National Government Services, Inc.

1. National Government Services, Inc. New York State HFMA Seminars April 4-8, 2011

2. Agenda J13 Update Cost Report Filing Requirements PIP/Pass Thru Payment Report Tentative Settlements/Interim Rate Reviews Cost Report Settlement Holds SSI Ratios Outlier Reconciliation HITECH Incentive Payments

3. J13 Update

4. J13 Update March 18 began Option Year 3 J13 Audit Plan submitted to CMS for review and approval Cost Report Audit subcontractor remains Figliozzi & Company MSP Audit subcontractor remains Systematic Medical Billing & Credentialing Services, Inc.

5. J13 Update Plan includes completing hospital audits, ACA Graduate Medical Education (GME)/ Indirect Medical Education (IME) cap audits and additional workload in Option Year 3 Cost report settlements continue to be held due to SSI issue Changes continue to come due to Congressional activity

6. National Government ServicesAudit and Reimbursement J13 Key Contacts Gene Nickerson (207) 253-3325 Gene.Nickerson@wellpoint.com Warren Willis (860) 638-5801 Warren.Willis@wellpoint.com Angela Tyson (315) 442-4759 Angela.Tyson@wellpoint.com Sandy O�Connor (315) 442-4986 Sandra.O�Connor@wellpoint.com Kathy Hales (317) 841-4585 Kathy.Hales@wellpoint.com

7. National Government Services Addresses and Points of Contact All as filed and amended cost reports should be mailed�to: FedEx Shipments:� Cost Report Processing Unit Medicare Audit & Reimbursement National Government Services, Inc. 5000 Brittonfield Parkway, Suite 100 East Syracuse, NY 13057 � US Mail:� Cost Report Processing Unit Medicare Audit & Reimbursement National Government Services, Inc. P.O. Box 4900 Syracuse, NY 13221-4900

8. National Government Services Addresses and Points of Contact All interim rate review requests should be mailed�to: FedEx Shipments:� Christine Chamberlain Lead Provider Reimbursement Analyst Medicare Audit & Reimbursement National Government Services, Inc. 5000 Brittonfield Parkway, Suite 100 East Syracuse, NY 13057 � US Mail:� Christine Chamberlain Lead Provider Reimbursement Analyst Medicare Audit & Reimbursement National Government Services, Inc. P.O. Box 4900 Syracuse, NY 13221-4900

9. National Government Services Addresses and Points of Contact All appeals should be mailed to: � FedEx Shipments:� Lee Tallant, Mail Point INA102-AF42 Medicare PAQT Lead National Government Services, Inc. 8115 Knue Road Indianapolis, IN 46250 � US Mail:� Lee Tallant, Mail Point INA102-AF42 Medicare PAQT Lead National Government Services, Inc. P.O. Box 7191 Indianapolis, IN 46207-7191

10. National Government Services Addresses and Points of Contact All reopenings should be mailed�to: � FedEx Shipments: Sandra O'Connor Manager, Medicare Audit & Reimbursement National Government Services, Inc. 5000 Brittonfield Parkway, Suite 100 East Syracuse, NY 13057 � US Mail: Sandra O'Connor Manager, Medicare Audit & Reimbursement National Government Services, Inc. P.O. Box 4900 Syracuse, NY 13221-4900

11. National Government Services Addresses and Points of Contact All affiliation agreements and temporary adjustments to GME/IME caps should be mailed�to: � FedEx Shipments: Kevin Glorioso Lead Auditor, Medicare Audit & Reimbursement National Government Services, Inc. 5000 Brittonfield Parkway, Suite 100 East Syracuse, NY 13057 � US Mail: Kevin Glorioso Lead Auditor, Medicare Audit & Reimbursement National Government Services, Inc. P.O. Box 4900 Syracuse, NY 13221-4900 Phone Number: 315-442-4046 FAX Number: 315-442-4980

12. Cost Report Filing Information

13. Filing Information Cost Reports ending 12/31/10 will be due on 5/31/2011 12/31/10 Per Resident amounts have not been calculated yet but will be issued within the next few weeks TEFRA Target Rates no longer applicable (IPF PPS) ESRD rates � PS&R Report Type 720 Expansion of Services form and Sanctioned Physician form are no longer required Wage Index � documentation required

