MICHIGAN DEPARTMENT OF COMMUNITY HEALTH

NOTICE OF PROPOSED POLICY

Public Act 280 of 1939, as amended, and consultation guidelines for Medicaid policy provide an opportunity to review proposed changes in Medicaid policies and procedures. Please review the policy summary and the attached materials that describe the specific changes being proposed. Let us know why you support the change or oppose the change. Submit your comments to the analyst by the due date specified. Your comments must be received by the due date to be considered for the final policy bulletin. Thank you for participating in the consultation process.

Director, Program Policy Division Bureau of Medicaid Policy and Actuarial Services
Project Number: Comments Due: Proposed Effective Date:

1123-EO

July 30, 2011

August 1, 2011

Mail Comments to:

Meghan Sifuentes Bureau of Medicaid Policy & Health System Innovation Medical Services Administration P.O. Box 30479 Lansing, Michigan 48909-7979 Fax Number: 517-241-5112 E-mail Address: sifuentesm@michigan.gov

Telephone Number: 517-241-7541 Policy Subject: Inpatient Hospital Payment Reduction

Affected Programs: Medicaid, Childrens Special Health Care Services (CSHCS) Distribution: Hospitals Policy Summary: This policy will reduce inpatient hospital payments to comply with Executive Orders (EOs) 2001-09, 2002-22, and 2005-07, and Public Act 187 of 2010. Purpose: To comply with Executive Orders (EOs) 2001-09, 2002-22, and 2005-07, and Public Act 187 of 2010. The public comment phase of this policy is being conducted concurrently with final.

Public Comment Cover (11/03)

Bulletin
Michigan Department of Community Health
Bulletin Number: Distribution: Issued: Subject: Effective: Programs Affected: MSA 11-26 Hospitals July 1, 2011 Inpatient Hospital Payment Reduction August 1, 2011 Medicaid, Childrens Special Health Care Services (CSHCS) In order to comply with requirements outlined in its fiscal year 2011 legislative appropriation, the Michigan Department of Community Health is implementing the inpatient hospital payment reductions described below. Pursuant to the Governors Executive Orders 2001-09, 2002-22, and 2005-07, and Public Act 187 of 2010, inpatient hospital payments will be reduced by $45,872,360 in fiscal year 2011. The reduction will be made by gross adjustment and applied to medical/surgical hospitals, distinct part rehabilitation units and freestanding rehabilitation hospitals, beginning in August 2011. Reduction Methodology Each hospitals share of the total reduction has been calculated. A hospitals reduction will be based on its inpatient hospital fee-for-service (FFS) paid claims for hospital admissions from October 1, 2008 to September 30, 2009, paid by June 30, 2010. The same file used to calculate the hospital Medicaid Access to Care Initiative (MACI) payments for fiscal year 2011 will be used to calculate the EO reductions. Paid claims include Title XIX, Title V, and Title XIX/Title V inpatient hospital claims. The formula to calculate the reduction of inpatient hospital payments is as follows: 1. Hospital FFS Paid Claims / Total FFS Paid Claims = Hospital Reduction Factor 2. Hospital Reduction Factor X Reduction Amount = Hospital Reduction Amount Each hospitals reduction appears in Attachment I (Medical/Surgical Hospitals) or Attachment II (Rehabilitation Units and Hospitals) to this bulletin. Merged hospitals will have their reductions combined. Reductions will be taken from the surviving hospital. Should a facility close prior to the end of the fiscal year, its reduction will become part of the facilitys final settlement. Each hospitals paid claims file was reviewed and appealed at the time the data were submitted with the hospitals cost report. No further appeal of the inpatient hospital paid claims data will be allowed. Each hospitals share of the reduction will be made by gross adjustment, beginning in August 2011, to the hospitals inpatient hospital Medicaid ID number. Recoveries will be taken from the hospitals payments until the reduction is complete.

