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Provider Notice Issued 01/26/2022

Date:   Janiuary 26, 2022

To:       Enrolled Hospitals:  Chief Executive Officers; Chief Financial Officers; and Patient Accounts Managers

Re:      System Issue Regarding Repeal of 3.5% Rate Reduction 

 ________________________________________________________________________________________________________ This notice is a follow-up to the hospital provider notice dated August 26, 2021. The information below applies to Medicaid fee-for-service (FFS) claims only.

In the earlier notice, the Department advised hospitals of a change in hospital reimbursement policy. Pursuant to Public Act 102-0016, the Department repealed the 3.5% SMART Act (Public Act 97-0689) reduction to reimbursement for hospital services effective with dates of service beginning July 1, 2021. However, the Department has determined that the system logic to eliminate the reduction was not applied to all hospitals, and some hospitals are continuing to receive the reduction. 

The Department is working on a resolution as a priority. Once the logic is updated, the Department will initiate adjustments to the affected claims. The adjustments will be identified with Adjustment Reason Code 8560 – Reimburse Smart Act Reductions After 7/1/21. No further action is required by the providers.

Questions regarding this notice may be directed to a billing consultant in the Bureau of Professional and Ancillary Services at 877-782-5565.


Kelly Cunningham, Administrator
Division of Medical Programs



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