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AAMC Submits Comments to CMS on Medicaid DSH Definition of “Uninsured”

February 17, 2012—The AAMC submitted comments  to the Centers for Medicare and Medicaid Services (CMS) in a Feb. 15 comment letter on proposed modifications to the definition of “uninsured” for purposes of setting the hospital-specific limit on Medicaid disproportionate share hospital (DSH) payments. The AAMC commends CMS for revising this definition and encourages the agency to address several remaining issues.  How CMS defines the term “uninsured” is of particular concern to AAMC members, who represent just 6 percent of all hospitals, yet account for over one-quarter of all Medicaid discharges and 40 percent of all hospital charity care.

The proposed rule would revise CMS’ current interpretation of the term “uninsured” to include not only patients who have no insurance, but patients who lack insurance for the specific service provided.  The revised definition also would include patients who have reached annual or lifetime insurance limits or have otherwise exhausted their covered benefits.  Services rendered to these patients then could be included in the calculation of a hospital’s Medicaid DSH limitation.

The AAMC supports CMS’ decision to return to a service-specific approach to the definition of uninsured, and believes the proposed definition appropriately captures an important subset of uninsured patients and better reflects a hospital’s true uncompensated care costs.  However, the AAMC urges CMS to make several changes to the proposed rule to make the proposed definition retroactive, to include the costs of unpaid coinsurance and deductibles in the calculation of the DSH limit, and to clarify that when a patient’s coverage is exhausted during a hospital stay, the costs associated with service provided after the exhaustion date may be included in the DSH limit.

CMS solicited comments on the proposal in a Federal Register notice dated Jan. 18. 


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806