MSA 11-26 Page 2 of 2 Public Comment The public comment portion of the policy promulgation process is being conducted concurrently with the implementation of the change noted in this bulletin. Any interested party wishing to comment on the change may do so by submitting comments in writing to: Meghan Sifuentes Michigan Department of Community Health Medical Services Administration P.O. Box 30479 Lansing, Michigan 48909-7979 Or E-mail: sifuentesm@michigan.gov If responding by e-mail, please include "Hospital Take Back Policy" in the subject line. Manual Maintenance Retain this bulletin until applicable information has been incorporated into the Michigan Medicaid Provider Manual. Questions Any questions regarding this bulletin should be directed to Provider Inquiry, Department of Community Health, P.O. Box 30731, Lansing, Michigan 48909-8231, or e-mail at ProviderSupport@michigan.gov. When you submit an e-mail, be sure to include your name, affiliation, and phone number so you may be contacted if necessary. Providers may phone toll-free 1-800-292-2550. Approved

Stephen Fitton, Director Medical Services Administration

Michigan Department of Community Health Medical/Surgical Hospitals Fiscal Year 2011 Reductions
Med Surg NPI 1295803377 1053403402 1619914652 1649297342 1326115569 1598818403 1558479824 1316900277 1083644579 1528031226 1932396017 1306896477 1568416311 1154504892 1194771030 1336183367 1962508259 1831116441 1073568978 1336103043 1619941317 1346260692 1427376664 1992761985 1922068378 1295756948 1093809824 1063471639 1700994845 1588656946 1437176203 1619095718 1801857362 1801887013 1619125788 1417044660 1073588711 1972564730 1578550174 1407877723 1023097771 1124089743 1689635526 1942254529 1497742050 1134144801 1023114634 1992725352 1982665642 1154367001 Facility Name Allegan General Hospital Allegiance Health Alpena Regional Medical Center Aspirus Grand View Hospital Aspirus Keweenaw Hospital Aspirus Ontonagon Hospital Baraga County Memorial Hospital Barbara Ann Karmanos Cancer Hospital Battle Creek Health System Bay Regional Medical Center Beaumont Hospital Grosse Pointe Bell Memorial Hospital Borgess Hospital Borgess Pipp Hospital Borgess-Lee Memorial Hospital Botsford Hospital Bronson Lake View Hospital Bronson Methodist Hospital Caro Community Hospital Carson City Osteopathic Hospital Central Michigan Community Hospital Charlevoix Area Hospital Cheboygan Memorial Hospital Chelsea Community Hospital Children's Hospital of Michigan Chippewa War Memorial Hospital Clinton Memorial Hospital Community Health Center of Branch County Community Hospital - Watervliet Covenant Medical Center, Inc. Crittenton Hospital Deckerville Community Hospital Detroit Receiving Hospital Dickinson County Memorial Hospital Doctors' Hospital of Michigan Eaton Rapids Medical Center Edward W. Sparrow Hospital Emma L. Bixby Medical Center Garden City Hospital Genesys Regional Medical Center Gratiot Medical Center Harbor Beach Community Hospital Harper University Hospital Hayes Green Beach Memorial Hospital Helen Newberry Joy Hospital Henry Ford Hospital Henry Ford Macomb Hospital Henry Ford Wyandotte Hospital Herrick Memorial Hospital, Inc. Hills & Dales General Hospital

Attachment I - MSA 11-26

Reduction Amount $ 9,418 $ 522,717 $ 102,179 $ 14,543 $ 9,380 $ 2,215 $ 8,032 $ 248,314 $ 317,644 $ 308,346 $ 168,001 $ 11,211 $ 653,978 $ 11,601 $ 5,026 $ 334,059 $ 3,669 $ 1,571,534 $ 3,673 $ 32,358 $ 79,560 $ 32,151 $ 65,223 $ 13,775 $ 3,372,850 $ 50,889 $ 1,606 $ 87,268 $ 7,020 $ 1,025,745 $ 154,917 $ 2,398 $ 1,218,131 $ 25,934 $ 43,085 $ 1,968 $ 1,561,732 $ 65,764 $ 225,440 $ 531,861 $ 83,108 $ 759 $ 1,368,851 $ 5,020 $ 1,391 $ 2,271,357 $ 479,829 $ 295,414 $ 24,688 $ 5,252

