Health Hippo: Revenue & Reimbursement

Health Hippo: Revenue & Reimbursement


The chief virtue that language can have is clearness, and nothing detracts from it so much as the use of unfamiliar words ~Hippocrates

Tax exempt status for non-profit health care entities results in savings of more than $20 billion per year for them. 501(c)(3) organizations must not allow earnings to inure to private individuals, provide substantial benefits to private interests, make substantial attempts to influence legislation, participate in political campaigns or engage in activites that violate public policy. Non-profits can lose their status or face intermediate sanctions for engaging in such activities. Although the IRS has not specified charity care as a requirement for non-profit health care entities to maintain their status, states may have more stringent community benefit requirements. In addition, the Affordable Care Act added new requirements that hospital organizations must satisfy in order to be described in section 501(c)(3), as well as new reporting and excise taxes.

U.S. Code

  • Affordable Care Act: Revenue provisions
    • Sec. 9001. Excise tax on high cost employer-sponsored health coverage.
    • Sec. 9002. Inclusion of cost of employer-sponsored health coverage on W–2.
    • Sec. 9003. Distributions for medicine qualified only if for prescribed drug or insulin.
    • Sec. 9004. Increase in additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses.
    • Sec. 9005. Limitation on health flexible spending arrangements under cafeteria plans.
    • Sec. 9006. Expansion of information reporting requirements.
    • Sec. 9007. Additional requirements for charitable hospitals.
    • Sec. 9008. Imposition of annual fee on branded prescription pharmaceutical manufacturers and importers.
    • Sec. 9009. Imposition of annual fee on medical device manufacturers and importers.
    • Sec. 9010. Imposition of annual fee on health insurance providers.
    • Sec. 9011. Study and report of effect on veterans health care.
    • Sec. 9012. Elimination of deduction for expenses allocable to Medicare Part D subsidy.
    • Sec. 9013. Modification of itemized deduction for medical expenses.
    • Sec. 9014. Limitation on excessive remuneration paid by certain health insurance providers.
    • Sec. 9015. Additional hospital insurance tax on high-income taxpayers.
    • Sec. 9016. Modification of section 833 treatment of certain health organizations.
    • Sec. 9017. Excise tax on elective cosmetic medical procedures.
    • Sec. 9021. Exclusion of health benefits provided by Indian tribal governments.
    • Sec. 9022. Establishment of simple cafeteria plans for small businesses.
    • Sec. 9023. Qualifying therapeutic discovery project credit.
    • Sec. 10214. Appropriations.
    • Sec. 10901. Modifications to excise tax on high cost employer-sponsored health coverage.
    • Sec. 10902. Inflation adjustment of limitation on health flexible spending arrangements under cafeteria plans.
    • Sec. 10903. Modification of limitation on charges by charitable hospitals.
    • Sec. 10904. Modification of annual fee on medical device manufacturers and importers.
    • Sec. 10905. Modification of annual fee on health insurance providers.
    • Sec. 10906. Modifications to additional hospital insurance tax on high-income taxpayers.
    • Sec. 10907. Excise tax on indoor tanning services in lieu of elective cosmetic medical procedures.
    • Sec. 10908. Exclusion for assistance provided to participants in State student loan repayment programs for certain health professionals.
    • Sec. 10909. Expansion of adoption credit and adoption assistance programs.
  • Medicare Modernization Act:Tax Incentives For Health and Retirement Security
    • Sec. 1201 Health savings accounts.
    • Sec. 1202 Exclusion from gross income of certain Federal subsidies for prescription drug plans.
    • Sec. 1203 Exception to information reporting requirements related to certain health arrangements.
  • Health Insurance Portability and Accountability Act: Tax-Related Health Provisions
    • Sec. 300. Amendment of 1986 Code.
    • Sec. 301. Medical savings accounts.
    • Sec. 311. Increase in deduction for health insurance costs of self- employed
    • Sec. 321. Treatment of long-term care insurance.
    • Sec. 322. Qualified long-term care services treated as medical care.
    • Sec. 323. Reporting requirements.
    • Sec. 325. Policy requirements.
    • Sec. 326. Requirements for issuers of qualified long-term care insurance contracts.
    • Sec. 327. Effective dates.
