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  • Washington Highlights

    AAMC Comments on Proposed Change to Days Counted for DSH Calculations


    Katherine Gaynor, Hospital Policy and Regulatory Analyst
    For Media Inquiries

    The AAMC submitted comments on April 11 to the Centers for Medicare & Medicaid Services (CMS) in response to the proposed rule entitled “Medicare Disproportionate Share Hospital (DSH) Payments: Counting Certain Days Associated With Section 1115 Demonstrations in the Medicaid Fraction,” aimed at revising the calculation of the Medicaid fraction of a hospital’s disproportionate patient percentage. 

    This proposed rule is a follow-up to the agency’s unfinalized Medicaid fraction proposals included in previous years’ Inpatient Prospective Payment System (IPPS) proposed rules. The CMS is proposing to modify the definition of “regard as” in the context of eligibility for medical assistance under a state plan approved for the purpose of Medicare DSH calculations. Under the proposal, only patients who receive health insurance or buy health insurance with 100% premium assistance provided to them under a Section 1115 demonstration, where states receive matching funds, would be included in the Medicaid fraction of the DSH calculation. The proposal also called for excluding patients whose inpatient hospital costs are paid for with funds from an uncompensated or undercompensated care pool authorized by a Section 1115 demonstration from the Medicaid fraction numerator. 

    The AAMC’s letter asked CMS not to finalize the proposal, consistent with comments the association submitted in response to proposals in previous years’ IPPS proposed rules. The AAMC continued to emphasize that the proposal does not accurately capture the Medicaid-eligible patient population, as it would not include individuals who qualify under an 1115 waiver with a limited set of benefits who are still considered Medicaid beneficiaries. The association reiterated that this position has been supported by a number of court cases that interpreted the rule so that these individuals are to be included in the Medicaid DSH calculation. The letter also outlined the negative implications of this proposal including a decrease in hospitals’ DSH adjustment percentage, which could affect what services hospitals are able to provide and eligibility in the 340B Drug Pricing Program.