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Finding relief from TEFRA cost limits.

C J Fletcher1

  • 1Arthur Anderson, Miami, FL, USA.

Healthcare Financial Management : Journal of the Healthcare Financial Management Association
|February 7, 1996
PubMed
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Healthcare providers excluded from Medicare can seek reimbursement beyond Tax Equity and Fiscal Responsibility Act (TEFRA) limits. Documenting extraordinary costs may grant rate adjustments or new base years.

Area of Science:

  • Healthcare Reimbursement Policy
  • Health Economics
  • Medicare Regulations

Background:

  • The Tax Equity and Fiscal Responsibility Act (TEFRA) imposes limits on cost-per-case rate increases for inpatient care for providers not under Medicare's prospective payment system.
  • Typically, costs exceeding these TEFRA limits are not reimbursed, impacting provider finances.

Purpose of the Study:

  • To examine the conditions under which healthcare providers can obtain reimbursement exceeding TEFRA limits.
  • To understand the process and criteria for seeking adjustments to cost-per-case rates.

Main Methods:

  • Analysis of the petitioning process for healthcare providers seeking exceptions to TEFRA reimbursement limits.
  • Review of circumstances that justify rate adjustments, including extraordinary costs, wage increases, and reporting period incompatibilities.

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Main Results:

  • Healthcare providers can petition fiscal intermediaries and the Health Care Financing Administration for reimbursement beyond TEFRA limits.
  • Successful petitions require thorough documentation of substantial cost increases due to specific circumstances.
  • Relief may be granted as a rate adjustment or, exceptionally, a new base year assignment.

Conclusions:

  • The TEFRA reimbursement structure allows for exceptions under documented extraordinary circumstances.
  • Providers must navigate a lengthy but potentially rewarding process to secure additional funding when facing significant cost escalations.