    • Sec. 331. Treatment of accelerated death benefits by recipient.
    • Sec. 332. Tax treatment of companies issuing qualified accelerated death benefit
    • Sec. 341. Exemption from income tax for State-sponsored organizations
      providing health coverage for high-risk individuals.
    • Sec. 342. Exemption from income tax for State-sponsored workmen’s compensation reinsurance organizations.
    • Sec. 351. Organizations subject to section 833.
    • Sec. 361. Distributions from certain plans may be used without additional tax
      to pay financially devastating medical expenses.
    • Sec. 371. Organ and tissue donation information included with income tax
      refund payments.
    • Sec. 500. Amendment of 1986 Code.
    • Sec. 501. Denial of deduction for interest on loans with respect to
      company-owned life insurance.
    • Sec. 511. Revision of income, estate, and gift taxes on individuals who lose
      United States citizenship.
    • Sec. 512. Information on individuals losing United States citizenship.
    • Sec. 513. Report on tax compliance by United States citizens and residents living abroad.
    • Sec. 521. Repeal of financial institution transition rule to interest
      allocation rules.


Code of Federal Regulations

  • 42 CFR Chapter I, Subchapter D GRANTS
    • PART 50 Policies of General Applicability (50.201 – 50.607)
    • PART 51 Requirements Applicable to the Protection and Advocacy for Individuals With Mental Illness Program (51.1 – 51.46)
    • PART 51a Project Grants for Maternal and Child Health (51a.1 – 51a.8)
    • PART 51b Project Grants for Preventive Health Services (51b.101 – 51b.606)
    • PART 51c Grants for Community Health Services (51c.101 – 51c.507)
    • PART 51d Mental Health and Substance Abuse Emergency Response Procedures (51d.1 – 51d.10)
    • PART 51e – 51g [Reserved]
    • PART 52 Grants for Research Projects (52.1 – 52.9)
    • PART 52a National Institutes of Health Center Grants (52a.1 – 52a.9)
    • PART 52b National Institutes of Health Construction Grants (52b.1 – 52b.14)
    • PART 52c Minority Biomedical Research Support Program (52c.1 – 52c.8)
    • PART 52d National Cancer Institute Clinical Cancer Education Program (52d.1 – 52d.9)
    • PART 52e National Heart, Lung, and Blood Institute Grants For Prevention And Control Projects (52e.1 – 52e.9)
    • PART 52h Scientific Peer Review of Research Grant Applications and Research and Development Contract Projects (52h.1 – 52h.12)
    • PART 53 Grants, Loans and Loan Guarantees for Construction and Modernization of Hospitals and Medical Facilities (53.111 – 53.156)
    • PART 54 Charitable Choice Regulations Applicable to States Receiving Substance Abuse Prevention and Treatment Block Grants and/or Projects For Assistance in Transition From Homelessness Grants (54.1 – 54.13)
    • PART 54a Charitable Choice Regulations Applicable to States, Local Governments and Religious Organizations Receiving Discretionary Funding Under Title V of the Public Health Service Act, 42 U.S.C. 290aa, et seq., for Substance Abuse Prevention and Treatment Services (54a.1 – 54a.14)
    • PART 55a Program Grants for Black Lung Clinics (55a.101 – 55a.301)
    • PART 56 Grants for Migrant Health Services (56.101 – 56.801)
    • PART 57 Grants For Construction of Teaching Facilities, Educational Improvements, Scholarships And Student Loans (57.201 – 57.3202)
    • PART 58 Grants for Training of Public Health and Allied Health Personnel
    • PART 59 Grants for Family Planning Services (59.1 – 59.215)
    • PART 59a National Library of Medicine Grants (59a.1 – 59a.17)
    • PART 60 Health Education Assistance Loan Program (60.1 – 60.61)
    • SUBPART A General Provisions (412.1 – 412.10)
    • SUBPART B Hospital Services Subject to and Excluded From the Prospective Payment Systems for Inpatient Operating Costs and Inpatient Capital-Related Costs (412.20 – 412.30)
    • SUBPART C Conditions for Payment Under the Prospective Payment Systems for Inpatient Operating Costs and Inpatient Capital-Related Costs (412.40 – 412.52)
    • SUBPART D Basic Methodology for Determining Prospective Payment Federal Rates for Inpatient Operating Costs (412.60 – 412.64)
    • SUBPART E Determination of Transition Period Payment Rates for the Prospective Payment System for Inpatient Operating Costs (412.70 – 412.79)
    • SUBPART F Payments for Outlier Cases, Special Treatment Payment for New Technology, and Payment Adjustment for Certain Replaced Devices (412.80 – 412.89)
    • SUBPART G Special Treatment of Certain Facilities Under the Prospective Payment System for Inpatient Operating Costs (412.90 – 412.109)
      • Sec. 412.90 General rules.
