Sources and Uses of Funds

(1) Payments from the Health Safety Net Trust Fund through Fiscal Year 2024. (a) Payment Adjustments. Acute hospital payments established under 101 CMR 614.06 may be adjusted to reflect additional funding made available during the fiscal year or to reflect the shortfall allocation in accordance with 101 CMR 614.03(1)(b). The Health Safety Net may reserve up to 10% of available funding to ensure that funding is available for the entire fiscal year. (b) Shortfall Allocation. Through fiscal year 2024, the Health Safety Net office, using the best data available, estimates the projected total reimbursable health services provided by acute hospitals and community health centers; total medical hardship services; total bad debt for emergency and urgent care services; and total Health Safety Net administrative expenses. If the Health Safety Net office determines that, after adjusting for projected community health center payments and administrative expenses, Health Safety Net payments to acute hospitals will exceed available funding, the Health Safety Net office allocates the funding in a manner that reflects each acute hospital’s proportional financial requirements for Health Safety Net payments through a graduated payment system. The Health Safety Net office allocates the shortfall to disproportionate share hospitals and other acute hospitals as follows. 1. Disproportionate Share Hospital. The Health Safety Net office determines disproportionate share hospital status using data reported on the hospital cost report for the source year. 2. Allocation Method. The Health Safety Net office allocates the shortfall as follows. a. Determine the ratio of each acute hospital’s total patient care costs to the sum of all acute hospitals’ total patient care costs. b. Multiply this ratio by the total shortfall amount. c. If calculated amount is greater than an acute hospital’s allowable health safety net payments, then the shortfall allocation is limited to the acute hospital’s allowable health safety net payments. If an acute hospital’s allowable health safety net payment is $0 or less, then the shortfall allocation is limited to $0. d. The Health Safety Net’s gross liability to each acute hospital is limited by the acute hospital’s allowable health safety net payments less the shortfall allocation calculated in 101 CMR 614.03(1)(b)2.a. through c. e. Each disproportionate share hospital is paid the greater of i. 85% of its allowable Health Safety Net payments; or ii. the revised payment calculated according to the shortfall methodology in 101 CMR 614.03(1)(b)2.a. through e. (2) Payments from the Health Safety Net Trust Fund Beginning Fiscal Year 2025. (a) Payment Adjustments. Acute hospital payments established under 101 CMR 614.06 may be adjusted to reflect additional funding made available during the fiscal year or to reflect the shortfall allocation in accordance with 101 CMR 614.03(2)(b). The Health Safety Net may reserve up to 10% of available funding to ensure that funding is available for the entire fiscal year. (b) Shortfall Allocation. For fiscal years beginning on or after October 1, 2024, the Health Safety Net office, using the best data available, estimates the projected total reimbursable health services provided by acute hospitals and community health centers; total medical hardship services; total bad debt for emergency and urgent care services; and total Health Safety Net administrative expenses. If the Health Safety Net office determines that, after adjusting for projected community health center payments and administrative expenses, Health Safety Net payments to acute hospitals will exceed available funding, the Health Safety Net office allocates the funding in a manner that reflects each acute hospital's proportional financial requirements for Health Safety Net payments through a graduated payment system. The Health Safety Net office allocates the shortfall to disproportionate share hospitals and other acute hospitals as follows. 1. Disproportionate Share Hospital. The Health Safety Net office determines disproportionate share hospital status using data reported on the hospital cost report for the source year. 2. Allocation Method. The Health Safety Net office allocates the shortfall as follows. a. Determine the ratio of each acute hospital's total patient care costs to the sum of all acute hospitals' total patient care costs. b. Multiply this ratio by the total shortfall amount. c. If calculated amount is greater than an acute hospital's allowable Health Safety Net payments, then the shortfall allocation is limited to the acute hospital's allowable Health Safety Net payments. If an acute hospital’s allowable Health Safety Net payment is $0 or less, then the shortfall allocation is limited to $0. d. The Health Safety Net's gross liability to each acute hospital is limited by the acute hospital's allowable Health Safety Net payments less the shortfall allocation calculated in 101 CMR 614.03(2)(b)2.a. through c. e. Subject to available funds, all disproportionate share hospitals are paid at an equal percentage of their total allowable Health Safety Net payments, up to an amount equal to 85% of such allowable Health Safety Net payments, after which each disproportionate share hospital is paid the greater of i. 85% of its allowable Health Safety Net payments; or ii. the revised payment calculated according to the shortfall methodology in 101 CMR 614.03(2)(b)2.a. through e. (3) Payments from the Health Safety Net Trust Fund beginning Fiscal Year 2026. (a) Payment Adjustments. Acute hospital payments established under 101 CMR 614.06 may be adjusted to reflect additional funding made available during the fiscal year or to reflect the funding allocation in accordance with 101 CMR 614.03(3)(b). The Health Safety Net may reserve up to 10% of available funding to ensure that funding is available for the entire fiscal year. (b) Funding Allocation. For fiscal years beginning on or after October 1, 2025, the Health Safety Net office, using the best data available, estimates the projected total reimbursable health services provided by acute hospitals and community health centers; total medical hardship services; total bad debt for emergency and urgent care services; and total Health Safety Net administrative expenses. If the Health Safety Net office determines that, after adjusting for projected community health center payments and administrative expenses, Health Safety Net payments to acute hospitals will exceed available funding, then the Health Safety Net office allocates the funding in a manner that reflects each acute hospital's proportional financial requirements for Health Safety Net payments through a graduated payment system. The Health Safety Net office allocates funding to disproportionate share hospitals (DSH) and other acute hospitals (non-DSH) as follows. 