14. Requirements for Filing Virus-free Diskette with ECR file Passing all Level 1 edits Print Image (PI) file Original signature of appropriate officer on the Certification Page (Worksheet S) Proper matching of encryption code, date, and time IRIS diskette (virus free) passing all IRISEDV3 edits (teaching facilities only) Settlement summary agrees with electronic file Original signature of appropriate officer on CMS-339 Transmittal 23 of the CMS Form 2552-96

15. Cost Report Filing We encourage providers to file as much information electronically as possible on CD or disk. Worksheet S and Certification page of CMS-339 must be original signature and therefore must be hard copy Cost Reports should be mailed to: National Government Services, Inc. Audit and Reimbursement Cost Report Processing Unit P.O. Box 4900 Syracuse, New York 13221-4900 Overnight courier address: National Government Services, Inc. Audit and Reimbursement Cost Report Processing Unit 5000 Brittonfield Parkway, Suite 100 East Syracuse, New York 13057

16. Overpayment Check If your cost report indicates a net payment due to Medicare, a check must be submitted when you file your cost report. Checks are to be made payable to National Government Services, Inc. and should be forwarded to one of the following addresses: Regular Mail: Express Mail: NGS � 13001 NY Part A Non-MSP U.S. Bank P.O. Box 809366 Attn: Lockbox #809366 Chicago, IL 60680-9366 5300 South Cicero Ave Chicago, IL 60638 Please include a copy of Worksheet S, Parts I and II with your check to insure proper processing. Payment arrangements should be made for an acceptable payback schedule, prior to submission. Call Customer Care at 1-888-855-4356. Please do not send your check with your cost report package. Please include a copy of the check with the cost report submission.

17. PIP/Pass Thru Payment Report

18. PIP/Pass Thru Payment Report As discussed at last year�s HFMA seminars, all Medicare contractors are now using a new standardized report Generated through FISS for contractors (not accessible by providers like the Provider Disclosure Statement) Will be provided to providers once a year for cost reporting purposes upon request to PSR@wellpoint.com

19. PIP/Pass Thru Payment Report

20. Payment scheduled for remittance dated 1/18/10 was paid by CDS datacenter on 1/11/10 by mistake (one week early) This payment is not displayed on the 2010 PIP/Pass Thru Payment Report since it was not paid on the correct date 4/14 of payment on 1/11/10 is allocated to 2010 Add this to the PIP/Pass Thru Payment Report subtotals PIP/Pass Thru Payment Report

21. Retroactive/Tentative Settlements Not included on the new FISS PIP/Pass Through Report Not available for distribution in report format Providers must maintain record of the settlement payments

22. Tentative Settlements/Interim Rate Reviews

23. Tentative Settlements

24. Tentative Settlements We look at prior year audit adjustments to determine adjustments to apply to current year More in depth analysis performed for providers with DSH and GME/IME Remittance Advices will show the Part A and Part B amounts separately

25. Interim Rate Reviews

26. For providers who receive pass through payments or cost reimbursement, we will complete two rate reviews per year With the cost report tentative At the beginning of new fiscal year (for 12/31 Fiscal Year Ends (FYEs) will send letters requesting budgeted data in Dec/Jan) For periodic interim payment (PIP) providers, we agreed to perform four PIP reviews per year With cost report tentative After Federal rates change in Oct/Nov At the beginning of next year will send letters requesting budgeted data If no data submitted, just reset to the full year reimbursement (reset rate) One additional cursory review (for 12/31 FYEs it is April/May timeframe) Interim Rate Reviews

28. Cost Report Settlement Holds

29. SSI Ratios All inpatient prospective payment system (IPPS) hospital and inpatient rehabilitation facility (IRF) cost reports can not be issued final settlements Awaiting CMS guidance on SSI ratios

30. Outlier Reconciliation CMS Pub 100-04, Chapter 3, Section 20 Cost Reports which have been identified by CMS�s thresholds are on hold 84 cost reports on hold for all of National Government Services 28 in J13 20 in NY Can not issue NPR CMS Change Request 7192 FISS Utility to determine updated outlier payments

