CMS asked to overlook Medicare math errors that could cost Mass. hospitals $115M

To prevent Massachusetts hospitals from losing $115 million in Medicare funding over accounting mistakes at a single small hospital, Partners Healthcare is asking CMS to use corrected data to calculate reimbursements, even though the deadline for corrections has passed.

As reported in May, a quirk in Medicare rules gives Partners a disproportionate impact on the state’s reimbursement rates. It owns Nantucket Cottage Hospital, the state’s only rural hospital, and since Medicare rules require rural hospitals to be paid as least as much as urban facilities for employee wage reimbursement, Nantucket sets the floor for the entire state.

The Boston Globe reported this is typically an advantage due to Nantucket’s high cost of living resulting in higher wages. But this year, consultants hired by Partners erroneously reported lower wages by overestimating hours and not including enough physician hours and overtime pay. Partners didn’t submit corrected data to CMS until April 5—two months after the deadline to submit corrections.

Now hospitals are beginning to estimate how much they would lose unless CMS changes its policies and uses the corrected data. Springfield, Mass.-based Baystate Health would be among the biggest losers at $35 million, according to MassLive.com

“It's obviously very concerning," said Baystate spokesman Ben Craft. "It's premature to get into specifics, but there's no doubt there would be a significant impact for us."  

Among other hospitals in area, Mercy Medical Center would lose $10 million, while Cooley Dickinson Hospital in Northampton would lose $3.7 million, according to WWLP-TV.  

The Massachusetts Hospital Association (MHA) has been working with the state’s congressional delegation to urge CMS to use the updated data, rather than base reimbursements on the errors.

“Hospitals are already under financial strain, so being hit with this reduction in the area wage index is going to cause very serious problems,” MHA executive vice president and general counsel Jeff Gens said to MassLive.

Gens expects CMS will decide whether to use the corrected data by August, which is when it release inpatient hospital reimbursement rates for Medicare.