Medicaid reimbursement sought for cancer center

March 22, 2011|By ANDREW SCHOTZ |

ANNAPOLIS — The John R. Marsh Cancer Center in Washington County is in a unique position.

It’s part of Meritus Health, but isn’t at the hospital, and therefore doesn’t qualify for Medicaid reimbursement.

Del. John P. Donoghue, D-Washington, presented a bill on Tuesday to change that, making a “provider-based outpatient oncology center” eligible for reimbursement at a percentage of the applicable Medicare rate.

According to Raymond A. Grahe, Meritus Health’s vice president for financial services, who spoke during the hearing, the center had $2.6 million in charges during the last six years that were considered “charity care” because the system wasn’t reimbursed.

However, providers at the center get reimbursement.

“It’s the only facility in the state that’s in this peculiar situation,” Michael V. Johansen, a lobbyist for Meritus, told the Health and Government Operations Committee.

Attempts to get reimbursements the last several years failed, he said.

In a letter to the committee, Dr. Joshua M. Sharfstein, the secretary of the state Department of Health and Mental Hygiene, wrote that oncology services had been provided at the hospital, but the center moved to its own site in 2004.

He wrote that private insurance, Medicare and Medicaid managed-care organizations pay both provider charges and a facility fee for services.

“However, Medicaid fee-for-service (FFS) pays only provider charges,” his letter said. “Medicaid FFS does not have a reimbursement methodology for outpatient departments that are located off-site from the hospital and therefore the center is not enrolled as a Medicaid FFS provider.”

Sharfstein wrote that the department would need a State Plan Amendment to get permission from the federal Centers for Medicare and Medicaid Services for reimbursement.

In Grahe’s written comments, he said the center, at the state’s suggestion, first applied in 2005 as a free-standing provider, then several times since then. The state “has never denied that (the center) should be paid,” he wrote.

Referring to the center’s $2.6 million in costs over the last six years, Grahe said after the hearing, “Medicare would pay half, so you’re looking at $1.3 million. Medicaid would typically pay something less than that. We didn’t stipulate in the bill what they should pay. That would be up to negotiation and discussion.”

Medicaid is a federal-state program that helps pay for health care for the needy and disabled, while Medicare is a federal health insurance program for those over 65 and for the disabled.

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