      • Sec. 412.92 Special treatment: Sole community hospitals.
      • Sec. 412.96 Special treatment: Referral centers.
      • Sec. 412.98 [Reserved]
      • Sec. 412.100 Special treatment: Renal transplantation centers.
      • Sec. 412.101 Special treatment: Inpatient hospital payment adjustment for low-volume hospitals.
      • Sec. 412.102 Special treatment: Hospitals located in areas that are reclassified from urban to rural as a result of a geographic redesignation.
      • Sec. 412.103 Special treatment: Hospitals located in urban areas and that apply for reclassification as rural.
      • Sec. 412.104 Special treatment: Hospitals with high percentage of ESRD discharges.
      • Sec. 412.105 Special treatment: Hospitals that incur indirect costs for graduate medical education programs.
      • Sec. 412.106 Special treatment: Hospitals that serve a disproportionate share of low-income patients.
      • Sec. 412.107 Special treatment: Hospitals that receive an additional update for FYs 1998 and 1999.
      • Sec. 412.108 Special treatment: Medicare-dependent, small rural hospitals.
      • Sec. 412.109 Special treatment: Essential access community hospitals (EACHs).
    • SUBPART H Payments to Hospitals Under the Prospective Payment Systems (412.110 – 412.140)
    • SUBPART I Adjustments to the Base Operating DRG Payment Amounts Under the Prospective Payment Systems for Inpatient Operating Costs (412.150 – 412.168—412.169)
    • SUBPART J [Reserved]
    • SUBPART K Prospective Payment System for Inpatient Operating Costs for Hospitals Located in Puerto Rico (412.200 – 412.220)
    • SUBPART L The Medicare Geographic Classification Review Board (412.230 – 412.280)
    • SUBPART M Prospective Payment System for Inpatient Hospital Capital Costs (412.300 – 412.374)
      • Sec. 412.300 Scope of subpart and definition.
      • Sec. 412.302 Introduction to capital costs.
      • Sec. 412.304 Implementation of the capital prospective payment system.Basic Methodology for Determining the Federal Rate for Capital-Related Costs
      • Sec. 412.308 Determining and updating the Federal rate.
      • Sec. 412.312 Payment based on the Federal rate.
      • Sec. 412.316 Geographic adjustment factors.
      • Sec. 412.320 Disproportionate share adjustment factor.
      • Sec. 412.322 Indirect medical education adjustment factor.Determination of Transition Period Payment Rates for Capital-Related Costs
      • Sec. 412.324 General description.
      • Sec. 412.328 Determining and updating the hospital-specific rate.
      • Sec. 412.331 Determining hospital-specific rates in cases of hospital merger, consolidation, or dissolution.
      • Sec. 412.332 Payment based on the hospital-specific rate.
      • Sec. 412.336 Transition period payment methodologies.
      • Sec. 412.340 Fully prospective payment methodology.
      • Sec. 412.344 Hold-harmless payment methodology.
      • Sec. 412.348 Exception payments.
      • Sec. 412.352 Budget neutrality adjustment.
      • Sec. 412.370 General provisions for hospitals located in Puerto Rico.
      • Sec. 412.374 Payments to hospitals located in Puerto Rico.
