RI gets OK to resume billing Medicaid for state hospital patients

PROVIDENCE — Rhode Island has been given the go-ahead to resume billing Medicaid for patients at the state hospital.

If allowed to recoup dollars spent during a billing hiatus that goes back more than a year to the belated discovery that Rhode Island had violated a federal ban on billing for psychiatric patients, the state could potentially recover tens of millions of dollars.

"The hospital is determining the fiscal impact, based upon a patient’s insurance coverage eligibility, their length of stay in the hospital, and the billable services they received,'' spokesman Randal Edgar said.

The decision by the U.S. Centers for Medicare & Medicaid Services was conveyed to the state's Health & Human Services Secretary Womazetta Jones on Thursday by letter.

The letter from acting director Rory Howe advised the state that CMS had approved "a cost-based reimbursement methodology for state-owned inpatient hospital services,'' dating back to April 1, 2020.

The letter presumably contains good news for the financially struggling hospital system.

The state's money-saving plans for downsizing the Eleanor Slater Hospital — with campuses in both Cranston and Burrillville — have been a lightning rod for controversy since they first surfaced in September and resurfaced in new Gov. Dan McKee's budget proposal.

The recently retired medical director of Zambarano has described the population there as individuals "with permanently life-altering medical and physical conditions such as: traumatic brain injury from gunshot wounds or accidents, spinal cord injury ... end­stage multiple sclerosis and Huntington's chorea, anoxic brain injury due to opioid overdose, quadriplegia, dementia with aggressive or self-injurious behaviors.''

The patients on the Cranston campus include those with mental disorders who were ordered there by a court.

The pending proposal: to build a new and smaller building on the Burrillville campus; close two buildings on the Cranston campus that have been home to long-term psychiatric patients and those on ventilators, and re-license the "Benton Center'' as an Institute for Mental Disease.

The Journal disclosed the hospital's Medicaid billing problem in March 2020.

As it was explained at the time: the state had run afoul of a federal prohibition against having more than 50% of the state’s general hospital population in psychiatric beds.

The state was out of compliance between August 2019 and Feb. 11, 2020. When internal finance staff belatedly discovered the problem, they suspended billing for federal reimbursement dollars.

The problem came to light after the state’s Office of Management and Budget advised the chairmen of the House and Senate finance committees that the Raimondo administration had hired Manatt, Phelps & Phillips, LLP "to review several of Eleanor Slater Hospitals (ESH) billing practices."

"Out of an abundance of caution, the state ceased billing [the Centers for Medicare and Medicaid services] for [Eleanor Slater Hospital] services in August, pending review,'' the OMB letter said.

The disclosure angered lawmakers, including House Finance Committee Chairman Marvin Abney, who said then: “In addition to the sheer magnitude of the money at stake here, I am troubled by the lack of disclosure.

“The problem appears to date back to last summer, and the administration has had numerous formal and informal opportunities to alert us to the potential problem. The governor submitted a revised spending plan to the legislature in January that doesn’t even hint at the problem, let alone provide for a contingency funding plan,'' Abney said of then-Gov. Gina Raimondo.

Then-Senate Finance Committee Chairman William J. Conley Jr. called it “incredibly frustrating to be learning now of a significant budget shortfall in the current year budget."

It remains unclear why the state did not resume billing after adjusting the patient mix to comply with what BHDDH director Kathryn Power has called a discriminatory federal rule.

But the revenue shortfall pegged at $20.6 million initially tripled and quadrupled, until the overall state budget hole was plugged with coronavirus relief dollars.

This article originally appeared on The Providence Journal: RI gets OK to resume billing Medicaid for state hospital patients

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