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CMS Releases Medicaid DSH Payment Final Rule

arch 31, 3017—The Centers for Medicare and Medicaid Services (CMS) March 30 issued the Treatment of Third Party Payers in Calculating Uncompensated Care Cost in Medicaid Disproportionate Share Hospital (DSH) final rule.  It states that all costs and payments associated with dual eligibles and individuals with a source of third party coverage must be included in the calculation of the hospital-specific DSH limit. The AAMC submitted comments on the proposed rule in September [see Washington Highlights, Sept. 16]. The rule will be effective June 3, 2017.

According to CMS, the final rule clarifies existing policy. It states that uncompensated care costs include “all costs and payments associated with Medicaid eligible individuals” in the hospital-specific calculation, regardless of whether Medicaid made a payment. The AAMC submitted a comment letter when the Agency proposed the rule.  Among its comments AAMC recommended that if CMS were to adopt the rule as proposed, it should include a transition period. The final rule does not include a transition period.  The AAMC also urged CMS to exclude patients for whom no Medicaid claim is filed from the calculation of the hospital-specific DSH limits.  This ideas was rejected by CMS.


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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