    • SUBPART N Prospective Payment System for Inpatient Hospital Services of Inpatient Psychiatric Facilities (412.400 – 412.434)
    • SUBPART O Prospective Payment System for Long-Term Care Hospitals (412.500 – 412.541)
    • SUBPART P Prospective Payment for Inpatient Rehabilitation Hospitals and Rehabilitation Units (412.600 – 412.632)


  • Provena Covenant Medical Center vs. the (Illinois) Department of Revenue (2010) (Department of Revenue acted properly in denying charitable and religious property tax exemptions requested by Provena Hospitals. The Illinois Supreme Court noted that “a mere 302 of its 110,000 admissions received reductions in their bills based on charitable considerations”)
  • Your Home Visiting Nurse Services v. Shalala (1999) (PRRB does not have jurisdiction to review a fiscal intermediary’s refusal to reopen a reimbursement determination)
  • Geisinger v. Commissioner of the Internal Revenue
    (1994) (health maintenance organization not entitled to exemption from federal income
    taxation as a charitable organization under 26 U.S.C. 501(c)(3) or as an integral part of a larger exempt
  • PRRB Decisions Persistent issues in dispute include allocation of costs, ambulance services, bad debt, capital costs, delayed NPRs, DSH, inpatient rehabilitation rate election, loss on disposal of assets, medical education, non-allowable costs, outlier recoupment, PS&R statistics, quality data reporting, reopenings, sampling and extrapolation, hospital status, TEFRA exceptions and wage index.
    • Jurisdictional Decisions
    • Allocation of Costs
      • Lemuel Shattuck Hospital (2012)(Intermediary allocation of physician costs between Part A and Part B was improper)
      • Riverview Center for Jewish Seniors (2008)(Intermediary’s adjustment to remove Nursing Administration, Medical Records, and Social Services allocation statistics from the Provider’s ancillary cost centers on the Medicare cost report were proper)
      • Saint Mary’s Medical Center (2005)(Physician compensation should be: (1) included as part of a non-reimbursable physician offices cost center and (2) part of the allocation base used to distribute A&G expenses).
      • Cardinal Hill Rehabilitation Hospital (2003)(methodology proposed by the Provider to allocate the costs between inpatient and outpatient services was improper)
      • Little Company of Mary Hospital (1997)(Intermediary improperly included the Provider’s neonatal unit beds and days in the indirect medical education (“IME”) calculation and graduate medical education (“GME”) patient load calculation and did not properly allocate the Provider’s investment income consistent with the allocation of interest expense)
    • Ambulance Services
      • Prosser Memorial Hospital (2011)(undisputed evidence of other ambulance companies within 35 miles of the Provider so Provider did not meet criteria for cost reimbursement for its services)
      • Flagstaff Medical Center (2009)(Intermediary improperly applied a per trip ambulance cost limit to Provider costs incurred on or after January 1, 2000)
      • Munson Medical Center (2008)(Intermediary correctly limited the Provider’s ambulance reimbursement to its charges)
      • Decatur County General Hospital (2007)(ambulance cost per trip limits were improperly low because the Intermediary improperly applied the 5.8% outpatient operating cost reduction and the 10% outpatient capital cost reduction to base year costs)
      • St. Anthony Hospital Systems (1998)(Intermediary’s adjustment reclassifying the Provider’s payments for aircraft base charges from capital-related costs to operating expenditures was improper)
    • Bad Debt
      • Accord Health (2014) (exclusion of unbilled crossover bad debts was proper since Provider failed to show debt was uncollectable when claimed as worthless)
      • Ashton Hall Nursing & Rehabilitation (2014)(PRRB not bound by PRM manual must bill policy as applied to SNFs)
      • Mountain States Health Alliance (2013)(Intermediary properly disallowed bad debts where collection efforts differed between Medicare and non-Medicare debts)
      • Maine Medical Center (2012)(exclusion of crossover bad debts improper where Provider actively pursued remittance advices)
      • Lakeland Regional Medical Center (2012)(Intermediary improperly disallowed the Provider’s claimed Medicare bad debts solely on the ground that accounts related to such bad debts were still pending at outside collection agencies)
    • Capital Costs
      • Mountain View Regional Medical Center (2013)(capital amounts limited to federal IPPS rate during initial short cost reporting period)
      • Memorial City Hospita (2011)(PRRB majority declines to take jurisdiction over issue of whether the Provider is entitled to be reimbursed for the interest implicit in the capital lease of the hospital facilities and equipment)
