205.640 Medical Assistance Revolving Trust Fund (MART) -- Distribution of
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/ky/205-640A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
disproportionate share funds -- Authority for administrative regulations --
Duties of hospitals receiving funds from MART.
(1)The commissioner of Medicaid services shall adopt a disproportionate share
program consistent with the requirements of Title XIX of the Social Security Act
which shall include to the extent possible, but not limited to, the provisions of this
section.
(2)The Medical Assistance Revolving Trust Fund
(MART)shall be established in the
State Treasury and all provider tax revenues collected pursuant to KRS 142.301 to
142.363 shall be deposited in the State Treasury and transferred on a quarterly basis
to the Department for Medicaid Services for use as specified in this section. All
investment earnings of the fund shall be credited to the fund. Provider tax revenues
collected in accordance with KRS 142.301 to 142.363 may be used to fund the
provisions of KRS 216.2920 to 216.2929 and to supplement the medical assistance-
related general fund appropriations for fiscal year 1994 and subsequent fiscal years.
Notwithstanding the provisions of KRS 48.500 and 48.600, the MART fund shall
be exempt from any state budget reduction acts.
(a)Beginning in state fiscal year 2000-2001 and continuing annually thereafter,
provider tax revenues and state and federal matching funds shall be used to
fund the disproportionate share program established by administrative
regulations promulgated by the Cabinet for Health and Family Services.
Disproportionate share funds shall be divided into three
(3)pools for
distribution as follows:
1. An acute care pool, composed of critical access hospitals,
comprehensive physical rehabilitation hospitals, long-term acute
hospitals, and acute care hospitals that do not qualify as a university
hospital, shall receive an initial and a final allocation determined by
subtracting from the state's total DSH allotment:
a. The allocation required in subparagraph 2. of this paragraph for the
psychiatric pool; and
b. The initial or final, as applicable, DSH payments to be made to
hospitals in the university pool in subparagraph 3. of this
paragraph;
2. A psychiatric pool, composed of private psychiatric hospitals and state
mental hospitals, shall receive the percentage allowable by federal law
pursuant to 42 U.S.C. sec. 1396r-4(h), up to nineteen and eight-
hundredths percent (19.08%) of the total disproportionate share funds,
with the allocation between each respective group of hospitals
established by the biennial budget; except, however, that the allocation
to state mental hospitals shall not exceed ninety-two and three-tenths
percent (92.3%) of the total allotment to the psychiatric pool. If there are
remaining funds within the psychiatric pool after all private psychiatric
hospitals reach their hospital-specific DSH limit, state mental hospitals
may exceed the ninety-two and three-tenths percent (92.3%) limit but
may not exceed their hospital-specific DSH limit;
3. A university hospital pool, composed of university hospitals, shall
receive thirty-seven percent (37%) of the state's DSH allotment; except,
however, that initial and final DSH payments to university hospitals
shall be determined according to paragraph
(e)of this subsection and not
exceed the pool's overall allotment;
4. If there are any remaining disproportionate share funds from the
psychiatric pool, fifty-four percent (54%) of those funds shall be
distributed to the acute care pool and forty-six percent (46%) shall be
distributed to the university pool. If the university hospitals are unable to
absorb additional DSH payment dollars, remaining funds shall be
distributed to the acute care pool; and
5. If, in any year, university hospitals fail to provide state matching funds
necessary to secure federal financial participation for the funds allocated
to university hospitals under this subsection, the portion of the funding
allocation that is not matched by university hospitals shall be made
available to the acute care pool.
(b)The MART fund shall be used to compensate acute care hospitals, private
psychiatric hospitals, state mental hospitals, critical access hospitals,
comprehensive physical rehabilitation hospitals, long-term acute care
hospitals, and university hospitals participating in the disproportionate share
program for uncompensated care costs.
(c)An individual hospital shall receive distributions if the hospital meets the
requirements of the disproportionate share program pursuant to 42 U.S.C. sec.
1396r-4.
