Medicaid Program; Disproportionate Share Hospital Payments--Treatment of Third Party Payers in Calculating Uncompensated Care Costs. Final rule

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under section 1923(g)(1)(A) of the Social Security Act (Act), and the application of such limitation in the annual DSH audits required under section 1923(j) of the Act, by clarifying that the hospital-specific DSH limit is based only on uncompensated care costs. Specifically, this rule makes explicit in the text of the regulation, an existing interpretation that uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for payments made to hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals. As a result, the hospital-specific limit calculation will reflect only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source.

Medicaid program; disproportionate share hospital payments--uninsured definition. Final rule

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under the Social Security Act (the Act). Under this limitation, DSH payments to a hospital cannot exceed the uncompensated costs of furnishing hospital services by the hospital to individuals who are Medicaid-eligible or "have no health insurance (or other source of third party coverage) for the services furnished during the year.'' This rule provides that, in auditing DSH payments, the quoted test will be applied on a service-specific basis; so that the calculation of uncompensated care for purposes of the hospital-specific DSH limit will include the cost of each service furnished to an individual by that hospital for which the individual had no health insurance or other source of third party coverage.

Medicare program; FY 2014 inpatient prospective payment systems: changes to certain cost reporting procedures related to disproportionate share hospital uncompensated care payments. Interim final rule with comment period

: In the fiscal year (FY) 2014 inpatient prospective payment systems (IPPS)/long-term care hospital (LTCH) PPS final rule, we established the methodology for determining the amount of uncompensated care payments made to hospitals eligible for the disproportionate share hospital (DSH) payment adjustment in FY 2014 and a process for making interim and final payments. This interim final rule with comment period revises certain operational considerations for hospitals with Medicare cost reporting periods that span more than one Federal fiscal year and also makes changes to the data that will be used in the uncompensated care payment calculation in order to ensure that data from Indian Health Service (IHS) hospitals are included in Factor 1 and Factor 3 of that calculation.

The new Medicare DSH payment: what's baked into the pie--and how it's sliced

Medicare's new disproportionate share hospital (DSH) payment method combines a payment amounting to 25 percent of what a hospital would have traditionally received with an additional amount that is the product of three factors: An estimate of the aggregate amount of DSH payments that the Medicare program would have paid in FFY14 under the traditional payment method. An adjustment to that figure to account for an estimated percentage change in the national uninsured rate between FFY13 and FFY14. Each hospital's estimated percentage of the total uncompensated care costs incurred by all hospitals that are expected to qualify for DSH payments.

Medicaid program; state disproportionate share hospital allotment reductions. Final rule

The statute, as amended by the Affordable Care Act, requires aggregate reductions to state Medicaid Disproportionate Share Hospital (DSH) allotments annually from fiscal year (FY) 2014 through FY 2020. This final rule delineates a methodology to implement the annual reductions for FY 2014 and FY 2015. The rule also includes additional DSH reporting requirements for use in implementing the DSH health reform methodology.

CMS's proposed rule implementing the ACA-mandated Medicaid DSH reductions

State Medicaid programs make Medicaid disproportionate share hospital (DSH) payments to hospitals to help offset costs of uncompensated care for Medicaid and uninsured patients. Unlike most Medicaid spending, annual DSH allotments for each state are capped. Under the Patient Protection and Affordable Care Act of 2010 (ACA), DSH payments will decrease starting in fiscal year (FY) 2014 and continuing through FY 2020. This paper describes the proposed rule for reducing these federal allotments, which was released on May 15, 2013, by the Centers for Medicare & Medicaid Services (CMS). Comments on the proposed rule are due July 12, 2013.

The second market failure phenomenon in safety-net health systems: the case of a municipal academic medical center from 1980 to 2000

The specific aim of this analysis is to demonstrate how the trade-off between efficiency and equity policy approaches affects the ability of at-risk children to access quality health care services at the King/Drew Medical Center of Los Angeles County from 1980 to 2000. The concept of a second market phenomenon is used as a framework to illustrate how efficiency-seeking behaviors of federal, state, and local government actors affected government intervention efforts initiated to remedy health care access hardships created by market failure in low-income communities. A second market failure occurs when government failure results from the reintroduction of market protocols in an environment where the market had originally failed to facilitate the distribution of basic goods and services. The review suggest that financial austerity at the Los Angeles County Department of Health Services in the context of federal, state, and local government policies that emphasized allocative efficiencies, compromised equity values by undermining access to quality pediatric services at the King/Drew Medical Center which was a municipal academic medical center.

Medicaid program; disproportionate share hospital payments. Final rule

This final rule sets forth the data elements necessary to comply with the requirements of Section 1923(j) of the Social Security Act (Act) related to auditing and reporting of disproportionate share hospital payments under State Medicaid programs. These requirements were added by Section 1001(d) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).