      • Southcrest Hospital (2010)(based upon its status as a new provider during the transition period, PRRB finds that the Provider is entitled to payment under the hold-harmless methodology)
      • Select Medical (2010)(each host hospital operated as a hospital for more than two years prior to the execution of the lease agreements for a portion of the same space that the Providers were later located and therefore not considered “new hospitals”)
      • HealthEast Woodwinds Hospital (2008)(based upon status as a new provider during the transition period, PRRB finds that the Provider is entitled to payment under the hold-harmless methodology)
    • NPRs
      • llinois Masonic Medical Center (2010)(PRRB has no jurisdiction over Medicaid eligible days that were not specifically considered within the implementation of a revised Notice of Program Reimbursement)
      • National Parkinson Foundation (2009)(Intermediary’s adjustments reflected in the revised Notices of Program Reimbursement (NPR), that reduced allowable home office costs, were proper)
      • Valley Presbyterian Hospital (2009)(no jurisdiction to review either Intermediary denials of reopening or Intermediary final determinations issued more than three years before filing)
      • Medical Center of North Hollywood (2008)(Intermediary can’t recoup an overpayment relative to the Provider’s 1987 cost reporting period through a revised Notice of Program Reimbursement (NPR) issued in January 2002)
      • Mono General Hospital (1998)(denial of request for additional payment due to volume decrease, as Provider was not an approved Sole Community Hospital during the applicable period)
    • Disproportionate Share Hospital
      • Owensboro Medical Health System (2014)(medical assistance/general assistance days associated with patients covered under the Kentucky State Plan properly excluded from the numerator of the Medicaid proxy of the Medicare disproportionate share hospital)
      • Health Alliance Hospital Leominster (2013)(observation bed days for the Provider’s fiscal year ending September 30, 2003 (“FY 2003”) were improperly excluded from the calculation of the bed count for purposes of qualifying for a disproportionate share hospital)
      • Memorial Hospital of Salem County (2011)(The Provider is allowed an increase of 1,001 Medicaid eligible days for a total of 2,254 in the calculation of its DSH Medicaid fraction)
      • Indiana DSH-HCI Days Group (2011)(Intermediary properly excluded Indiana HCI program days from the numerator of the Providers’ Medicaid proxy for the Medicare DSH calculation.)
      • St. Barnabas (2010)(Intermediary properly refused to include New Jersey Charity Care Program days in the numerator of the Providers’ Medicaid proxy)
    • Inpatient Rehabilitation Rate Election
      • Good Shepherd Rehabilitation Hospital (2011)(Intermediary properly reimbursed the Provider based on the blended rate for inpatient rehabilitation facilities versus the 100 percent federal prospective payment system rate for IRFs)
      • Penrose/ St. Francis Health Services (2011)(even if the Intermediary has now determined that it used the wrong data in the making the outlier payments, well-established Medicare rules bind the Intermediary from retroactively correcting those payments)
      • St. Joseph’s Hospital and Health Center (2007)(remanded to the Intermediary and CMS to consider whether the Provider’s exception request is justified and whether additional indirect costs should be added to the TEFRA limit)
      • Phelps Memorial Hospital (2003)(Provider did not meet the requirements for obtaining the appropriate approval to add beds to its distinct-part rehabilitation unit for Medicare certification purposes)
      • Harbor Healthcare and Rehabilitation Center (2007)(sampling methodology used by the Intermediary to disallow charges for the Provider’s rehabilitation services was improper for failure to use any of the Provider’s records)
    • Loss on Disposal of Assets
      • Marian Medical Center (2011)(no bona fide sale because the Provider did not receive “reasonable compensation” for its assets)
      • Harrisburg Hospital/ Seidle Memorial Hospital (2008)(adjustments disallowing the Providers’ claimed loss on the disposal of assets due to a change of ownership resulting from a consolidation were contrary to the regulatory requirements and the case remanded to the Intermediary for the proper calculation of the loss pursuant to the governing regulatory and manual provisions and consistent with the Board’s findings concerning allocation to intangibles)
      • Polyclinic Medical Center (2008)(in a consolidation there is no buyer and seller as contemplated in the regulation. Rather, each of the consolidating parties is in essence both a “seller” and a “buyer” thus negating the concept of arm’s-length bargaining)
