Payment Matters

January 25, 2012

CMS Instructs Teaching Hospitals on Reporting FICA Tax Refunds for Medical Residents

By: Leslie Demaree Goldsmith

On March 10, 2010, the IRS determined that medical residents are exempt from FICA taxes based on the student exception, for tax periods ending before April 1, 2005. Although the refunds apply to tax periods ending before April 1, 2005, hospitals actually received these refunds during their FYs 2009, 2010 and 2011 cost years. Because hospital wage data from FYs 2009, 2010 and 2011 will be used to develop wage indexes for federal fiscal years (FFYs) 2013, 2014 and 2015, respectively, CMS recently issued instructions directing its contractors to inform teaching hospitals how they should report these refunds. CMS Pub. 100-20, Transmittal 1010, Change Request 7685, Dec. 30, 2011 [PDF].

CMS Proposed Rule May Offer Relief to Medicaid DSH Providers

By: Mark A. Stanley

CMS issued a proposed rule [PDF] last week that would change the way that hospital-specific limitation for the Medicaid disproportionate share hospital (DSH) adjustment is calculated. The proposed rule would effectively increase the amount of uncompensated care included in the hospital-specific limit, which caps the Medicaid DSH adjustment at the total uncompensated costs of providing inpatient and outpatient hospital services to Medicaid eligible individuals and uninsured individuals.

Second Year of the Medicare Primary Care Provider HPSA Bonus Payment Policy

By: Christopher P. Dean

A recent Medicare Learning Network Matters [PDF] release notified primary care physicians of their potential eligibility for the Health Professional Shortage Area (HPSA) bonus payments. This 10% bonus is available to primary care providers as part of the federal Patient Protection and Affordable Care Act until December 31, 2015.

As previously reported in more detail in Primary Care Providers and General Surgeons Benefit from Increase Reimbursement, an eligible primary care provider may receive the 10% bonus payment on claims for primary care services that are provided in a HPSA. A primary care provider is eligible if the provider has enrolled in Medicare as a primary care provider and has billed 60% or more of the provider’s HCPCS codes in the previous two years to designated primary care codes. Eligible primary care providers include non-physician providers who bill directly to Medicare and not as “incident-to” a physician’s services.