Disproportionate Share

Background

The disproportionate share hospital (DSH) adjustment is based on a ‘disproportionate patient percentage’ for each eligible hospital, determined by a complicated statutory formula. This percentage affords additional Medicare reimbursement for hospitals serving a disproportionate share of low-income patients without private health insurance.

HRS Approach

The DSH team is exclusively designed to assist hospital clients in proper documentation, count and verification of Medicaid days for their appropriate DSH reimbursement. The HRS approach produces an initial cost report filing, verifying additional days after the filing through a reopen or an amendment, and concludes with audit support. The review process ensures that DSH package submissions to the MAC conform with Medicare rules and regulations. DSH team members have significant experience rendering credible products for MAC review.

The HRS team of top internal and external legal counsel, monitors the issuance of all Medicare rules & regulations providing comment during the notice and rulemaking periods. With this intimate knowledge of Medicare regulations, HRS is prepared to address and appeal Cost Report categories not consistent with statutory formulas. Further, HRS provides analysis and strategic services for accurate S-10 reporting, designed to have a dramatic impact on each hospital’s ultimate DSH factor 3 reimbursements.

Regulatory Update

In August 2017 CMS-1677-F provided the following:

    • Factor 2 change with uninsured population estimates from Congressional Budget Office to CMS’ Office of the Actuary
    • Incorporated FY14 Worksheet S-10
    • Defined uncompensated care consisting of charity care and bad debt
    • Implemented trim methodology addressing aberrant cost-to- charge ratios as well as potentially aberrant uncompensated care costs that exceed a 50% threshold to total operating costs
    • Introduced a scaling factor to insure UC-DSH is consistent with estimated programmed amount

Notably, data may still be suspect with no audit process in place.

CMS-1677-CN, September 2017 update provided granular revisions for several line items.

Extension Information

CMS has granted an extension to the S-10 filing date from October 31, 2017 until January 2, 2018 for all Inpatient Prospective Payment System (IPPS) hospitals. Worksheet S-10 data for FY 2014 and FY 2015 cost reports can be updated. If an IPPS hospital FY 2014 or FY 2015 cost report has been settled, requests to revise Worksheet S-10 date via reopening must also be received by January 2, 2018.

The Announced Numbers

Factor 1 – Total available DSH payments increase

  • FY2016 = $14.4B
  • FY2017 = $15.2B
  • FY2018 = $15.5B

Factor 2 – Percentage Change in Uninsured Population

  • CMS data assumptions change from Congressional Budget
  • Office estimated to Office of the Actuary
  • FY2016 = $6.41B
  • FY2017 = $5.99B
  • FY2018 = $6.77B

Factor 3 – Allocation Basis

  • FY2012 and FY2013 Medicaid Days
  • FY2013 and FY2014 SSI Days
  • FY2014 Worksheet S-10