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Revenue Cycle Provisions

With the changing financial landscape, every healthcare dollar collected can impact short- and long-term capital projects, patient safety initiatives, and quality of care. As you assess your current financial situation, it is vital to understand how the recently passed American Recovery and Reinvestment Act of 2009 (ARRA) can affect your healthcare organization’s fiscal health:

  • Temporary Federal Medical Assistance Percentage (FMAP) increase of approximately $86.6 billion. The bill increases FMAP funding for a 27-month period beginning October 1, 2008 through December 31, 2010, with an across-the-board increase to all states of 6.2% and a similar increase for territories. A bonus structure (in addition to the across-the-board increase) provides an additional decrease in state financial obligations for Medicaid based on increases in the state’s unemployment rate. States will also be required to maintain effort on eligibility.
  • Temporary increase in Disproportionate Share Hospital (DSH) payments by approximately $460 million. The bill increases states’ FY2009 annual DSH allotments by 2.5 percent, and increases states’ FY 2010 by 2.5 percent above the new FY2009 DSH allotment. After FY2010, states’ annual DSH allotments would return to 100% of the annual DSH allotments as determined under current law.
  • Extension of moratoria on Medicaid regulations to cost $105 million. The bill extends moratoria on Medicaid regulations for targeted case management, provider taxes, and school-based administration and transportation services through June 30, 2009. The bill also adds a moratorium on the Medicaid regulation for hospital outpatient services through June 30, 2009. The provision includes a Sense of Congress that the Secretary of HHS should not promulgate regulations concerning payments to public providers, graduate medical education, and rehabilitative services.
  • Extension of Transitional Medical Assistance (TMA). The bill extends TMA beyond the current expiration date of June 30, 2009, to December 31, 2010.
    This provision is estimated to cost $1.3 billion.
  • Extension of the Qualified Individual Program. The bill extends the Qualified Individual program, which assists certain low-income individuals with Medicare Part B premiums, through December 31, 2010. The estimated cost of this provision is $550 million.
  • Provisions from the Indian Health Care Improvement Act. The bill eliminates cost-sharing for American Indians and Alaska Natives in Medicaid, protects Indian Tribal property, and maintains access to Indian health facilities. These provisions are estimated to cost $134 million. |
  • Prompt Payment Requirements for Nursing Facilities and Hospitals. The bill temporarily applies Medicaid prompt pay requirements to nursing facilities and hospitals. This provision is estimated to cost $680 million.

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