31. PS&R Detail Requests

33. PS&R Detail Requests Please note the mailing address for has changed to: National Government Services, Inc. Accounts Payable Mailstop: INA101-AF11 8115 Knue Road Indianapolis, IN 46250

34. PS&R Detail Requests For PS&Rs prior to 2009, providers request Detail PS&R reports using the Provider Request for Detail PS&R Form. A charge of $200 is required. For PS&Rs 2009 and subsequent, providers enter their own requests for Detail PS&R reports directly into the CMS Redesigned PS&R system. Providers may request one PS&R Detail report for their most recently completed cost reporting year at no charge. The form is not required for the first request per year when no payment is necessary. A charge of $200 is required for additional or special requests for PS&R Detail reports. The completion of the Provider Request for Detail PS&R Form is also required for any requests that require payment. To expedite the processing of your request, you may also email the following information to: psr@wellpoint.com Provider Request for Detail PS&R Form Copy of the check, when applicable

35. HITECH Incentive Payments

36. HITECH ACT Overview Health Information Technology for Economic and Clinical Health Act (HITECH) was included in the American Recovery and Reinvestment Act (ARRA) of 2009 Established incentive payments to eligible �subsection (d) hospitals� (acute care hospitals) and critical access hospitals (CAHs) that are meaningful users of certified Electronic Health Record (EHR) technology

37. HITECH ACT Overview Qualifying hospital is an eligible hospital that successfully demonstrates meaningful use of certified EHR technology for the EHR reporting period during a payment year. A payment year is a federal fiscal year (FFY). 1st year � the EHR reporting period equals 90 continuous days beginning and ending within the year Subsequent years � EHR reporting period is the entire year

38. HITECH ACT Overview Eligible hospitals may qualify to receive these incentive payments for up to four years beginning in 2011. The annual payment update will be reduced beginning in FFY 2015 for those hospitals that do not demonstrate meaningful use of certified EHR technology

39. Acute Care Hospital Incentive Payments Initial incentive payment will be based on data obtained from the latest submitted 12-month cost report (currently FYEs 10/1/2009 through 9/30/2010) W/S S-3: Discharges, Medicare Part A days, Medicare Part C days, total days W/S C: total charges W/S S-10: charity care charges This data will be updated with data from the next submitted cost report until the hospital attests to being a meaningful user.

40. Acute Care Hospital Incentive Payments Final incentive payment will be determined when settling the 12-month cost report that begins during the payment year and will use data from that cost reporting period.

41. Acute Care Hospital Incentive Payments Example for 12/31 FYE provider attesting to meaningful use in 2011: Initial payment � if the provider attests in early 2011, payment will be based on 12/31/2009 cost report data. If provider attests after 12/31/2010 cost report has been submitted, that data will be used. Final payment � payment year is 2011. The FYE 12/31/2011 cost report begins during the payment year. Final payment will be determined when the 12/31/2011 cost report is settled

42. Acute Care Hospital Incentive Payments Incentive Payment Calculation [Initial Amount] * [Medicare Share] * [Transition Factor] Initial Amount is $2,000,000 + [$200 per discharge for discharges from 1,150 to 23,000] Medicare Share based on days and charity Numerator = I/P Part A days + I/P Part C days Denominator = Total Inpatient days * ((Total eligible charges � charges attributable to charity care)/Total eligible charges) Transition Factor phases down the incentive payments over the four-year period

43. CAH Incentive Payments A qualifying CAH receives an incentive payment for the reasonable costs incurred for the acquisition of depreciable assets, such as computers and associated hardware and software, necessary to administer certified EHR technology CAH can expense the acquisition of these assets in a single year rather than depreciate the costs over the useful life of the asset.

44. CAH Incentive Payments If a qualifying CAH incurs non-depreciable expenses related to implementing or maintaining its EHR system, those expenses will not be included in the incentive payment calculation. If assets are rented, the rent expense cannot be included in the incentive payment. The rent expense may be an allowable cost for Medicare in the cost reporting period in which expense is incurred.

45. CAH Incentive Payments Initial incentive payment will be based on data obtained from the latest submitted cost report (currently FYEs 10/1/2009 through 9/30/2010) and a review of the documentation submitted by the provider to support the acquisition costs incurred for certified EHR technology. Final incentive payment will be determined using data from the cost report that begins during the payment year.