(d)1. An individual hospital shall not receive an initial DSH payment unless
the hospital submits a Medicaid DSH survey by the deadline established
by subsection (8)(a) of this section, unless the deadline has been
extended by the commissioner of the department. Extension requests
shall be received at least ten
(10)days prior to the deadline. Extensions
shall be limited to rare circumstances which prevent the hospital from
meeting the deadline despite due diligence. Extensions shall be granted
for no more than thirty
(30)calendar days from the original due date for
the Medicaid DSH survey. Failure to submit a DSH survey in a timely
manner or other required information for receipt of an initial DSH
payment shall result in an individual hospital's final DSH payment being
reduced by twenty percent (20%).
2. A hospital newly enrolled in the Medicaid program, which does not have
at least six
(6)months of cost report information necessary to calculate
an initial DSH payment, may submit a limited DSH survey for the
purpose of determining if the hospital is eligible to receive an initial
DSH payment.
(e)Distributions shall be made as follows: 1. For state fiscal year 2018-2019, the department shall use the examined
state fiscal year 2014-2015 DSH survey to calculate an initial DSH
payment. Providers who did not receive a DSH payment for state fiscal
year 2014-2015 shall be eligible to submit data for the purpose of the
2019 payment, subject to limited review. For state fiscal year 2019-
2020, and each year thereafter, the department shall use the Medicaid
DSH survey covering the hospital's fiscal year ending in the calendar
year preceding July 1 of the applicable state fiscal year to calculate an
initial DSH payment. Using the surveys submitted in accordance with
this subsection, payments shall be made as follows:
a. Each university hospital in the university pool shall receive an
initial DSH payment equal to one hundred percent (100%) of the
hospital's total uncompensated care costs if the total initial DSH
payments to all hospitals in the university pool do not exceed the
maximum allotment to the university pool as set forth in
subsection (3)(a) of this section. If the total uncompensated care
costs for the pool exceed the pool's maximum allotment, the initial
uncompensated care factor for university hospitals shall be
determined by calculating the percentage of each hospital's total
uncompensated care costs toward the sum of the total
uncompensated care costs of all hospitals in the university pool,
and each hospital's initial DSH payment shall be calculated by
multiplying the hospital's initial uncompensated care factor by the
total funds allocated to the university hospital pool;
b. For each private psychiatric and state mental hospital in the
psychiatric pool, the department shall calculate an initial
uncompensated care factor. The initial uncompensated care factor
for a private psychiatric or state mental hospital shall be
determined by calculating the percentage of each hospital's total
uncompensated care costs toward the sum of the total
uncompensated care costs for all private psychiatric or state mental
hospitals in the psychiatric pool, as appropriate. Each hospital's
initial DSH payment shall be calculated by multiplying the
hospital's initial uncompensated care factor by the total funds
allocated to private psychiatric or state mental hospitals in the
psychiatric pool, as appropriate. No individual hospital's initial
DSH payment shall exceed the hospital's hospital-specific DSH
limit;
c. For each hospital in the acute care pool, the department shall make
an initial determination of whether the acute care hospital qualifies
as an essential hospital and calculate an initial uncompensated care
factor for each hospital. The initial uncompensated care factor for
each hospital in the acute care pool shall be determined by
calculating the percentage of each hospital's total uncompensated
care costs toward the sum of the total uncompensated care costs
for all hospitals in the acute care pool except that the initial
uncompensated care factor for an essential hospital shall be
calculated using two hundred percent (200%) of the hospital's total
uncompensated care costs. Each hospital's initial DSH payment
shall be calculated by multiplying the hospital's initial
uncompensated care factor by the total funds allocated to the acute
care pool. No individual hospital's initial DSH payment shall
exceed the hospital's hospital-specific DSH limit; d. For any hospital that is newly enrolled in the Medicaid program
and lacks at least six
(6)months of cost report information, the
department shall calculate a proxy amount for the hospital's
uncompensated care costs. A newly enrolled hospital's
uncompensated care costs proxy amount shall be determined by
first dividing the total uncompensated care costs for all non-newly
enrolled hospitals in the appropriate pool by the total number of
hospital beds, excluding swing beds, reported on the Medicaid cost
reports by those hospitals and then multiplying the resulting
uncompensated care cost per bed by the new hospital's total
number of hospital beds, excluding swing beds. Any
