SHOPP update – HB 1031 and OHCA rule

Posted On: 03/13/2013

House Bill 1031 (Cox/David) passed in the House today, March 13, and now goes to the Senate. The bill extends the SHOPP Act sunset from Dec. 31, 2014 to Dec. 31, 2017.

The Supplemental Hospital Offset Payment Program (SHOPP) is Oklahoma Medicaid’s hospital assessment program. Under SHOPP, hospitals pay a quarterly assessment to the state, which uses the money with federal matching to improve Medicaid payment rates.

While working for the passage of HB1031, OHA has also been working with the Oklahoma Health Care Authority (OHCA) on a related update to their rule on the administration of SHOPP. OHCA proposed an amended rule that would:

Make changes required by the extension of SHOPP through 2017, including updates to the periods for which net patient revenue will be used as the basis of the assessment;
Clarify procedures for handling any additional payments or recoupments;
Create some cash flow cushion for the program so that predictable supplemental payments can be disbursed even though some hospitals miss the due date for assessments.

For four out of the five assessment due dates since the program began last year, some hospitals have not met the due date for paying their assessment despite a 5 percent penalty for late payments. OHCA has had to apply other funds in order to make the program’s supplemental payments to hospitals. To deal with potential cash shortages caused by late payments, OHCA proposed reducing the first supplemental payment each year to 20 percent of the annual total, and paying 30 percent in the final quarter, rather than paying out 25 percent each quarter.

The SHOPP Hospital Advisory Committee conferred with OHCA staff Feb. 25 regarding the proposed rule. After this meeting, OHCA proposed reducing the first quarter payment to 23.6 percent rather than 20 percent of the annual total. The balance of 1.4 percent would be paid out in the fourth quarter of the year. OHA’s Council on Finance & Strategic Information discussed the revised rule on March 1 and concurred with the proposal.

Following a public hearing on March 4, the SHOPP rule and OHCA’s other proposed rules will be on the agenda of their Medical Advisory Committee on March 13, and of the OHCA Board on March 14. (Rick Snyder)