      • UPMC- Braddock Hospital (2007)(Provider’s claimed loss on disposal of depreciable assets as a result of the merger is allowable subject to: (1) inclusion of $3,000,000 of consideration from HHC, and (2) review and audit of the Provider’s “Booth method” allocation of consideration relating to the merger)
      • UPMC- St. Margaret Hospital (2006)(The loss resulting from the statutory merger is allowable under Medicare regulations. The case is remanded to the Intermediary to review the Provider’s calculation using the proportionate value method)
    • Medical Education
      • IME Research FTE Group Seattle (2013)(PRRB found no evidence to support that time spent in research involved attendance at didactic seminars, so assignment to the inpatient prospective payment system portion and/or the outpatient department of the Providers was properly excluded from the full-time equivalent counts (“FTE”) for indirect medical education (“IME”) payment in the Providers’ IME FTE Count Cost Reports)
      • University Hospital Newark (2013)(PRRB declines to exercise discretionary powers to decide case involving medical education pass-through costs related to university’s nursing education and allied health program)
      • Bergen Regional Medical Center, (2012)(PRRB doesn not have jurisdiction over the calculation of the Provider’s 1996 Indirect Medical Education (“IME”) Cap Reduction for the redistribution of unused residency slots)
      • Immanuel Medical Center (2012)(Intermediary properly eliminated the Provider’s indirect medical education (IME) and direct graduate medical education (DGME) reimbursement for its graduate medical education activities)
      • Doctors Medical Center of Modesto (2012)(Intermediary properly eliminated all direct medical education and indirect medical education reimbursement for the Provider’s family practice residency program)
    • Non-allowable Costs
      • Hi-Desert Medical Center (2007)(Intermediary’s adjustment related to Old Capital-Related Costs and New Capital- Related Costs/Major Movable Equipment are reversed. The Intermediary’s adjustment related to Operation of Plant is affirmed. The Board remands to the Intermediary to determine whether the Provider properly accumulated New Capital-Related Costs/Building and Fixtures and allocated them based on appropriate square footage to the benefiting cost centers)
      • Health Visions Home Care (1999)(Intermediary’s adjustment reclassifying non-allowable costs of community liason employees to a non-reimbursable cost center was proper)
    • Outlier Recoupment
      • St. Francis Hospital (2013)(outliers were underpaid because of an erroneous overpayment of DSH)
      • Penrose/ St. Francis Health Services (2011)(Intermediary improperly recouped alleged overpayments for outlier payments made to the Provider for inpatient rehabilitation services furnished during the cost reporting periods at issue)
      • Mayo Clinic Hospital (2009)(Intermediary did not use the proper cost-to-charge ratios to calculate the Provider’s outlier payments. The Intermediary is to base the Provider’s outlier payments on data found in the Provider’s tentatively settled cost reports)
      • The Ohio State University Hospital (2000)(Intermediary’s adjustment to the outlier payments was proper)
      • The Ohio University Hospital (1999)(Intermediary’s adjustment to the outlier payments was proper)
    • PS&R Statistics
      • Unique Care Home Health (2010)(Provider did not meet the burden of proof necessary to establish inaccuracies in the PS&R data)
      • East Lake Community Health Center (2006)(Absent a countervailing regulation or program instruction, or proof that the PS&R data is inaccurate, the Board finds that the PS&R must be used to determine settlement data and concludes that the Intermediary’s adjustment was proper)
      • Angeles Home Health Care (2003)(Intermediary properly determined Medicare visits based on the PS&R report and included denied Medicare visits in both the “other” and the total visit categories)
      • Sterling Physical Therapy and Rehabilitation (1998)(Provider did not submit sufficient evidence to prove to the satisfaction of the Board that the PS&R was incorrect)
    • Quality Data Reporting
      • Pacific Alliance Medical Center (2011)(because the Provider failed to satisfy the RHQDAPU program requirements for submission of quality data in the time specified by the Secretary, it is not entitled to the full market basket update)
    • Reopenings
    • Sampling & Extrapolation
      • George Washington University Hospital (2011)(Intermediary improperly extrapolated the sample error to the population in adjusting Medicaid eligible days for purposes of the DSH calculation. The Intermediary is directed to limit the reduction in Medicaid eligible days related to the statistical sampling process to those days actually audited and found to be non-allowable)
