My previous article summarized the basics of Medicaid upper payment limits (UPL) and Louisiana’s developing Low-Income and Needy Care Collaboration Agreement (LINCCA) program.

This article moves beyond the basics to review the detailed rules that apply to the LINCCA program and how these rules offer opportunities as well as enforce limitations for hospital service providers.

The Louisiana Administrative Code sets out the parameters for hospital participation in the state’s UPL program through a low income and needy care collaboration. This collaboration is verified with a Low Income and Needy Care Collaboration Agreement or what has become known simply as the “LINCCA.” The collaboration is also the precipitating factor that allows “qualifying” hospitals to receive quarterly supplemental payments for inpatient services rendered during the quarter.

Although the collaboration seems straightforward, there are several mandates that must be followed. For example, the term “qualifying” used in the rules is central to determining which hospitals can participate to receive the UPL payments. As mentioned above, in order to qualify for supplemental payments through this program, the hospital must be a non-rural, non-state acute care hospital that is owned or operated by a private entity. This hospital must affiliate with a state or local governmental entity through a Low Income and Needy Care Collaboration Agreement for the specific purpose of providing healthcare services to low income and needy patients. To ensure that both parties to the LINCCA qualify, each party must execute and submit a certification.           

In addition, the LINCCA contains a number of requirements that must be satisfied by each party to the agreement. The private hospital and governmental entity must certify that there has been no exchange of payments or donations between the participating entities. Each party must strictly adhere to applicable state and federal rules and regulations to ensure compliance is achieved. This includes warranties by the private hospital that the low income and needy care services are only provided where the governmental entity does not have a contractual or statutory obligation to do so. The governmental entity must confirm that it has public funds available to contribute as the non-federal share of Medicaid payments to the private hospital and that the funds are not provider-related donations.

If the program rules are met and a valid LINCCA has been entered into between the qualifying hospital and the state or local governmental entity, the qualifying hospital will receive quarterly supplemental payments with the maximum aggregate payments to all qualifying hospitals not to exceed the available upper payment limit per the state fiscal year. The quarterly payment distribution is also limited by law to one-fourth of the lesser of:

            a.  the difference between each qualifying hospital’s inpatient Medicaid billed charges and Medicaid payments the hospital receives for covered inpatient services provided to Medicaid recipients.  Medicaid billed charges and payments are based on a 12 consecutive month period for claims data selected by the DHH; or

            b.  for hospitals participating in the Medicaid Disproportionate Share Hospital (DSH) Program, the difference between the hospital’s specific DSH limit and the hospital’s DSH payments for the applicable payment period.

Although the UPL program rules seem onerous, the resulting distributions can mean access to additional reimbursement to qualifying private hospitals well above standard Louisiana Medicaid rates, substantial cost savings to governmental hospitals and expanded care to needy patients. By understanding the rules and creating collaborations that work within these rules, hospitals across the state can use this program to help acquire the funds needed to provide care for the uninsured and Medicaid patients.

           

Ms. Thompson is an associate in the Baton Rouge office of Breazeale, Sachse & Wilson, L.L.P.

 

 

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