uncompensated care costs proxy amounts calculated for newly
enrolled hospitals shall be used in the determination of initial
uncompensated care factors for all other hospitals in the
appropriate pool; e. The department may make adjustments to a Medicaid DSH survey
filed by a hospital to correct information that is incomplete or
inaccurate as determined by limited review. If the department
makes adjustments to a hospital's Medicaid DSH survey, the
department shall provide written notice to the hospital; f. If a hospital has a negative uncompensated care cost, its
uncompensated care costs shall be excluded from the calculation
of any uncompensated care costs proxy amount for newly enrolled
hospitals and uncompensated care factors for the appropriate pool; g. By September 30 of each year, the department shall calculate an
initial DSH payment pursuant to subparagraph 1. of this paragraph
and shall notify each hospital of their calculation. The notice shall,
at minimum, contain the following for each hospital:
i. Uninsured uncompensated care costs;
ii. Total uncompensated care costs;
iii. The status of the MIUR and LIUR calculations;
iv. The uncompensated care factor; and
v. The estimated initial annual payment amount; h. Hospitals shall notify the department by October 31 of any
adjustments in the department's initial calculations;
i. The department shall make any necessary adjustments and shall
issue an initial DSH payment to each hospital in one
(1)lump-sum
payment on or before November 30, for the disproportionate share
funds available during the corresponding federal fiscal year. If the
federal disproportionate share allotment for the Commonwealth
has not been published through the Federal Register by November
15, the department may pay a portion but no less than ninety
percent (90%) of the expected annual payment prior to the
publication of the annual federal allotment. If a partial initial
payment is made, the remaining amount shall be paid within sixty
(60)days after the date upon which notice of the Commonwealth's
federal allotment is published through the Federal Register; and
j. An initial DSH payment shall not be subject to appeal; 2. a. Each hospital's total initial DSH payment shall be reconciled to a
final DSH payment using the examined Medicaid DSH surveys
and shall correspond to the applicable state fiscal year DSH
payment year.
b. Using the surveys submitted in accordance with subsection (8)(a)
of this section, the department shall make a final determination of
whether an acute care hospital qualifies as a MIUR or as a LIUR
hospital. Any qualifying hospital will be deemed an essential
hospital. Critical access hospital status will also be confirmed to
make a final determination of essential hospital status.
c. The department shall calculate a final DSH payment as follows:
i. Each university hospital shall receive a final DSH payment
equal to one hundred percent (100%) of the hospital's total
uncompensated costs so long as the total final DSH payments
to all university hospitals do not exceed the maximum
allotment to the university pool as set forth in subsection
(3)(a) of this section. If total uncompensated care cost for the
pool exceeds the pool's maximum allotment, the final
uncompensated care factor for university hospitals shall be
determined by calculating the percentage of each hospital's
total uncompensated care costs toward the sum of the total
uncompensated care costs for all hospitals within the
university pool. In this event, each hospital's final DSH
payment shall be calculated by multiplying the hospital's
uncompensated care factor by the total fund allocated to the
hospitals within the respective pool under subsection (3)(a)
of this section;
ii. For hospitals in the acute care pool and the psychiatric pool,
the department shall recalculate each hospital's
uncompensated care factor using examined data. The final
uncompensated care factor for each hospital that qualifies as
an essential hospital shall be computed using two hundred
percent (200%) of the hospital's total uncompensated care
costs using examined data;
iii. If a hospital has a negative uncompensated care cost, their
uncompensated care cost will be excluded in the calculation
of uncompensated care factors; and
iv. The department shall compare each hospital's initial DSH
payment with the hospital's final DSH payment and with the
hospital's hospital-specific DSH limit to determine if any
underpayment or an overpayment exists.
d. By September 30 of the fourth year following the year in which an
initial DSH payment is made, the department shall provide each
hospital with a final DSH reconciliation report which, at a
minimum, shall indicate the following:
i. A hospital's final MIUR and LIUR status;
ii. Final uncompensated care factor and underlying data;
iii. Final DSH payment; and
iv. If applicable, the amount of any overpayment to be paid to
the department and the due date for repayment.
e. If an overpayment is identified, repayment shall be made by
January 31 of the following year, which is five
(5)years following
the year in which an initial DSH payment is made.
f. Hospitals shall notify the department by October 31 of any
corrections to the department's calculations.