      • Doctors Hospital (2012)(Intermediary improperly disallow Medicare bad debt expense from the sample review where the Provider was unable to produce all of the documentation from the patient file used to substantiate the indigency determination)
      • Port Huron Hospital (2008)(sampling methodology used by the Intermediary for determining the Provider’s entitlement to bad debt payment was stipulated to by Provider)
      • Harbor Healthcare and Rehabilitation Center (2007)(Intermediary’s failure to use any of the Provider’s records in the sample that was used to reduce the Provider’s therapy costs or to justify the rationale for the application of the sample that actually was used in making the reduction was improper)
    • Hospital Status
    • TEFRA Exceptions
      • Davies Medical Center (2010)(Provider had a right to file an exception request from the Revised NPR but failed to file it within 180 days)
      • City of Hope National Medical Center (2010)(Provider’s request was not received within 180 days of its NPR)
      • St. Joseph’s Hospital and Health Center (2009)(While the Provider received additional funds due to its increased limits, the Provider may nevertheless be entitled to TEFRA relief from the additional indirect costs, if it can establish that they resulted from some atypical reason for which the regulations allow an exception)
      • Summit Medical Center (2008)(Intermediary’s use of the inflation-adjusted 1984 base year TEFRA target rate for computing the target rate applicable to the Provider’s psychiatric unit for the years in issue was correct)
      • University of Texas M.D. Anderson Cancer Center (2008)(because Provider failed to quantify the net impact of the new drug technologies, the Intermediary’s denial of than adjustment to the TEFRA rate-of- increase ceiling was proper)
    • Wage Index
      • Post Retirement Wage Index Appeals (2013)(Fiscal Intermediaries’ adjustments to pension costs for the affected providers did not result in erroneous wage indexes)
      • Cleveland Clinic Hospital Cleveland (2013)(contractor’s decision to exclude certain physician Medicare Part A administrative costs under time study codes L and O from the Provider’s fiscal year (FY) 2002 wage index data in calculating the FY 2006 wage index was improper)
      • Battle Creek Wage Index Group (2013)(remanded for recalculation of Provider’s wage index for failure to notify state hospital association)
      • HLB Wage Index Pension and Post Retirement Cost Groups (2013)(Intermediary properly eliminated or reduced the pension and postretirement benefit (“PRB”) costs of the University of California medical centers (“UC Providers”), and the pension costs of the Catholic Healthcare West medical centers (“CHW Providers”) for the purposes of computing their prospective payment system (“PPS”) wage indexes, with the exception of CWH providers for FY 2008)
      • Fort Wayne (Indiana) FFY 2002 MSA Wage Index Group (2012)(Intermediary appropriately included paid hours not actually worked by employees for purposes of calculating wage index)


  • Affordable Care Act Tax Provisions Regulations, revenue rulings, notices, FAQs and press releases from the IRS related to the tax provisions of the ACA.
  • Foreign Account Tax Compliance Act FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts, focusing on U.S. taxpayers foreign financial accounts and offshore assets and foreign financial institutions reporting financial accounts in which U.S. taxpayers hold a substantial ownership interest. The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.
  • New Requirements for 501(c)(3) Hospitals Under the Affordable Care Act Each 501(c)(3) hospital organization is required to meet four general requirements on a facility-by-facility basis: 1) establish written financial assistance and emergency medical care policies, 2) limit amounts charged for emergency or other medically necessary care to individuals eligible for assistance under the hospital’s financial assistance policy, 3) make reasonable efforts to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy before engaging in extraordinary collection actions against the individual, and 4)conduct a community health needs assessment (CHNA) and adopt an an implementation strategy at least once every three years.
  • Medicaid: Use of Claims Data for Analysis of Provider Payment Rates (GAO 2014) Medicaid fee-for-service claims data can be a useful source of information for analyzing provider payments. These data have the potential to provide a more complete representation of provider payment than do fee schedules, as claims data can capture both the distribution and frequency of actual payments to providers.
