logs)
8.3 If a patient is on Disability Assistance on the date of service, but later is retroactively made eligible for Medicaid after the hospital’s Medicaid Cost Report for that period is filed, can the hospital bill the account to Medicaid?
Yes. OAC 5101:3-2-23 Appendix A, permits a hospital to bill for accounts that are pending-Medicaid and retroactively made eligible after the cost report is filed. This retroactive eligibility determination is no different.
8.4 How would a hospital log the recovery of a bad debt.
All payments received on any account reported as uninsured in any reporting period must be included in the Cost Report that covers the date the recovery or payment was received. (July 1, 2103 retroactive to SFY 2011)
8.4a How should a hospital report a lump sum, bad debt recovery that cannot be tracked back to individual patient accounts?
All payments should be included in the Cost Report that covers the date the payment was received. If a lump sum recovery covers both accounts that were claimed as uninsured and accounts that were not claimed as uninsured, a prorated portion of the recovery that corresponds to the charges claimed as uninsured should be reported. (July 1, 2013)
8.5a When is a patient to be considered “with insurance?”
A patient is considered to be “with insurance” only when the service is within a covered benefit package in a group health plan or other health insurance coverage, and is not covered by another legally liable third party.” (July 1, 2013, retroactive to Jan. 18, 2012).
8.5b Would a self-pay deductible or coinsurance amount be logged as with or without insurance?
While a deductible or co-insurance amount is the patient’s responsibility (s)he is nonetheless insured for so the entry would be logged as “with insurance.”
8.5c Are self-pay charges for a managed–care patient who has had services out of network considered to be with or without insurance?
Assuming the patient is not eligible for Medicaid and enrolled in Medicaid managed care (see FAQs 2.9 & 2.10) any covered self-pay charges for a managed care patient who went out of network would be considered “with insurance.”
8.5d Is a patient covered by workers’ compensation considered to be “with insurance?”
Yes, as long as the services provided were covered by worker’s compensation.
8.6 In some cases payers reimburse hospitals on a “global” fee basis, that is, the payment represents both the technical and professional components of a bill. If a patient is applying for free care for an unpaid portion of a bill that was paid globally, how does a hospital determine how much to deduct from the payment to represent the professional portion?
Figure out how much of the total charges represent professional services and apply the same ratio to the payment.
8.7a Are hospitals permitted to include accounts written off as a result of their internal charity-care programs in the >100% FPL categories of the Schedule F, or are only bad debt accounts allowed to be included?
For the purposes of Medicaid DSH, CMS ODM does not recognize a difference between “bad debts” and “charity care.” Both are eligible to be included in the >100% FPL, assuming the accounts meet the other requirements of OAC 5101:3-2-07.17 Log these accounts as “with” or “without insurance” as appropriate. (July 1, 2013)
8.7b Does the answer in 8.7a also apply to charges a hospital discounts because of an internal policy?
Yes, assuming the discount is granted as part of a policy to assist an uninsured or underinsured patient with family income above the FPL. Employee discounts or prompt-pay discounts are not recognized as uninsured services for Medicaid DSH purposes. (July 1, 2013)
Note FAQ 8.8 was renumbered as 8.4a
8.9 Step 10 of the agreed-upon-procedures in OAC 5101:3-2-23 Appendix A permits hospitals to include charges for pending Medicaid accounts in the <100% FPL logs and Medicaid Cost Report Schedule F entries. How should this process be administered?
OHA recommends hospitals get a signed application for free care from the patient or his/her legal representative at discharge for every patient who is <100% FPL and has a Medicaid application pending with the County Department of Job and Family Services (CDJFS). These accounts should be kept in a separate, “Medicaid Pending” log until the CDJFS determination is complete. If the CDJFS approves the Medicaid application, the account can be removed from the Medicaid Pending log and billed to Medicaid. If the Medicaid application is denied, and the patient is eligible for free care based on the requirements in OAC 5101:3-2-07.17, the account should be removed from the Medicaid Pending log and included in the log and Cost Report entry for <100% or >100%, with or without insurance, whichever is appropriate.
At the point a Cost Report is filed, and assuming the patient is eligible for free care based on the requirement of OAC 5101:3-2-07.17, the hospital may add any accounts still Medicaid pending with dates of service within the fiscal year the Cost Report covers to the <100% FPL Log and include the charges in the appropriate Cost Report entry. The hospital’s auditor is expected to verify that the hospital has a signed application and that there has been no CDJFS eligibility determination for any of the pending accounts added to the <100% FPL log.
If a CDJFS retroactively determines a patient to be eligible for Medicaid, the hospital may bill the account to Medicaid. If the Medicaid Cost Report that covers the date of service or admission is still open and can be edited, the Schedule F and corresponding logs should be corrected to remove the uninsured charges. If the Cost Report is closed, the hospital can still reflect the revised uninsured data in the Schedule F and logs it submits to the state’s federal Medicaid DSH auditor for that year. (July 1, 2013)
8.10 Determination of coverage by auto liability insurers also often takes a long time. Does FAQ 8.9 extend to auto liability insurers?
