Date: June 3, 2022
To: Enrolled Hospitals: Chief Operating Officers; Chief Financial Officers; and Patient Accounts Managers
Re: Hospital Average Commercial Rate (ACR) Data Collection
This notice alerts hospitals to data that must be submitted to HFS to maintain hospital funding levels under the Hospital Assessment Program.
Federal Medicaid policy limits the rates that can be paid for Medicaid services, including hospital inpatient and outpatient services. In fee-for-service (FFS) Medicaid, the upper payment limit is based on Medicare cost principles. Under managed care, states can pay above the FFS upper payment limit up to the average commercial rate (ACR). Illinois payments through managed care, including base payments, directed payments and pass-through payments exceed Medicare cost principles. As a result, the federal Centers for Medicare and Medicaid Services (CMS) requires the state to demonstrate that payment levels do not exceed the ACR in order to continue to make the Directed Payments and Pass-through payments starting January 1, 2023.
The ACR demonstration is done on a class-by-class basis according to the classes defined in HFS' Directed Payment Preprints. To be clear, the limit is applied to hospital classes, not individual hospitals. But to develop and demonstrate the ACR for each class, HFS must collect data from each individual hospital.
To ensure that HFS has time to analyze the data and provide it to CMS, HFS is starting the process now. Early collection and analysis of the data will give HFS time to take steps necessary to maintain funding levels for all hospital classes in 2023 and beyond.
HFS has retained its actuarial services firm, Milliman, to collect and analyze the data. HFS has worked with the Illinois Health and Hospital Association (IHA) to develop the template for submitting the data and Milliman has established a secure portal that allows each hospital to submit the data directly to them. The template is here.
Data must be submitted for the five highest volume commercial payers for each hospital. Data must be available for audit in the hospital's paid claims data, if requested. Data from Medicare, Medicare Advantage and Medicaid MCOs, worker's compensation or other payers not subject to market conditions should not be used.
IHA, with participation from HFS and Milliman, will conduct two webinars for hospitals to further explain the process and answer questions hospitals may have. Hospitals need only attend one. The webinars will be held on June 7, 2022, at 2:00 p.m. and on June 9, 2022, at 8:30 a.m. IHA will provide information on how to join the webinars to all hospitals.
HFS and Milliman have established a secure data portal for hospitals to submit data. Any hospital accessing the portal to submit data will not be able to see data submitted by any other hospital. Only Milliman will have the ability to download and view data submitted through the portal. Working with IHA, HFS will register each hospital's CFO to be able to access the portal using their email address. Upon request, hospital CFOs will be able to delegate their access to another employee of their hospital. In order to ensure security, access to the portal is limited to the CFOs and specific delegated employees at each hospital. Instructions for accessing the portal will be communicated to these individuals.
Please submit the data by July 15, 2022. Questions may be submitted to HFS.Hospitals@illinois.gov
Kelly Cunningham, Administrator
Division of Medical Programs