  • Expiration of the Health Coverage Tax Credit Will Affect Participants’ Costs and Coverage Choices as Health Reform Provisions Are Implemented (GAO 2012) Expiration of the Health Coverage Tax Credit (HCTC) and implementation of Patient Protection and Affordable Care Act (PPACA) premium tax credits, cost-sharing subsidies, and Medicaid expansion will affect HCTC participants’ costs for health plans in multiple ways. Projections from GAO’s analysis of 2010 Internal Revenue Service (IRS) data show that most HCTC participants in 2014 will likely be eligible for less generous tax credits under PPACA than the HCTC.
  • Medicaid: Providers in Three States with Unpaid Federal Taxes Received Over $6 Billion in Medicaid Reimbursements (GAO 2012) About 7,000 Medicaid providers in three selected states (Florida, New York, and Texas) had approximately $791 million in unpaid federal taxes from calendar year 2009 or earlier. This represents about 5.6 percent of the Medicaid providers reimbursed by the selected states during 2009. These 7,000 Medicaid providers with unpaid federal taxes received a total of about $6.6 billion in Medicaid reimbursements during 2009.
  • Small Employer Health Tax Credit: Factors Contributing to Low Use and Complexity (GAO 2012) Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible. While 170,300 small employers claimed it, estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million.
  • Nonprofit Hospitals: Variation in Standards and Guidance Limits Comparison of How Hospitals Meet Community Benefit Requirements (GAO 2008) Nonprofit hospitals qualify for federal tax exemption from the Internal Revenue Service (IRS) if they meet certain requirements. Since 1969, IRS has not specified that these hospitals have to provide charity care to meet these requirements, so long as they engage in activities that benefit the community. IRS’s community benefit standard allows nonprofit hospitals broad latitude to determine the services and activities that constitute community benefit. Furthermore, state community benefit requirements that hospitals must meet in order to qualify for state tax-exempt or nonprofit status vary substantially in scope and detail. For example, 15 states have community benefit requirements in statutes or regulations, and 10 of these states have detailed requirements.
  • Nonprofit Sector: Increasing Numbers and Key Role in Delivering Federal Services (GAO 2007) The nonprofit sector is an important means through which public services are delivered and national goals addressed. The federal government increasingly relies on networks, often involving nonprofits that address many issues–health care, education, and human services, for example. Because nonprofit organizations play a key role as partners with the federal government, there is a need to better understand the sector.
  • Thousands of Organizations Exempt from Federal Income Tax Owe
    Nearly $1 Billion in Payroll and Other Taxes
    (GAO 2007) Over 1.8 million entities are recognized
    as tax exempt organizations by the Internal Revenue Service (IRS). Exempt organizations are still required to remit
    amounts withheld from employees’ wages for federal income tax, Social Security and Medicare, as well as other
    taxes. GAO identified numerous government contractors, Medicare providers, and charities participating in the
    Combined Federal Campaign (CFC) with billions in unpaid federal taxes.
  • Tax Policy:
    Pharmaceutical Industry’s Use of the Research Tax Credit
    (GAO 1994) In 1991,
    Congress enacted the research and experimentation tax credit to encourage businesses to do research. GAO estimates
    that the pharmaceutical industry earned $1.24 billion worth of these tax credits between 1981 and 1990.
  • Tax Policy: Health
    Insurance Tax Credit Participation Rate Was Low
    (GAO 1994). This report provides
    information on the health insurance tax credit, which was established to encourage low-income workers to buy
    private health insurance for their families.
  • Competition Between Tax-Exempt Organizations and Taxable
    (GAO 1988) GAO found that: (1) competition was a major concern to both communities
    because they were increasingly providing similar services; (2) complete data did not exist to quantify the exact
    nature, extent, and impact of the competition; (3) tax-exempt groups have grown significantly in number and types
    of activities; (4) tax-exempt groups have become more reliant on income-producing activities and less reliant on
    charitable and government sources of revenue to fund their activities; and (5) these income-producing activities
    may result in competition with taxable businesses
  • Information on Lobbying and Political Activities of
    Tax-Exempt Organizations
    (GAO 1987) Information on: (1) statutes which address political and
    lobbying activities by tax-exempt organizations; (2) statistics on the number and type of tax-exempt organizations
    which engage in political and lobbying activities; and (3) the Internal Revenue Service’s (IRS) program to monitor
    tax-exempt organizations, lobbying and political activities.


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