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Michigan Department of Community Health Medical/Surgical Hospitals Fiscal Year 2011 Reductions
Med Surg NPI 1730115940 1871672618 1598717480 1518991744 1578524419 1134104672 1700820065 1497750830 1134220031 1205824737 1124283502 1346325214 1417959750 1497750608 1902894512 1316945991 1063414233 1972589489 1225066327 1831132133 1285662981 1003908625 1285726828 1811097223 1619923919 1235248071 1568414589 1902841414 1316938327 1417035536 1952307852 1942379284 1992812580 1861475360 1295785285 1487605168 1740230119 1740230648 1124028972 1023001146 1376564088 1982685384 1215931068 1144210253 1659465094 1437102993 1700805157 1780680637 1912906934 1912907635 Facility Name Hillsdale Community Health Center Holland Community Hospital Hurley Medical Center Huron Medical Center Huron Valley - Sinai Hospital Ingham Regional Medical Center Ionia County Memorial Hospital Iron County Community Hospital Lakeland Hospital - St. Joseph Lapeer Regional Hospital Mackinac Straits Hospital Marlette Regional Hospital Marquette General Hospital McKenzie Memorial Hospital McLaren Regional Medical Center Mecosta County Medical Center Memorial Healthcare Memorial Medical Center of West Michigan Mercy General Health Partners Mercy Health Partners - Hackley Campus Mercy Health Partners - Lakeshore Campus Mercy Hospital - Cadillac Mercy Hospital - Grayling Mercy Memorial Hospital Metro Health Hospital Mid Michigan Medical Center - Gladwin MidMichigan Medical Center - Clare MidMichigan Medical Center - Midland Mount Clemens Regional Medical Center Munising Memorial Hospital Munson Medical Center North Ottawa Community Hospital Northern Michigan Regional Hospital Oaklawn Hospital Oakwood Annapolis Hospital Oakwood Heritage Hospital Oakwood Hospital and Medical Center Oakwood Southshore Medical Center Otsego County Memorial Hospital Pennock Hospital POH Medical Center Port Huron Hospital Portage Health Hospital Providence Hospital Saint Mary's Standish Community Hospital Scheurer Hospital Schoolcraft Memorial Hospital Select Specialty Hospital - Ann Arbor Select Specialty Hospital - Flint Select Specialty Hospital - Macomb County

Attachment I - MSA 11-26

Reduction Amount $ 41,586 $ 203,274 $ 1,297,844 $ 37,284 $ 119,274 $ 388,818 $ 4,285 $ 9,131 $ 416,948 $ 122,809 $ 342 $ 7,226 $ 218,884 $ 4,086 $ 377,277 $ 41,459 $ 73,050 $ 40,878 $ 314,492 $ 203,000 $ 19,324 $ 88,035 $ 81,107 $ 149,088 $ 862,421 $ 7,917 $ 74,938 $ 343,514 $ 427,294 $ 710 $ 688,886 $ 18,921 $ 317,298 $ 66,765 $ 258,259 $ 132,208 $ 1,429,434 $ 115,588 $ 36,572 $ 61,613 $ 225,870 $ 194,857 $ 19,360 $ 639,565 $ 4,152 $ 3,382 $ 1,036 $ 484 $ 731 $ 1,092

