Hospitals qualify for Medicare DSH payments if the ratio of low-income patients treated by the hospital (called the disproportionate patient percentage, DPP) exceeds 15 percent.17 In addition, hospitals that are located in an urban area, have 100 or more beds, and can demonstrate that they derive more than 30 percent of their revenues from state and local government payments for indigent care provided to patients not covered by Medicare or Medicaid are eligible.18 The amount of the adjustment for hospitals qualifying under this alternative criteria is 35 percent.19 Adjustments for DPP hospitals vary with the hospitalís bed count, geographic classification and other factors.20 Like Medicaid DSH payments, Medicare DSH payments are unevenly distributed, with just 200 hospitals accounting for 38 percent of disbursements.21
What is Medicare disproportionate share hospital?
According to section 1886(d) (5) (F) of the Act, there are two methods for a hospital to qualify for the Medicare DSH adjustment. The primary method is for a hospital to qualify based on a statutory formula that results in the DSH patient percentage.
How does a hospital qualify for the Medicare DSH adjustment?
than 20.2%, the formula for determining the Medicare DSH adjustment is: 5.88% + [.825 x (DPP–20.2%)] 5.88% + [.825 x (35%–20.2%)] 5.88% + 12.21% = 18.09%. Urban hospitals with fewer than 100 beds are subject to a maximum DSH adjustment of 12%. Hospital A’s Medicare DSH adjustment is 12%. DSHs may also qualify for a low-volume hospital
How do you qualify for the disproportionate patient percentage program?
Disproportionate share hospitals are defined in Section 1886(d)(1)(B) of the Social Security Act. For more information, see the Eligibility Disproportionate Share Hospitals serve a significantly disproportionate number of low-income patients and receive payments from the Centers for Medicaid and Medicare Services to cover the costs of providing care to uninsured patients.
What changes did the Affordable Care Act make to Medicare DSH?
Apr 09, 2020 · According to the section of the Act mentioned above and the CMS website, “there are two methods for a hospital to qualify for the Medicare DSH adjustment. 1. The primary method for a hospital to qualify for the Medicare DSH adjustment is based on a statutory formula that results in the DSH patient percentage.” That formula is reviewed below. 2.
What is disproportionate share adjustment?
How is DSH percentage calculated?
What is a DSH percentage?
What is capital DSH?
What is considered a hospital acquired condition?
What is Medicare DSH?
What is IME payments from Medicare?
What is uncompensated care?
What is a pickle hospital?
What is the DSH adjustment for Medicare?
If a hospital’s DPP equals or exceeds a specified threshold amount, the hospital qualifies for the Medicare DSH adjustment. The Medicare DSH adjustment is determined by using a complex formula (the applicable formula is based on a hospital’s DPP).
What is the maximum DSH adjustment for hospitals?
Urban hospitals with fewer than 100 beds are subject to a maximum DSH adjustment of 12%. Hospital A’s Medicare DSH adjustment is 12%. DSHs may also qualify for a low-volume hospital payment adjustment.
What is DPP in Medicare?
The DPP equals the sum of the percentage of Medicare inpatient days (including Medicare Advantage inpatient days) attributable to patients entitled to both Medicare Part A and Supplemental Security Income (SSI) (including patient days not covered under Part A and patient days when patients exhaust their Part A benefits), and the percentage of total inpatient days attributable to patients eligible for Medicaid but not entitled to Medicare Part A.
How many beds does Hospital A have?
Hospital A has 62 beds and is in an urban area. It had 5,000 total patient days, 1,000 Medicaid/non-Medicare days, 2,000 Medicare Part A days, and 300 Medicare Part A/SSI days. Hospital A’s Medicare DPP is 35%.
Can hospitals receive Medicare DSH?
Hospitals qualify for the Medicare DSH payment adjustment using either the primary method or the alternate special exception method.
Where is Medicare DSH reported?
The Medicare DSH amount is typically reported annually on Worksheet E Part A of the Medicare cost report. Final eligibility is determined and could potentially be adjusted at cost report settlement by a provider’s Medicare administrative contractor, which is known as MAC.
When does a hospital need to include a detailed list of its Medicaid eligible days?
