Review of Medicaid High-Dollar Payments for Inpatient Services in Illinois From January 1, 2006, through September 30, 2007 Hospitals with Fewer than Five High-Dollar Payments

摘要

Pursuant to Title XIX of the Social Security Act (the Act), the Medicaid program provides medical assistance to low-income individuals and individuals with disabilities. The Federal and State Governments jointly fund and administer the Medicaid program. At the Federal level, the Centers for Medicare & Medicaid Services (CMS) administers the program. Each State administers its Medicaid program in accordance with a CMS-approved State plan. Although the State has considerable flexibility in designing and operating its Medicaid program, it must comply with Federal requirements. The Department of Healthcare and Family Services (the State agency) administers the Medicaid program in Illinois. The State agency uses its Medicaid Management Information System to process claims. Pursuant to section 1903(a)(1) of the Act, Federal reimbursement is available only for expenditures that constitute payment for part or all of the cost of services furnished as medical assistance under the State plan. Pursuant to 42 CFR SC 433.312, the State must refund the Federal share of unallowable overpayments made to Medicaid providers. Attachment 4.19-A, chapter I, section (C)(1) of the State plan requires the State agency to use a prospective payment system for medical assistance payments for inpatient hospital services. Under the prospective payment system (PPS), the State agency pays hospital costs at predetermined rates for patient discharges based on the diagnosis-related group to which a beneficiarys stay is assigned. The diagnosis-related group payment is, with certain exceptions, payment in full to the hospital for all inpatient services. Attachment 4.19-A, chapter I, section (C)(5) of the State plan provides for an additional medical assistance payment, known as an outlier payment, to hospitals for cases incurring extraordinarily high costs. Pursuant to Attachment 4.19-A, chapter VII, section (E)(2) of the State plan, the State agency must reduce medical assistance payments to the extent that the beneficiarys hospital stay is covered by third parties, such as workers compensation insurance.