8.10a Does ODM require hospitals to bill an auto liability or “Med-Pay” payer prior to writing an account off to HCAP?
No. CMS has taken the position that auto-liability and “Med-Pay” is not health insurance. In addition, it is often difficult to determine whether a liability or Med-Pay payment is intended to cover health care services, as outlined in OAC 5101:3-2-07.17(C).
However, some hospitals have taken the position they want to pursue liability or Med-Pay, because they have the potential to collect full billed charges. ODM does not oppose this position, other than to state a hospital must not pursue payment from the patient while an auto liability or Med-Pay insurer is deciding whether to pay, and ODM will not grant an exception to the Cost Report timeliness limits if an auto liability or Med-Pay payer denies the claim after the Cost Report that covers the date of service has closed (FAQ 7.10). Conversely, once a hospital decides to write-off an account to free care it should stop all collection efforts from the patient or the liability/med pay insurer.
OHA recommends that if a hospital decides to pursue a liability or Med-Pay insurer it should complete and pend a free care application. That way if it later decides to write the account off as uninsured it has the paperwork on file. Also, OHA recommends the hospital keep these accounts segregated so it can examine them at the point it files its Medicaid Cost Report and decide whether to write off the account and abandon the pursuit of a payment from the insurance company, or take the chance it will lose the write-off and wait for the liability/med-pay insurer to make up its mind.
8.10b If, after a hospital takes an HCAP write-off and ceases collection activities from a liability or Med-Pay insurer, the insurer pays the account anyway. Can the hospital keep the payment?
Yes, but if the Medicaid Cost Report that covers the date of service is still open the hospital must reverse the write-off. If the Cost Report is closed, the hospital can still reflect the revised data in the Schedule F and logs it submits to the state’s federal Medicaid DSH auditor for that year. (July 1, 2013)
8.11 Can Medicare Bad Debts also be written-off to HCAP?
8.11a Is a Qualified Medicare Beneficiary (QMB) eligible for HCAP?
8.12 Can an account be considered eligible for both HCAP and the Ohio Victims of Crime Compensation Fund?
8.13 Should a hospital treat a payment from a local levy that covers indigent patients as a bad debt recovery?
No. It is not necessary to net local levy payments from the amount claimed as uncompensated on the Medicaid Cost Report.
8.14 Many hospitals automatically write-off small balance, patient-pay accounts. Can these small balance write-offs be claimed as uncompensated care and included in the logs and cost report entries for above 100% FPL?
Yes, assuming the hospital has ensured the small balance write-offs do not contain charges for Medicaid recipients, that they represent medically necessary, hospital-level services, they are divided between insured and non-insured entries, and they can be certified as required by Appendix A of OAC 5101:3-2-23. . However, as the reporting for the uninsured is focused on date of service, there should be very little left to “write-off.”
8.16 Can charges for patients with incomes below 100% of the federal poverty income guidelines be included in the Cost Report Schedule F entries for patients with incomes above 100% FPL?
If for any reason a patient with an income below 100% FPL is not eligible for Medicaid and does not meet the eligibility or documentation requirements for free care outlined in OAC 5101:3-2-07.17 and the hospitals’ documentation policy, the charges may be included in Schedule F for over 100% FPL. Additional information is included in FAQ 8.1.
8.17 If an uninsured patient states his injuries were the result of an accident, must the hospital bill a liability insurer before writing the account off to HCAP?
Hospitals should always pursue payment for medical care from every reasonable source, governmental and private, and it is important to keep in mind a liability insurer may pay a patient’s charges in full. However, there is no requirement for a hospital to document that a source of liability coverage does not exist prior to writing an eligible account off to free care.
8.18 If a hospital becomes aware a patient received a payment from a liability insurer, must it pursue the patient for that payment prior to writing the account off to HCAP?
A liability insurer is not a health care third-party payer, so OAC 5101:3-2-07.17 (C) does not require a hospital to pursue a payment from one. However, Section (C)(4) gives a hospital the option to pursue any “compensation or benefits from any person or governmental agency for goods and services rendered.” As such, if the hospital is sure the payment from the liability insurer was directly related to the health care delivered in an account written off to HCAP it has the option to pursue the liability insurance payment it if it wishes.
8.19 Can a hospital write off charges to HCAP for a self-pay patient who does not respond to repeated requests for information?
8.20 If another payer declares a non-cooperative patient to be self-pay, can the patient apply for free care?
9.1 If a patient is found to be eligible for free care and has already made payments on an account, must the payments be returned?