The fiscal year 2019 IPPS Final Rule stated that for cost reporting periods beginning on or after October 1, 2018 , each DSH-qualifying hospital must now include, as part of the cost report filing, a detailed listing of its Medicaid eligible days that corresponds to the Medicaid eligible days claimed in the cost report (and supports the DPP shown above) as supporting documentation.
Why was the DSH payment created?
The original intent of the Medicare DSH payment was to supplement providers who treated higher percentages of low-income Medicare patients because the costs to treat those patients were more expensive.
What is a DSH patient percentage?
The DSH patient percentage is the sum of two fractions meant to represent two at-risk populations: the under-served and the elderly and disabled.
What is the SSI fraction?
The SSI fraction, meanwhile, consists of Medicare Part A and C days where patients also have federal SSI benefits divided by the total hospital Medicare Part A and C patient days.
When did Medicare DSH become effective?
This program became effective for discharges occurring on or after May 1, 1986.”
Can a cost report be rejected?
This requirement affects the acceptability of the cost report. Again, without a detailed listing, a cost report will be deemed unacceptable and your report will be rejected.
How does the ACA affect Medicare DSH?
A. Beginning in FY 2014, the ACA decreases the base Medicare DSH payment to 25 percent of current levels .30 However, hospitals that continue to treat a large number of uninsured, non-elderly individuals will receive additional funding, reducing the impact of this decrease. These additional payments will be calculated on a hospital-by-hospital basis using a formula that takes into account three factors: the change in the hospitalís DSH payments under the ACA, the nationwide change (from 2013) in the percentage of the uninsured under-65 population, and the percentage of uncompensated care provided by the hospital compared to all other acute care hospitals. There is no administrative or judicial review regarding any estimate the Secretary of HHS makes in determining how these factors are calculated.31 These changes are expected to decrease Medicare DSH expenditures by over $22.1 billion between 2014 and 2019 – an approximately 28% reduction over baseline projections.32
How do hospitals qualify for DSH?
Hospitals qualify for Medicare DSH payments if the ratio of low-income patients treated by the hospital (called the disproportionate patient percentage, DPP) exceeds 15 percent.17 In addition, hospitals that are located in an urban area, have 100 or more beds, and can demonstrate that they derive more than 30 percent of their revenues from state and local government payments for indigent care provided to patients not covered by Medicare or Medicaid are eligible.18 The amount of the adjustment for hospitals qualifying under this alternative criteria is 35 percent.19 Adjustments for DPP hospitals vary with the hospitalís bed count, geographic classification and other factors.20 Like Medicaid DSH payments, Medicare DSH payments are unevenly distributed, with just 200 hospitals accounting for 38 percent of disbursements.21
How much will Medicaid DSH be reduced?
A. We donít yet know exactly how Medicaid DSH payments will change. Under the ACA, the Secretary of HHS is required to develop a methodology that will reduce the payments by $14.1 billion during the period 2014 to 2019, pursuant to a schedule set out in the ACA.24 These reductions increase over time, and by 2019 represent approximately a 50% reduction over baseline projections.25 The methodology, which has not yet been published, must impose the largest percentage reductions on states with the lowest percentage of uninsured individuals or those that do not target their DSH payments to hospitals that either have high Medicaid volumes or high levels of uncompensated care.26 It must also impose a smaller percentage reduction on low DSH states (those for which DSH expenditures are more than zero but less than three percent of annual Medicaid expenditures), and it must take into account the extent to which DSH allotments have been used to expand coverage under a Section 1115 demonstration project.27 Special treatment was included for Tennessee and Hawaii. Tennessee, which would otherwise have no DSH allotment for 2012 and 2013, will receive $47.2 million for each of the last three quarters of FY 2012 and $53.1 million for FY 2013.28 The DSH allotment for Hawaii for the last three quarters of FY 2012 will be $7.5 million and, thereafter, Hawaii will be treated as a low DSH state.29
How does DSH affect hospitals?
In states that do not expand Medicaid to all people up to 133% of the federal poverty line, the need for uncompensated care may remain relatively stable while the amount of DSH funds that were previously used to subsidize some of that care will fall substantially. This may lead some hospitals to provide less uncompensated care or aggressively pursue collection activities against uninsured individuals who receive such care. Advocates may be able to use state law and other provisions of the ACA to curb some of these practices if they occur.
