2014 Will Be a Very Good Whine

Details regarding the roll-out of provisions of the Affordable Care Act (ACA) have been emerging slowly and often with a sleight of hand. The proposed Federal Fiscal Year 2014 PPS rules modified the proxy payment ratio from the 75% DSH pool, effective October 1, 2013, from an expected ratio of uncompensated care to a ratio based on low income days compared to national volumes.

Testing a CFO’s juggling skills, in addition to the rollout of the ACA, California Medicaid is moving to a DRG-based payment system starting July 1, 2013. Further, selected California counties will be participating in a dual eligible demonstration project where Medicare fee for service patients, who are dually eligible for Medi-Cal, will be enrolled in a Managed Care Plan administered by the State. The final notable shot to a hospital’s budget is the 2% sequestration adjustment on all hospital payments that started April, 2013.

Adding to the funding shifts caused by various initiatives, states are hoping to withdraw or reduce spending budgets for county health care services in light of the anticipated bounty of cash that will flow in the form of insurance payments for services provided to the now (anticipated) insured patient populations. Suffice it to say this will be a challenging year ahead.

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