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CHA Issues Summary of Proposed Rule on Medicare DSH Adjustment Determinations

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CHA has issued a members-only summary, prepared by Health Policy Alternatives, Inc., of a proposed rule that would change the Centers for Medicare & Medicaid Services’ (CMS) policies on how the Medicare disproportionate share (DSH) adjustment is determined. 

CMS proposes that for a section 1115 demonstration inpatient day to be included in the numerator of the Medicaid fraction, the patient must:  

  • Receive health insurance authorized by the section 1115 demonstration that provides inpatient hospital benefits; or  
  • Buy health insurance with premium assistance provided to them under a section 1115 demonstration, where state expenditures to provide the health insurance or premium assistance receive federal matching funds 

Patients whose inpatient hospital costs are paid for with funds from an uncompensated care pool authorized by a section 1115 demonstration would not be considered patients “regarded as” eligible for Medicaid. The days of such patients may not be included in the DPP Medicaid fraction numerator for purposes of calculating hospitals’ Medicare DSH payments.  

Comments are due to CMS by 2 p.m. (PT) on May 1. CHA is currently reviewing the proposed regulation.