1. Allocation Method. The Health Safety Net office allocates the funding as follows. a. Distribute funding to DSH such that each DSH receives up to an initial reimbursement cap of 85% of its allowable Health Safety Net payments before funding is distributed to non-DSH, calculated as follows. i. If total available funding is equal to or greater than the sum of 85% of all DSHs’ total allowable Health Safety Net payments, each DSH receives 85% of its allowable Health Safety Net payments, and any remaining funding is made available for non-DSH in accordance with 101 CMR 614.03(3)(b)1.b. ii. If total available funding is less than the sum of 85% of all DSHs’ total allowable Health Safety Net payments, calculate each DSH’s relative public payer mix adjustment factor. iii. Multiply each DSH’s relative public payer mix adjustment factor by its allowable Health Safety Net payments to determine its adjusted allowable Health Safety Net payments. iv. Divide each DSH’s adjusted allowable Health Safety Net payments by the total adjusted allowable Health Safety Net payments for all DSH and then multiply by the total funding available for all hospitals. v. If the resulting value for any DSH is greater than 85% of its allowable Health Safety Net payments, the amounts exceeding 85% of such allowable Health Safety Net payments is redistributed to DSH that have not yet reached their 85% initial reimbursement cap, until all funding has been distributed or all DSH have received 85% of their allowable Health Safety Net payments, whichever occurs first. b. If funding is available after each DSH receives 85% of its allowable Health Safety Net payments, distribute funding to non-DSH such that each non-DSH receives up to an initial reimbursement cap of 75% of its allowable Health Safety Net payments before funding is distributed above the DSH and non-DSH initial reimbursement caps, calculated as follows. i. If total remaining available funding is equal to or greater than the sum of 75% of all non-DSHs’ total allowable Health Safety Net payments, each non-DSH receives 75% of its allowable Health Safety Net payments, and any remaining funding is made available for all hospitals in accordance with 101 CMR 614.03(3)(b)1.c. ii. If total available funding is less than the sum of 75% of all non-DSHs’ total allowable Health Safety Net payments, calculate each non-DSH’s relative public payer mix adjustment factor. iii. Multiply each non-DSH’s relative public payer mix adjustment factor by its allowable Health Safety Net payments to determine its adjusted allowable Health Safety Net payments. iv. Divide each non-DSH’s adjusted allowable Health Safety Net payments by the total adjusted allowable Health Safety Net payments for all non-DSH and then multiply by the total funding available for all hospitals. v. If the resulting value for any non-DSH is greater than 75% of its allowable Health Safety Net payments, the amounts exceeding 75% of such allowable Health Safety Net payments is redistributed to non-DSH that have not yet reached their 75% initial reimbursement cap, until all funding has been distributed or all non-DSH have received 75% of their allowable Health Safety Net payments, whichever comes first. c. If funding is available after each DSH receives 85% of its allowable Health Safety Net payments and each non-DSH receives 75% of its allowable Health Safety Net payments, distribute remaining funding across all hospitals in proportion to their remaining allowable Health Safety Net payments. (4) Final Reconciliation. The Health Safety Net office may implement a final reconciliation between the Health Safety Net and an acute hospital or a community health center for the fiscal year. The final reconciliation is calculated based on the Health Safety Net’s payments to the acute hospital or community health center calculated pursuant to 101 CMR 614.06 and 101 CMR 614.07, and the payments made to the acute hospital or community health center during the fiscal year. The final reconciliation may occur when the Health Safety Net office determines that it has sufficiently completed relevant claims adjudication and audit activity, including for claims that were remediated by a payment or void during the fiscal year. For the purposes of the final reconciliation, the Health Safety Net office will not consider, for the purposes of payments, claims that exceed the billing deadlines or fail to meet other billing rules or grievance procedures established at 101 CMR 613.00: Health Safety Net Eligible Services. The final reconciliation will be completed not later than two fiscal years after the end of the fiscal year being reconciled. The Health Safety Net office will notify acute hospitals and community health centers upon completion of the final reconciliation for each fiscal year. A fiscal year will be closed and no further adjustments to payments in that fiscal year will occur after the final reconciliation. (5) Post-reconciliation adjustments. The Health Safety Net office will recoup amounts identified as overpayments to acute hospitals or community health centers for any fiscal year in which the overpayments are identified, regardless of whether the final reconciliation described in 101 CMR 614.03(4) has been completed. In such instances, the Health Safety Net office will recoup through payments to the acute hospital or community health center otherwise owed for fiscal years that have not had final reconciliation until the full amount of overpayment has been recouped. The Health Safety Net office may also adjust for underpayments, as it determines necessary in its sole discretion. In such instances, the Health Safety Net office will make payments to providers who were underpaid, as determined by the Health Safety Net office, through fiscal years that have not had final reconciliation. (101 CMR 614.04 and 614.05 Reserved)