What is a safety net hospital?
Charitable and safety-net hospitals have long provided uncompensated care to low- income and underserved individuals . In part to help offset the cost of this care, many of these hospitals receive funds through the Medicaid and Medicare Disproportionate Share Hospital (DSH) programs. On the assumption that the number of uninsured and underinsured people will fall precipitously beginning in 2014, the Patient Protection and Affordable Care Act (ACA) decreases the amount of DSH payments under both programs.
When will DSH be reduced?
A. Reductions in DSH payments will begin in October 2013 (federal fiscal year 2014) . Hospitals that currently receive a large amount of funding through either or both DSH programs will likely begin attempting to make up for this lost revenue long before 2013.33 This will likely be especially true in states that do not expand Medicaid, since the number of uninsured individuals in those states is likely to remain relatively stable while funding for uncompensated care will fall dramatically. There have already been a number of reports of safety-net and other hospitals failing to provide care to uninsured and underinsured people or providing that care and then aggressively pursuing patients to recover its cost. 34 The reductions in DSH funding may accelerate these types of actions, particularly in non-expansion states.
When was the DSH program established?
A. The Medicaid DSH program, first established in 1981 , provides payments to states to distribute to acute care hospitals and psychiatric facilities to help defray the costs incurred by those facilities in providing uncompensated care to low- income patients.2 Medicaid DSH payments are the largest source of federal funding for uncompensated care, with fiscal year 2011 allotments totaling nearly $11.3 billion.3 Under the Medicaid DSH program, each state is reimbursed for its DSH spending at its regular FMAP rate.4
What is disproportionate share hospital?
Currently, disproportionate share hospitals (DSHs) qualify for a DSH payment adjustment under a statutory formula that considers their Medicare utilization due to beneficiaries who also receive supplemental security income benefits and their Medicaid utilization. Under section 1886 (r) of the Act, which was added by section 3133i of the ACA, ...
What is the difference between CMS and Medicare DSH?
The first factor is the difference between CMS’s estimates of: (1) The amount that would have been paid in Medicare DSH payments for FY14 and subsequent years, in the absence of the new payment provision; and (2) the amount of empirically justified Medicare DSH payments that are made for FY14 and subsequent years, which takes into account the requirement to reduce Medicare DSH payments by 75 percent. In other words, this factor represents CMS’s estimate of 75 percent (100 percent minus 25 percent) of its estimate of Medicare DSH payments that would otherwise be made for FY14 and subsequent years in the absence of section 1886 (r) of the Act.
What is factor 1 in Medicare?
In order to determine Factor 1 in the uncompensated care payment formula, CMS proposes to develop final estimates of both the aggregate amount of Medicare DSH payments that would be made in the absence of section 1886 (r) (1) and the aggregate amount of empirically justified Medicare DSH payments to hospitals under section 1886 (r) (1) prior to each fiscal year to which the new provision applies. Specifically, in order to determine the two elements of Factor 1 (Medicare DSH payments prior to the application of the 75 percent reduction, and empirically justified Medicare DSH payments after application of the 75 percent reduction), CMS is proposing to use the most recently available projections of Medicare DSH payments for FY14 and each subsequent year, as calculated by CMS’s Office of the Actuary. Under a prospective payment system, CMS would not know the precise aggregate Medicare DSH payment amount that would be paid for a federal fiscal year until cost report settlement for all IPPS hospitals is completed, which occurs several years after the end of the federal fiscal year. Therefore, the statute gives CMS authority to estimate this amount by specifying that, for each fiscal year to which the provision applies, such amount is to be ‘‘estimated by the Secretary.’’ CMS calculated Factor 1 to be $9.2535 billion (25 percent of the total amount estimated), which is the difference between the estimate for empirically justified Medicare DSH payments for FY14 ($3.084 billion) and Medicare DSH payments for FY14, without regard to the application of section 1886 (r) (1) of the Act ($12.338 billion).
Why do hospitals need to reconcile their DSH payments?
