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The Dish on DSH

Tens of millions of Americans are uninsured or depend on Medicaid benefits. When they require medical attention, much of the cost burden can shift onto hospitals and other healthcare organizations. Under federal law, however, hospitals serving large numbers of Medicaid and uninsured patients can recoup portions of that cost through Disproportionate Share Hospital (DSH) payments.

The Medicare DSH provision of the Social Security Act establishes annual DSH allotments for each state. There is also a hospital-specific limit. The law uses a statutory formula to determine if hospitals qualify for DSH payment. This formula yields the disproportionate patient percentage (DPP).

The formula adds the percentage of Medicare inpatient days for patients eligible for Part A and SSI to the percentage of total inpatient days for patients eligible for Medicaid but not Part A.

Another way to look at it:

from the CMS

If the hospital’s DPP meets a certain threshold, it qualifies for the DSH adjustment. And to determine that, there is yet another statutory formula.

The above is the standard method for determining eligibility for the DSH adjustment. There is another: large urban hospitals with 100 or more beds that can prove that more than 30% of their total net inpatient care revenues is derived from state and local governments for indigent care (excluding Medicare or Medicaid), they qualify for these monies.

Hospitals file their data on indigent and uncompensated care on Form S-10 from the cost report. This is critical because CMS will incorporate uncompensated cost data from this form when calculating DSH payments. For FY2018, they will examine data from FY2014, as well as insured low income days from the preceding two periods.

If you have not submitted an S-10 with your FY2014 cost report or if it has errors, it is important to address the situation immediately. It will impact DSH payments, now and in the future. R-C Healthcare can review and analyze S-10 data and supporting documentation. In addition to data collection analysis and preparation, we can offer support in defending your S-10 and in intervening with CMS and MAC.

Contact our experienced team for more information and assistance.

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