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The amended PRRB rules will significantly change the way providers prepare for and prosecute appeals to the board. All providers and chain organizations should take stock of their longstanding as well as upcoming appeal issues to preserve their rights to pursue proper Medicare reimbursement. The rules' emphasis on front-end work by providers could require significant process changes for organizations.

CMS rules regarding what constitutes a patient day are inconsistent and often confusing. Hospitals and their advisers should have a clear understanding of CMS's rules regarding what constitutes a patient day, the impact of those rules on Medicare payment, and instances in which CMS's rules may be subject to challenge. Lack of familiarity with the finer points of these rules may result in substantial underpayments for services rendered.

Under CMS's hold-harmless policy, a hospital's Medicaid proxy for periods prior to 2000 may include certain state-only program days for patients who were not eligible for medical assistance under an approved Medicaid state plan if the hospital either received DSH payments that included the same type of days in previous cost-reporting periods settled before October 15, 1999, or filed an appeal citing exclusion of these days from the Medicare DSH formula before October 15, 1999.

Some Medicare intermediaries are reducing the disproportionate share hospital (DSH) payment by excluding labor/delivery room days and dual-eligible days from the DSH calculation. Some intermediaries are excluding maternity patients who are in a labor/delivery room at the census-taking hour unless the patient previously occupied a routine bed. Intermediaries also are excluding Medicaid-eligible days attributable to patients who are not entitled to payment under Medicare Part A. These adjustments are of questionable legal validity and hospitals should protect their rights to appeal these issues.