Page 2 of 3

Michigan Department of Community Health Medical/Surgical Hospitals Fiscal Year 2011 Reductions
Med Surg NPI 1689618324 1780645630 1346275856 1922090554 1437259843 1548266778 1538102173 1457304495 1922058551 1023088168 1124099858 1619941333 1780658443 1093748642 1053356352 1255346961 1023041670 1790706901 1639111057 1871507509 1598099699 1194713461 1386626075 1801872379 1003878539 1396732103 1407949191 1689653305 1306825997 1275536344 Facility Name Sheridan Community Hospital Sinai-Grace Hospital South Haven Community Hospital Spectrum Health Spectrum Health - Reed City Campus Spectrum Health Gerber Memorial Spectrum Health United Memorial - Kelsey Campus Spectrum Health United Memorial - United Campus St. Francis Hospital St. John Hospital and Medical Center St. John Macomb-Oakland Hospital-Macomb Center St. John River District Hospital St. Joseph Mercy Hospital - Ann Arbor St. Joseph Mercy Livingston Hospital St. Joseph Mercy Oakland St. Joseph Mercy Port Huron St. Joseph Mercy Saline Hospital St. Mary Mercy Hospital St. Mary's Health Care (Grand Rapids) St. Mary's of Michigan Medical Center Sturgis Memorial Hospital Tawas St. Joseph Hospital Three Rivers Health Triumph Hospital Detroit University of Michigan Health System West Branch Regional Medical Center West Shore Medical Center William Beaumont Hospital - Royal Oak William Beaumont Hospital - Troy Zeeland Community Hospital TOTAL

Attachment I - MSA 11-26

Reduction Amount $ 546 $ 1,454,332 $ 63,926 $ 4,351,146 $ 8,133 $ 46,687 $ 990 $ 58,376 $ 29,393 $ 1,916,086 $ 470,762 $ 32,136 $ 488,056 $ 75,261 $ 642,963 $ 52,185 $ 3,535 $ 125,118 $ 546,826 $ 319,516 $ 62,826 $ 31,735 $ 41,560 $ 1,252 $ 4,753,086 $ 24,484 $ 26,970 $ 1,381,274 $ 343,175 $ 25,768 $ 45,011,355

Page 3 of 3

Michigan Department of Community Health Rehabilitation Hospitals Fiscal Year 2011 Reductions
Rehab NPI 1417994468 1801860218 1285766196 1154363406 1720265036 1033243399 1144254525 1750435962 1477512424 1164445474 1508830175 1265426704 NA 1942399829 1851496210 1366493389 1730133463 1205923414 NA 1457383572 1427091636 NA 1942370754 1225088966 1376564088 1255316584 1245293117 1487654547 1801853767 1043229560 NA 1033180765 1497801518 1467481713 1326135179 1144326380 1245347343 1891757944 Facility Name Alpena Regional Medical Center Bay Regional Medical Center Borgess Hospital Botsford Hospital Children's Hospital of Michigan Community Hospital - Watervliet Covenant Medical Center, Inc. Crittenton Hospital Edward W. Sparrow Hospital Genesys Regional Medical Center Gratiot Medical Center Healthsource Saginaw Henry Ford Hospital Henry Ford Macomb Hospital Hurley Medical Center Marquette General Hospital Mary Free Bed Hospital & Rehabilitation Center Memorial Healthcare Mercy General Health Partners Mercy Health Partners - Hackley Campus Metro Health Hospital MidMichigan Medical Center - Midland Northern Michigan Regional Hospital Oakwood Heritage Hospital POH Medical Center Providence Hospital Rehabilitation Institute Rogers City Rehabilitation Hospital Sinai-Grace Hospital Southwest Regional Rehabilitation Hospital St. John Hospital and Medical Center St. John Macomb-Oakland Hospital-Macomb Center St. Joseph Mercy Hospital - Ann Arbor St. Joseph Mercy Oakland St. Joseph Mercy Port Huron St. Mary Mercy Hospital Three Rivers Health University of Michigan Health System Total

Attachment II - MSA 11-26

Reduction Amount $ 2,666 $ 15,836 $ 11,967 $ 4,257 $ 55,352 $ 1,875 $ 12,561 $ 5,993 $ 19,455 $ 5,400 $ 3,206 $ 4,591 $ 13,742 $ 6,664 $ 38,803 $ 9,612 $ 147,113 $ 1,075 $ 3,309 $ 5,987 $ 1,580 $ 2,722 $ 488 $ 7,874 $ 1,074 $ 4,925 $ 268,935 $ 4,510 $ 32,281 $ 29,657 $ 15,204 $ 3,553 $ 14,028 $ 4,660 $ 3,504 $ 3,089 $ 7,962 $ 85,495 $ 861,005

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