HAI warns resubmitted hospital financials complicate target adjustments; staff will present options

HAI staff told the board on March 25 that resubmitted hospital annual financial disclosure reports (AFDRs) have created uncertainty in identifying high‑cost outlier hospitals used to set sector target adjustments.

Staff explained the AFDR complete dataset—published each fall—has been the basis for prior high‑cost hospital adjustments. Hospitals may resubmit prior‑year AFDRs; resubmitted files are processed and made available in HAI’s CRS system, but the complete dataset used for target setting does not automatically incorporate revisions. Staff said several hospitals with adjusted sector targets had resubmitted prior‑year data and that some other facilities had pending resubmissions in the review queue.

Ty Christensen, audit manager for the counter reporting system, described the nature of typical resubmissions: many corrections relate to payer category assignments and other technical elements; HAI receives roughly 100 resubmissions annually (spread through the year), and the complexity of reviews can vary widely. HAI staff noted that some resubmissions involve multi‑year adjustments to payer categories and that full validation takes time.

Because statute sets a March 1 deadline for staff recommendations that feed into the target‑setting timeline, staff concluded it is not operationally feasible to commit to incorporating all potential revisions for the 2028 process. Instead, staff said they will present board options in late 2026 that may include analyses based on the published complete dataset and a parallel set based on resubmissions that HAI has audited by a set cut‑off date. Staff emphasized the need for a clear, one‑time process to avoid continuous resubmissions that could be abused to alter prior‑year baselines.

Hospital representatives urged staff to incorporate validated resubmissions when re‑running the high‑cost analysis, saying being labeled a high‑cost hospital has reputational and practical consequences (contracting with payers, negotiations). Union and consumer advocates disagreed about the net effect and emphasized consumer protection and transparency. Staff committed to bringing options and a proposed process back to the board in the months ahead.