46. CAH Incentive Payments Incentive Payment Calculation [Reasonable Costs] * [[Medicare Share] + 20%] (Not to exceed 100%) Reasonable Costs determined by review of supporting documentation Medicare Share based on days and charity Numerator = I/P Part A days + I/P Part C days Denominator = Total Inpatient days * ((Total eligible charges � charges attributable to charity care)/Total eligible charges)

47. Important Dates April 2011 � Attestation for Medicare EHR incentive program begins May 2011 � Issuance of Medicare EHR incentive payments begins 7/3/2011 � Last day for eligible hospitals to begin their 90-day reporting period to demonstrate meaningful use for FFY 2011 11/30/2011 � Last day for eligible hospitals and CAHs to register and attest to receive an incentive payment for FFY 2011

48. EHR Incentive Program Resources www.cms.gov/ehrincentiveprograms/ 42 CFR Section 495 � Standards for Electronic Health Record Technology Incentive Program

49. GME & IMEChange in Audit ProcessDistribution of Additional Residency Positions

50. GME & IMEChange in Audit Process November 2010 � Official Communication sent to all NY/CT teaching hospitals and associations (refer to that document for detailed procedure change) Change is effective for Desk Reviews started on and after 10/1/2010 and for FYEs that did not go through an overlap reconciliation process (FYEs 6/30/09 & forward) The new process applies to all National Government Services Audit & Reimbursement regions

51. GME & IMEChange in Audit Process New Process Theory of disallowing entire rotation has been reconsidered Only days associate with an overlap will be removed

52. GME & IMEChange in Audit Process New Process (Cont�d) Example Hospital A: Resident John Doe rotation from 1/1/10 to 1/31/10 Hospital B: Resident John Doe rotation from 1/29/10 to 2/28/10 Old process: Full Time Equivalent (FTE) exclusion = .08 for both Hospital A & B New process: FTE exclusion = .01 for both hospital A & B

53. GME & IMEChange in Audit Process New Process (Cont�d) IRIS files will continue to be loaded into master database No review of the data will be considered until the time of the desk review At the time of the desk review, the level of additional review will be based on the current year FTEs filed with the cost report

54. GME & IMEChange in Audit Process New Process (Cont�d) If further review of FTEs is determined necessary, the auditor will utilize the reports from the database as the starting point for review Reports will be reconciled, if there is a material variance to the cost report, the hospital will be contacted before taking further action If overlaps are an issue, rotation schedules will be requested to verify actual assignment

55. GME & IMEChange in Audit Process Notes National Government Services will not perform reopenings to account for change in process If you have simultaneously matched residents contact Tom Casagrande to have this information included into the National Government Services database. We recommend this request be made soon after the cost report filing: Tom Casagrande National Government Services, Inc. 100 Roscommon Drive, Suite # 308 Middletown, CT 06457 1-860-638-5807 Thomas.Casagrande@wellpoint.com

56. GME & IMEDistribution of Additional Residency Positions Affordable Care Act (ACA), P.L. 111-148, Section 5503 75 FR 72147 November 24, 2010 (starts at pg 72147) Generally, if a hospitals �reference resident level� is less than its �otherwise applicable resident limit� its FTE resident cap(s) will be reduced by 65 percent of the difference between its �otherwise applicable resident limit� and its �reference resident level�

57. GME & IMEDistribution of Additional Residency Positions �Reference resident level�: The highest number of un-weighted allopathic and osteopathic FTE residents in any of the three most recent cost reporting periods ending and submitted to the Medicare contractor before 3/23/2010 Generally this would be E-3 pt IV line 3.05 for GME and E pt A line 3.08 for IME 12/31 FYE cycle, generally we would utilize the 12/31/06, 12/31/07, and 12/31/08 cost reports 6/30 FYE cycle, generally we would utilize the 6/30/07, 6/30/08, and 6/30/09 cost reports The highest number of FTEs is measured independently for GME and IME, the reference cost report could be different for each

58. GME & IMEDistribution of Additional Residency Positions �Otherwise applicable resident limit�: FTE cap for the same period as the �reference resident level,� adjusted in a particular period by any other applicable FTE resident cap adjustments, such as: New Programs Medicare GME affiliation agreements Emergency Medicare GME affiliation agreements Hospital mergers Urban hospitals with a separately accredited rural training track program MMA cap reductions (not increases) Generally this would be E-3 pt IV line 3.04 for GME and E pt A line 3.07 for IME

