Disproportionate Share Hospital Program

Parent Issue

Medicaid DSH Cuts Delayed Until Nov. 21 Through Federal Budget Continuing Resolution

Yesterday, the U.S. Senate passed a continuing resolution to provide funding for the federal government for the first few weeks of federal fiscal year 2020, which begins Oct. 1. Of particular note for California’s safety-net hospitals, the measure includes a provision to delay the Medicaid disproportionate share hospital (DSH) cuts slated to take effect on Oct. 1. The delay is in place until Nov. 21. 

Supreme Court Rejects Medicare Disproportionate Share Hospital Cuts

The Supreme Court ruled this week that the Department of Health and Human Services (HHS) violated the Medicare Act when, in 2014, it changed the calculation for payments to disproportionate share hospitals (DSH). The 7-1 court ruling could affect billions of dollars in Medicare payments to safety net hospitals.

More Than 300 Members of Congress Sign Bipartisan Letter Urging Delay of Medicaid DSH Cuts

A total of 302 members of Congress signed on to a bipartisan House letter urging Congress to delay cuts to Medicaid disproportionate share hospitals for at least two years. An overwhelming majority — 48 of 53 — of members of the California delegation cosigned the letter. CHA strongly supports this bipartisan effort and thanks members for their engagement on this critical issue.

Medicare, Medicaid Commissions Issue 2019 Reports to Congress

Both the Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC) have issued their March 2019 reports to Congress, based on recommendations approved at their January meetings. The MedPAC report evaluates Medicare payment issues, while the MACPAC report recommends — among other items — that if planned Medicaid disproportionate share hospital (DSH) cuts proceed, they should be phased-in to give states and hospitals more time to respond.

FFY 2019 Uncompensated Care Payments to Come From 2014, 2015 Worksheet S-10 Data

In the federal fiscal year (FFY) 2019 inpatient prospective payment system final rule, the Centers for Medicare & Medicaid Services (CMS) finalized its second year of a three-year transition to use Worksheet S-10 data for distributing Medicare disproportionate share hospital (DSH) uncompensated care payments. CMS will use two years (FFYs 2014 and 2015) of Worksheet S-10 cost report data and one year of proxy data to distribute the uncompensated care payments for FFY 2019.

In response to comments from CHA, CMS noted in the final rule that it planned audits of the data in fall 2018. In late August, CMS began audits of selected hospitals’ FFY 2015 cost reports. A number of hospitals in California have received this data request, and must respond by Sept. 28.  

Because CMS has given the Medicare administrative contractors (MACs) only until the end of January to complete the audits, providers have a short timeline to complete this work with their MACs. Though CHA acknowledges that this presents a challenge from both technical and resource perspectives, CHA highly encourages hospitals that have received a request to respond as quickly as possible. Early communication with Noridian (or its subcontractor, Figliozzi & Company) is critical under this short timeline. A copy of the letter Noridian sent to select providers requesting documentation is attached; these letters are consistent across all MACs.

Budget and SGR Reforms Advance

Last night the House of Representatives passed the Bipartisan Budget Act of 2013. The Senate is expected to do so today, and the President has indicated he will sign the measure. The vote in the House was 332-62; nine Californians voted against passage. The legislation contains both good news and bad news for California’s hospitals.
Also this week, the House Ways and Means and Senate Finance Committees reported bipartisan legislation to repeal the sustainable growth rate (SGR) for physician Medicare payments. They will continue to work toward a permanent solution during the first quarter of 2014. The financing mechanisms for offsetting the cost of repeal have not been released. Payments to hospitals continue to be vulnerable as the committees look for as much at $150 billion over the next 10 years to pay for the SGR repeal. 
CHA has provided the attached summary of the Bipartisan Budget Act of 2013 with additional information about the hospital-related provisions.