g. If a hospital's initial DSH payment was less than the hospital's final
DSH payment, the department shall pay the hospital the amount of
the difference. Final DSH payments shall be issued by the
department within sixty
(60)days of the due date for the
repayment of funds from hospitals with a DSH overpayment. If all
repayments have not yet been received by the due date, the
department shall distribute the funds collected as of the due date,
and shall issue additional payments on a timely basis upon
collection of all remaining outstanding overpayments.
h. Any funds remaining after the reconciliation process shall be
redistributed pursuant to subparagraph 3. of this paragraph; and 3. Disproportionate share payments remaining after reconciling each
hospital's initial DSH payment with the hospital's final DSH payment
shall be distributed to other hospitals in the acute care pool, university
pool, or to private psychiatric hospitals in the psychiatric pool as
follows:
a. Funds shall first be distributed to all hospitals in the same pool as
the hospitals from which the overpayments were recovered, and
the funds shall be distributed in a proportional manner in relation
to each hospital's remaining total uncompensated care costs in
accordance with the hospital's examined DSH survey for the
applicable DSH year;
b. In the proportional distribution, the distribution factor for each
hospital that qualifies as an essential hospital shall be computed
using two hundred percent (200%) of the hospital's total remaining
uncompensated care costs; and
c. If DSH funds remain after making this distribution to other
hospitals in the same pool, funds shall be distributed
proportionally to hospitals in the acute care pool, university pool,
and private psychiatric hospitals in the psychiatric pool in relation
to each hospital's remaining total uncompensated care costs in
accordance with the hospital's examined Medicaid DSH survey for
the applicable DSH year.
(4)Notwithstanding any other provision to the contrary, total annual disproportionate
share payments made to state mental hospitals, university hospitals, acute care
hospitals, critical access hospitals, comprehensive physical rehabilitation hospitals,
long-term acute care hospitals, and private psychiatric hospitals in each state fiscal
year shall be equal to the maximum amount of disproportionate share payments
established under the Federal Balanced Budget Act of 1997 and any amendments
thereto. Disproportionate share payments made to a hospital shall not exceed the
hospital's total uncompensated costs or the hospital's hospital-specific DSH limit.
(5)The secretary of the Cabinet for Health and Family Services shall promulgate
administrative regulations, pursuant to KRS Chapter 13A, for the administration
and implementation of this section.
(6)All hospitals receiving reimbursement under this section shall display prominently a
sign which reads as follows: "This hospital will accept patients regardless of race,
creed, ethnic background, or ability to pay."
(7)The hospital shall, upon request by the Cabinet for Health and Family Services,
submit any supporting documentation to substantiate compliance with the audit
requirements established by 42 C.F.R. sec. 455.
(a)An in-state hospital participating in the Medicaid Program shall submit a
Medicaid DSH survey corresponding to the hospital's cost reporting period to
the department no later than sixty
(60)days following the hospital's
submission of their annual cost report, unless an extension has been granted
by the commissioner. Extension requests shall be received ten
(10)days prior
to the deadline. Extensions shall be limited to rare circumstances which
prevent the hospital from meeting the deadline despite its due diligence.
Extensions shall be granted for no more than thirty
(30)calendar days from
the original due date. A new in-state hospital lacking six
(6)months of cost
report information necessary to calculate an initial DSH payment shall submit
a limited DSH survey to determine eligibility no later than the September 1
immediately prior to the department's initial DSH payment calculation. A
hospital may submit corrections to an applicable Medicaid DSH survey prior
to the scheduled start date of the department's desk review.
(b)The department shall notify each hospital in advance of the desk review of the
opportunity to submit corrections to the Medicaid DSH survey.
(c)The department and each Medicaid managed care organization shall supply a
paid claims listing
(PCL)to each hospital within ninety
(90)days of the last
day of the hospital's fiscal year end date and a second set of data twelve
months after the hospital's fiscal year end date. The PCL shall include all
claims with discharge dates or service dates, as applicable, within the
hospital's fiscal year that are paid from the first day of the hospital's fiscal year
to ninety
(90)days or twelve
(12)months, respectively, after the end of the
hospital's fiscal year. For all hospitals, the department and each Medicaid
managed care organization shall provide separate reports for adjudicated
claims associated with both inpatient services and outpatient services provided
to eligible members. If the PCL data is inaccurate or unavailable, providers
shall complete the DSH survey using internal data.
(d)The department shall specify a timetable for hospitals to update DSH audit
survey data.