MIR-2006-7AB, July 2006

MMA - Method of Cost Settlement for Inpatient Services for Rural Hospitals Participating Under Demonstration Authorized by Section 410A of the Medicare Modernization Act

Provider Types Affected
Rural hospitals participating under the demonstration authorized by section 410A of the Medicare Modernization Act (MMA) that bill Medicare fiscal intermediaries (FIs) for their services

Key Points

• The Centers for Medicare & Medicaid Services (CMS) has changed the method of reimbursement for inpatient services for rural hospitals participating under the demonstration authorized by section 410A of the Medicare Modernization Act (MMA) by changing the way interim payments are calculated and administered for the project. Change Request (CR) 5020 provides further instructions on the settlement process for the first and second years of the demonstration.
• CR5020 applies only for the 13 identified demonstration hospitals as shown in Tables A and B of this article. As shown in CR5020, the reasonable cost payment will apply to the four hospitals that discontinued participation in the demonstration for the period during which they did participate.
• For specific information relating to the calculation and payment methodology and administration of the interim payments for rural hospitals participating under the demonstration authorized by section 410A of the MMA, please refer to “Attachment A – Payment Methodology for Years Two through Five” and to the Business Requirements attached to CR5020.

Background
The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) mandates a demonstration that establishes rural community hospitals. Eligible rural community hospitals are located in a rural area, have fewer than 51 acute care beds, make available 24-hour emergency services, and are not eligible for Critical Access Hospital designation. Thirteen hospitals participated in the first year of the demonstration. Of these, four terminated their participation in December 2005.

Additional Information
CR5020 is the official instruction issued to your FI regarding changes mentioned in this article, MM5020. CR5020 may be found by going to http://www.cms.hhs.gov/Transmittals/downloads/R45DEMO.pdf    on the CMS Web site.

Please refer to your local FI if you have questions about this issue. To find your FI’s toll-free phone number, go to http://www.cms.hhs.gov/apps/contacts/   on the CMS Web site.

Appendix A

TABLE A

Currently participating hospitals selected for the demonstration and their fiscal intermediaries

TABLE B

Hospitals that withdrew from the demonstration in December 2005

 
Please note : Hospitals in Table B will undergo audit and cost-report settlement for the period during which they participated in the demonstration. However, since the hospitals will not continue to participate, their settlement amounts will not be used to calculate payment amounts for future years.

Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.

MLN Matters Number: MM5020
Pub. 100-19, Transmittal# R45DEMO, CR# 5020
Related CR Release Date: April 14, 2006
Effective Date: October 1, 2004
Implementation Date: July 14, 2006

Do you have your NPI? National Provider Identifiers (NPIs) will be required on claims sent on or after May 23, 2007. Every health care provider needs to get an NPI. Learn more about the NPI and how to apply for an NPI by visiting http://www.cms.hhs.gov/NationalProvIdentStand/   on the CMS Web site.