The Centers for Medicare & Medicaid Services (CMS) on Feb. 22 released the proposed rule addressing third-party payments in the calculation of Medicaid hospital-specific disproportionate share hospital (DSH) limits. The proposed rule is in response to the legislative changes enacted in the Consolidated Appropriations Act, 2021 (CAA, 2021).
Section 203 of the CAA, 2021, modified the calculation of the Medicaid portion of the hospital-specific DSH limit to include only costs and payments for services furnished to beneficiaries for whom Medicaid is the primary payer for those services. The limit excludes cost and payments for services provided to Medicaid beneficiaries with other sources of insurance coverage, including Medicare and commercial insurance.
The CAA, 2021, provides for exception to this methodology for certain hospitals that are in the 97th percentile or above of all hospitals with respect to the number of Medicare supplemental security income (SSI) days or percentage of Medicare SSI days to total inpatient days. The CMS acknowledged in the proposed rule that there are certain data limitations that have delayed the agency’s ability to clarify which hospitals qualify for the exception.
The CMS is proposing to define “97th percentile hospital” to mean a hospital that is in a least the 97th percentile of all hospitals nationwide with respect to the hospital’s number of Medicare SSI days or percentage of inpatient days that are Medicare SSI days, for the hospital's most recent cost reporting period.
Hospitals that meet the definition to qualify for the exception will calculate their hospital-specific DSH limit using the higher value of either the hospital-specific DSH limit amount (as amended by the CAA, 2021) or the amount determined for the hospital on Jan. 1, 2020.