Because CMS uses historical data to estimate each hospital’s eligibility for empirically justified DSH payments in FY14 and subsequent years, a reconciliation process will be necessary to account for cases in which a hospital’s eligibility for such payments changes after it has published its estimates during the rulemaking process. For example, a hospital that had not been estimated to be eligible for these payments may become eligible during the course of a given payment period. In such cases, CMS’s estimates would have indicated that the hospital was ineligible for empirically justified DSH payments, and therefore, ineligible for uncompensated care payments. That hospital would not receive interim payments. However, if the data available at cost report settlement were to indicate that the hospital is eligible for an empirically justified DSH payment, the hospital would become eligible for an uncompensated care payment based on that hospital’s Factor 3 value.
What is DSH payment adjustment?
This document summarizes the major changes to the disproportionate share (DSH) payment adjustment that hospitals serving a significantly disproportionate number of low-income patients can qualify for, as outlined in the FY14 IPPS proposed rule.
What is factor 2 for 2014?
Section 1886 (r) (2) (B) (i) of the Act states that Factor 2 for FY14 is equal to one minus the percent change in the percent of individuals under the age of 65 who are uninsured, as determined by comparing the percent of such individuals without insurance in the baseline and in the most recent period for which CMS has data (minus 0.1 percent for FY14). This is determined by comparing the percent of such individuals who are uninsured in 2013, the last year before coverage expansion under the ACA, and who are uninsured in the most recent period for which data is available, minus the 0.1 percent for fiscal year 2014 (minus 0.2 percentage points for each of FY15, FY16, and FY17).
What is the second factor for uninsured?
The second factor is, for FY14 through FY17, one minus the percent change in the percent of individuals under the age of 65 who are uninsured, determined by comparing the percent of those individuals who are uninsured in 2013, the last year before coverage expansion under the ACA, minus 0.1 percent for FY14, and minus 0.2 percent for FY15 through FY17. For FY14 through FY17, the baseline for the estimate of the change in uninsurance is fixed by the most recent estimate of the Congressional Budget Office before the final vote on the Health Care and Education Reconciliation Act of 2010. For FY18 and subsequent years, the second factor is one minus the percent change in the percent of individuals who are uninsured, as determined by comparing the percent of individuals "who are uninsured in 2013 minus 0.2 percent for FY18 and FY19."
What is Medicare Disproportionate Share Hospital?
Medicare Disproportionate Share Hospital (DSH) payments are a critical and significant piece of total Medicare payments for qualifying hospitals. These payments are intended to offset costs incurred by hospitals treating a large or disproportionate number of indigent patients. Although the empirically justified DSH payment has been reduced substantially through the regulations implemented by the Affordable Care Act, it remains a very important component used to qualify hospitals for the uncompensated care payment as well as 340B. Furthermore, this continues to be a significant payment adjustment for qualifying hospitals, and utmost attention is needed to ensure hospitals are compliant and their reimbursement is maximized.
How do hospitals qualify for DSH?
The primary method to qualify is based on Disproportionate Patient Percentage (DPP). The alternate special exception method is for urban hospitals with 100 or more beds “that can demonstrate that more than 30% of their total net inpatient care revenues come from state and local governments for indigent care (other than Medicare or Medicaid).”
What is factor 1 in Medicaid?
Factor 1 is the total unadjusted uncompensated care pool, which is 75% of what DSH payments would have been under the old methodology. This doesn’t get updated beyond the initial calculations, so it’s important to make sure you are capturing all eligible Medicaid days upfront.
When did Medicare DSH adjustment change?
The ACA changed the method for computing Medicare DSH adjustment effective FFY 2014. This new DSH payment can be broken into two parts (listed below), but it’s important to keep in mind that hospitals must be eligible for the empirically justified DSH payment first in order to qualify for the uncompensated care payment.
What factor reduces the total pool calculated in Factor 1 based on the changes in the uninsured rate
Factor 2 reduces the total pool calculated in Factor 1 based on the changes in the uninsured rate.
Is DSH a 340B?
Although the empirically justified DSH payment has been reduced substantially through the regulations implemented by the Affordable Care Act, it remains a very important component used to qualify hospitals for the uncompensated care payment as well as 340B.