General Payment Provisions

(1) Payment Eligibility. To be eligible to receive payment from the Trust Fund, an acute care hospital must be: (a) licensed under M.G.L. c. 111, § 51, as defined by the Department of Public Health; and (b) a hospital with SRP below 120% of the median SRP, as determined by the Center. (2) Payment Conditions. (a) As a condition of receiving payments from the Trust Fund, EOHHS may require an eligible acute care hospital to provide an attestation, in a format prescribed by EOHHS, agreeing to an independent financial and operational audit to recommend steps to increase sustainability and efficiency of the acute care hospital. (b) EOHHS may also require that eligible acute care hospitals utilize payments received from the Trust Fund to conduct the independent financial and operational audit described in 101 CMR 701.04(2)(a) and/or to advance steps recommended in the audit for improving or continuing health care services that benefit the uninsured, underinsured, and MassHealth populations. (c) EOHHS may, via administrative bulletin or other written issuance, establish rules governing various conditions of payment, including, but not limited to, attestations, reporting requirements, compliance with payment conditions, penalties for noncompliance, and recovery. (3) Timing of Payments. EOHHS will direct payments to eligible acute care hospitals from the Trust Fund each state fiscal year in which funding is available in the Trust Fund, and may make such payments in installments. (4) Payment Methodology. (a) Data Source. 1. Determination of GPSR. GPSR is determined using Hospital Cost Reports submitted to the Center pursuant to 957 CMR 9.00: Hospital Financial Data Reporting Requirements. 2. Determination of SRP. SRP is determined using data submitted to the Center pursuant to 957 CMR 2.00: Payer Data Reporting. (b) Calculation of Median SRP. The Center will calculate annually a median SRP and identify acute care hospitals with SRP below 120% of the median SRP. (c) Payment Allocation. 1. EOHHS will allocate payments to eligible acute care hospitals based on: a. the proportion of each eligible acute care hospital’s GPSR to the combined GPSR of all eligible acute care hospitals; and b. The distance of each eligible acute care hospital’s SRP from 120 % of the median SRP such that eligible Acute Care Hospitals with SRP that fall further below 120 % of the median SRP receive proportionally greater payments. 2. Calculation of payments for eligible acute care hospitals. a. Calculate a hospital-specific GPSR weight, which is equal to 100 % plus the hospital’s percent of the combined GPSR of all eligible hospitals, using the following formula: [Hospitaln GPSR weight = 100% + (Hospitaln GPSR / Ʃ All hospitals GPSR)] b. Calculate a hospital-specific SRP weight, which is equal to the difference between the hospital’s SRP and 120 % of the median SRP, divided by the hospital’s SRP, using the following formula: [Hospitaln SRP weight = (120% of the median SRP – Hospitaln SRP) / Hospitaln SRP] Example: A hospital-specific SRP weight of 1.0 corresponds to a hospital with an SRP that is 60 % of the median SRP; that is: [(120 % of the median SRP) - (60% of the median SRP)] / (60% of the median SRP) = 1.0 3. For each hospital, a total weight is calculated by multiplying the hospital-specific GPSR weight calculated in 101 CMR 701.04(4)(c)2.a. by the hospital-specific SRP weight calculated in 101 CMR 701.04(4)(c)2.b., according to the following formula: [Total weight for Hospitaln = Hospitaln GPSR weight * Hospitaln SRP weight] 4. For each hospital, a normalized total weight is calculated by dividing the hospital- specific total weight described in 101 CMR 701.04(4)(c)3. by the combined total weight of all eligible acute care hospitals according to the following formula: [Normalized total weight for Hospitaln = Hospitaln total weight / Ʃ Total weight of all hospitals] 5. The potential payment for each hospital is calculated by multiplying the total funding available from the Trust Fund in a state fiscal year by the hospital’s normalized total weight calculated in 101 CMR 701.04(4)(c)4., according to the following formula: [Potential Payment for Hospitaln = Total funding available from the Trust Fund in a state fiscal year * Hospitaln normalized total weight]