Yes. The hospital must return any payments from the patient for hospital-level services. Any payment(s) for non-hospital services, e.g., physician, take home drugs, or home health services, do not have to be returned, since they were not eligible for free care in the first place.
9.2 Can a hospital apply a patient’s refund from a patient account that is found to be retrospectively eligible for free care to another account for the same patient or his/her family that is not eligible?
No, as long as the payment which caused the refund can be linked to an account that is covered by OAC5101:3-2-07.17. However, if a patient has multiple open accounts, some of which are not eligible for free care, and the hospital can document a payment was not specifically intended for an eligible account, the payment can be applied or re-applied to the other, ineligible account(s).
Notification indicating the account to which the payment was applied must be provided to the patient.
9.3 If a patient’s religious or cultural community makes a partial payment on his/her account and the patient wants to apply for free care for the balance, can the hospital accept the partial payment?
In general, all payments on accounts found to be eligible for free care must be refunded. However, ODM recognizes the situation outlined in FAQ 9.3, and will permit the hospital to accept a partial payment only under the following, documented circumstances:
• The payment cannot be accepted directly from the patient. It must come from the religious or community group.
• The payment must be voluntary, with the understanding that the patient’s charges are eligible in full for free care and that no payment for hospital services is necessary.
• The partial payment must be reported in Medicaid Cost Report Schedule F.
HOSPITAL-BASED DATA REVIEW REQUIREMENTS
10.1 Is an independent audit by a CPA of the data on Medicaid Cost Report Schedule F required prior to a hospitals initial submission of a Cost Report to ODM?
10.2 If there are no accounts, or an insufficient number of accounts in any category that is required to be sampled by OAC 5101:3-2-23, Appendix A, how should an auditor proceed?
OAC 5101:3-2-23 requires a specific number of accounts, in specific categories, to be examined by each hospital, depending on the total amount of uninsured care the hospital is reporting. If a hospital has an insufficient number of accounts in any UC category, it should increase the number of accounts randomly selected in other categories until it reaches the total number of accounts it is required to examine.
10.2a If a hospital has no accounts in the category for Disability Assistance, does FAQ 10.2 also apply?
Yes. ODM recommends increasing the sample from the category for UC <100% FPL to cover any shortfall in DA accounts.
10.2b Is it necessary to separately review the data in Cost Report Sub-schedules F1, F2 & F3?
No. Since the totals of Sub-schedules F1, F2 & F3 should foot to the total in Schedule F, there should be no reason to re-review the data in the Sub-Schedules. (7/1/12)
10.3 If a hospital changes the amount reported in the Medicaid Cost Report Schedule F after the report is reviewed and initially submitted, does the entire Schedule F have to be re-reviewed by the hospital’s CPA?
The answer depends on the nature and the degree of changes to Schedule F after the initial submission.
If the only change is the addition of some accounts to the <100% FPL categories for patients who have applied for free care after the report was initially submitted, the CPA only has to review a small random sample of the newly approved accounts for compliance with OAC 5101:3-2-07.17 . However, if the hospital has made wholesale changes to Schedule F entries after the initial submission, it is recommended the entire data review be repeated, in accordance with OAC 5101:3-2-23 .
10.3a Regarding FAQ 10.3, if the additional patient accounts in the <100% FPL categories is so few that the percent of change is a fraction of one percent, is it necessary to re-review any records?
Yes. If the fractional increase of accounts to the <100 FPL categories is less than one percent, the hospital should round up and review at least one of the additional account records.
10.3d What is the time limit for changes to the data submitted in Schedules F and Sub-schedules F1, F2 & F3?
OAC 5101:3-2-08(E) states ODM can in each cost report year issue final, formal opportunities for hospitals to correct data used to calculate disproportionate share and indigent care program payments. Each hospital is given a 30-day period to submit corrections. After that 30-day period a hospital may, for a fee, request its data be reopened for additional changes, until the point that all hospitals’ 30-day correction periods have expired, at which point ODM considers the data final.
Regardless, if at any time a hospital realizes its data has resulted in inappropriate Medicaid DSH payments, the hospital is obligated to inform ODM so the overpayment can be corrected.
10.4 OAC 5101:3-2-23, Appendix A states the external reviewer shall issue a report to the hospital that includes required corrective actions. How should a hospital respond? Should this report be submitted to ODM with the Medicaid Cost Report?
Each hospital is expected to correct any material errors in the Schedule F data prior to the Cost Report being submitted. OHA further recommends hospitals prepare a formal response to the report describing any corrective action being undertaken as a result of problems identified in the report.
ODM does not require a hospital to submit the auditor’s report with the Medicaid Cost Report, but a copy of it must be kept for at least three years. If a hospital has fewer accounts in total than is required by OAC 5101:3-2-23, all accounts reported in Schedule F must be included in the auditor’s review.