In its continuing efforts to support hospital participation in the Medicaid program, the Louisiana Department of Health and Hospitals (DHH) has begun making supplemental payments to hospitals who have qualifying practitioners through its Physician Supplemental Payment Program.

The Centers for Medicare and Medicaid Services approved the program which allows DHH to make payments to non-state owned public hospitals for dates of service effective July 1, 2010.  Under this program, physicians and other professional service practitioners who are employed or contracted by a non-state owned governmental entity, such as a service district hospital, may qualify for supplemental payments for services delivered to Medicaid patients. 

To receive supplemental payments, hospitals must submit documentation to identify which practitioners linked to their hospital qualify based on the established criteria. The applicable rules state that practitioners who are licensed by the State of Louisiana, enrolled as a Louisiana Medicaid provider and are employed by, or under contract to provide services, meet the qualifying criteria and the hospital may therefore receive additional payments for the covered services of these providers. Although the first two criteria are straightforward, the employment arrangement element can be complicated if the practitioner in question is not, for example, a payroll employee. In fact, additional arrangements are outlined that also meet the necessary criteria.

One such scenario allows for the practitioner to have a contract with the facility to provide services and the practitioner assigns the payment of claims to the facility that then bills for the claims. Another situation allows the practitioner to bill for the claims using a non-facility billing number for the provided services and the practitioner assigns the supplemental payments to the facility.

In this instance, an “employer/employee” type arrangement must exist which has thus far been interpreted to mean a hospital’s general supervision of the services.  Overall, though, these options recognize and assist with the purpose of the program promoting continued participation in Louisiana’s Medicaid program and helping to boost recipient access to services through these enhanced payments to public providers.

To capture the payments once the public hospital identifies a qualifying practitioner, or practitioner group, a data request form and a physician certification form must be submitted to compute the supplemental payments.  The payments are calculated as the difference between the Medicaid rate and the average amount that would have been paid at the “community rate.”

The “community rate” is found by determining the average amount that would have been paid by commercial insurers for the same services. The calculations and resulting supplemental payments essentially result in total payments for eligible services provided to a Medicaid patient equal to the average commercial rate. 

By giving hospitals this enhanced payment opportunity to help minimize the reimbursement gap, Louisiana gets closer to achieving its goal of continued and improved health care access for the state’s uninsured and Medicaid patients.

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