Date: November 12, 2015
To: Chief Financial Officers of Prospective Payment System Hospitals and
Hospital Legal Counsel
From: Claudia Sanders, Senior Vice President, Policy Development
Tom Evert, Chief Financial Officer
Andrew Busz, Policy Director, Finance
Staff Contact: Andrew Busz, andrewb@wsha.org 
(206) 216-2533
Subject: Sample Language for Appeal of Medicaid PPS Rates Effective November 1
Purpose
The purpose of this bulletin is to provide Prospective Payment System (PPS) hospitals with information should they wish to appeal changes to their Medicaid hospital payment rates effective November 1. WSHA recommends they file a rate appeal with the Health Care Authority (HCA) within 60 days of the date of their rate notice to protect their right to a rate correction if it is determined the new rates are in error.
Applicability/Scope
PPS hospitals paid with APR-DRG groups for Medicaid inpatient care and with EAPG groups for outpatient care.
Recommendation
HCA recently sent PPS hospitals notices of new Medicaid inpatient and outpatient payment rates that are effective November 1, 2015. The rates include an 8 percent reduction for inpatient rates and an 8 percent reduction of outpatient rates. These changes are due to state calculations to assure budget neutrality. We are investigating the reductions to determine if we believe the calculations have been done correctly. In the meantime, WSHA recommends that PPS hospitals appeal the new rates given the 60-day time limit to do so (WAC 182-502-0220). This would preserve the hospital’s right to have corrections made if it is determined the new rates are in error.
WSHA has drafted sample rate appeal language to be used in appeal letters, and recommends that hospitals send copies to both Jean Bui, the appeals contact on your rates notices, and Maryanne Lindeblad, the State Medicaid Director. The sample letters include the mailing information for both addressees.
For additional background on the budget neutrality calculation process, see our October 28 Bulletin. On November 4, WSHA and Analysis Group presented a webinar detailing the issues for members of the WSHA rebasing task force. The slides are available here.
Next Steps
WSHA has requested that HCA and its consultant, Navigant, provide additional information regarding the calculations. We have hired Analysis Group, WSHA’s consultant for the safety net assessment program, to review the methodology and calculations for reasonableness. WSHA will inform members of the review results.