When less means more. By combining under one Medicare provider number, some hospitals can reap bigger disproportionate-share supplements

Navigating the byzantine rules governing disproportionate-share supplements presents hospitals with a special challenge. But some have discovered a little-known secret: By combining two or more hospitals under a single Medicare provider number, some can increase their level of reimbursement. "We had to do something to stem the losses that were occurring in both institutions at that time," says Bob Reh, left.

Quality of care for acute myocardial infarction at urban safety-net hospitals

Safety-net hospitals are experiencing increasing financial strains, possibly affecting their quality of care. We compare quality at safety-net and non-safety-net urban hospitals for Medicare beneficiaries admitted with acute myocardial infarction (AMI). Although safety-net hospitals had modestly higher risk-standardized thirty-day all-cause mortality rates and modestly lower adherence to quality-of-care performance measures than non-safety-net hospitals, there was much heterogeneity among safety-net hospitals and substantial overlap with non-safety-net hospitals. We examine the implications of these findings for the millions of vulnerable Americans who rely on safety-net hospitals for their care.

Rob hospitals to pay poor. Hospital and system executives say Bush's plan for uninsured threatens their fiscal stability; insurers, some docs endorse it

President's Bush's plan to offer tax deductions for healthcare premiums along with shifting disproportionate-share funds to the states drew howls from hospital executives who say their institutions can't afford that approach. John Bluford, left, of Truman Medical Centers in Kansas City, Mo., says the plan could have a "potentially devastating effect" on hospitals and their patients.

Wellpoint, HealthNet and Prudential settle capitation lawsuit

Wellpoint, the nation's largest health plan based in Indianapolis, and Luisville-based Humana have joined a number of HMOs in settling a class-action lawsuit filed by physicians over inadequate capitation rates and several other issues.

Winning big in reform bill. After a year of lobbying and much debate, Congress reaches a compromise Medicare agreement that pleases providers

Providers lobbied hard to get their pet provisions included in the Medicare reform legislation, hailed by Sens. John Breaux, left, and Bill Frist. If the compromise pact is approved, hospitals and physicians would get more money, construction of specialty hospitals would slow, rural providers would get a major cash infusion and academic medical centers would be better compensated for their teaching costs.

District court affirms CMS's hold-harmless policy for DSH

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.

Achieving equity in Medicare disproportionate share payments to rural hospitals: an assessment of the financial impact of recent and proposed changes to the disproportionate share hospital payment formula

Historically, the Medicare Disproportionate Share Hospital (DSH) payment program has been less favorable to rural hospitals: eligibility thresholds were higher and the payment adjustment was smaller for rural than for urban hospitals. Although the Medicare, Medicaid, and SCHIP Benefit Improvement and Protection Act (BIPA) of 2000 established a uniform low-income threshold and increased the magnitude of the adjustment for certain small and rural hospitals as a means to promote payment equity, the DSH distribution formula continues to vary by location. This study examines how the DSH revisions mandated under BIPA are likely to affect rural hospitals' financial performance and simulates the financial impact of implementing a uniform DSH payment adjustment. Using data from the 1998 Medicare cost report and impact files, this study found that two-thirds of both rural and urban hospitals would have qualified for DSH payments following BIPA compared with only one-fifth of rural hospitals and one-half of urban hospitals prior to BIPA. Although the impact of BIPA revisions on rural hospitals' total margins were found to be modest, the financial impact of a uniform payment adjustment would be somewhat greater: rural hospitals' average total margins would have increased by 1.6 percentage points. Importantly, 20% of rural hospitals with negative total margins would have been "in the black" if rural and urban hospitals were reimbursed using the same DSH formula. These findings suggest that elimination of rural and urban disparities in DSH payment could strengthen the rural health care safety net.

DSH adjustment controversies continue

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.

Creative payment strategy helps ensure a future for teaching hospitals

The Colorado Medicaid Program in years past relied on disproportionate share hospital (DSH) payment programs to increase access to hospital care for Colorado citizens, ensure the future financial viability of key safety-net hospitals, and partially offset the state's cost of funding the Medicaid program. The options to finance Medicaid care using DSH payments, however, recently have been severely limited by legislative and regulatory changes. Between 1991 and 1997, a creative Medicaid refinancing strategy called the major teaching hospital (MTH) payment program enabled $131 million in net payments to be distributed to the two major teaching hospitals in Colorado to provide enhanced funding related to their teaching programs and to address the ever-expanding healthcare needs of their low-income patients. This new Medicaid payment mechanism brought the state $69.5 million in Federal funding that otherwise would not have been received.

Medicaid program; disproportionate share hospital payments-institutions for mental disease--HCFA. Notice

This notice announces the Federal share disproportionate share hospital (DSH) allotments for Federal fiscal years (FFYs) 1998 through 2002. This notice also describes the methodology for calculating the Federal share DSH allotments for FFY 2003 and thereafter, and announces the FFY 1998 and FFY 1999 limitations on aggregate DSH payments States may make to institutions for mental disease (IMD) and other mental health facilities. In addition, it clarifies the DSH reporting requirements required by the Balanced Budget Act of 1997 (BBA '97).