59. GME & IMEDistribution of Additional Residency Positions Example from 11/24/10 FR pg 72155:

60. GME & IMEDistribution of Additional Residency Positions Medicare GME Affiliated Group Handled differently per the Medicare and Medicaid Extenders Act signed into law on 12/20/2010 Not covered in the 11/24/2010 Federal Register Details included in the March 14, 2011 Federal Register starting at pg. 13515. These will have a different approach in determining the reference cost reporting period and reduction for this review Refer to the 3/14/11 federal register for more info

61. GME & IMEDistribution of Additional Residency Positions Notable Exclusions: Rural hospitals with fewer than 250 beds NY teaching hospitals that at any point in time voluntarily participated in the NY GME demonstration project (section 402 of P.L. 90-248): Applicable hospital must demonstrate that it has a specified plan in place to fill the unused positions by 3/23/2012 Specific plans were to be submitted directly to CMS (not the Medicare contractor) by 1/21/11, CMS reviews will be incorporated in the overall reviews done by the Medicare contractors

62. GME & IMEDistribution of Additional Residency Positions Notable exclusions (cont�d): Low Utilization Cost Reports: Unless hospital has a cap and filed E-3 pt IV in at least one of its three most recent cost reports ending before 3/23/10 New teaching hospitals: exempt if they have not established a permanent cap due to three-year building period (permanent cap must be in affect for all three eligible reference cost reporting periods)

63. GME & IMEDistribution of Additional Residency Positions Audits of Reference Cost Reporting Periods Reviews to be done by Medicare contractor (not CMS) Generally the review will consist of a combination of cost reports NPRd, submitted (prior to 3/23/2010), desk review/audited but not NPRd, or subject to desk review/audit during this timeframe National Government Services is responsible for reviewing the teaching hospitals in NY and CT (approximately 130 in total)

64. GME & IMEDistribution of Additional Residency Positions Audits of Reference Cost Reporting Periods (Cont�d) Results of review will be shared with each individual teaching hospital for review before submission to CMS Once final they will be shared with CMS CMS generally expects this process to be finalized by 7/1/2011 By law, once final this is not subject to administrative or judicial review

65. GME & IMEDistribution of Additional Residency Positions Audits of Reference Cost Reporting Periods (Cont�d) Medicare auditors may request documentation from hospitals to complete this review This could be around the time frames for which many 12/31 hospital contacts will be preparing their 2010 cost reports We recommend this be factored into your internal planning

66. GME & IMEDistribution of Additional Residency Positions Awarding of Additional Slots: NY teaching hospitals do not fall into the category of hospitals eligible to receive additional slots as a result of this review Generally, NY hospital caps will either stay the same or be reduced

67. GME & IMEDistribution of Additional Residency Positions Awarding of additional Slots (Cont�d): There is an opportunity for hospitals who received residents from closed teaching hospitals to obtain permanent cap increases as part of a separate review (Section 5506 the of ACA) Applies to residents received from hospitals that closed after 3/23/08 (refer 11/24/10 FR pg 72230 for list of hospital already closed between 3/23/08 and 8/3/10) CMS will make this determination (not the Medicare contractor) Refer to full details outlined in the 11/24/10 federal register, applications due to CMS by 4/1/2011 for already closed hospitals)

68. Questions?

69. Gene NickersonDirector207-253-3325gene.nickerson@wellpoint.com Warren WillisManager860-638-5801warren.willis@wellpoint.com

70. Sandra O�ConnorManager315-442-4986sandra.o�connor@wellpoint.com Angie TysonManager315-442-4759angela.tyson@wellpoint.com

71. Christine OberlanderLead Auditor860-638-5816christine.oberlander@wellpoint.com Kevin GloriosoLead Auditor315-442-4046kevin.glorioso@wellpoint.com

72. Pam VanArsdaleLead Auditor513-419-3695Pam.VanArsdale@wellpoint.comChristine ChamberlainLead Reimbursement Analyst315-442-4039christine.chamberlain@wellpoint.com