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revenues, because the federal
Medicaid match is based on expenditures, not revenues. The Medicaid DSH payment provided the mechanism to spend these revenues. The DSH payment was singled out because it was not subject to the Medicare upper payment limit. Thus, states could make virtually unlimited DSH payments and, in the process, earn federal matching dollars. As such the hospitals that were slated to receive DSH funds were asked to contribute the required state share; the state would then use this money to draw down a large federal matching payment. The hospitals would get their contributions back and perhaps a bit more, but the states often kept the lion's share of the federal payment. With the DSH system effectively serving as a money pump that pulled federal funds into state coffers, the program experienced explosive growth. Between 1990 and 1996, federal DSH payments ballooned from $ 1.4 billion to more than $ 15 billion annually.
294:). Key provisions included (1) essentially banning provider donations; (2) limiting provider taxes so that provider tax revenues could not exceed 25 percent of the state's share of Medicaid expenditures; (3) imposing provider tax criteria so that taxes were "broad based" and providers were not "held harmless"; and (4) capping state DSH payments at roughly 1992 levels. This law also capped the amount a state could spend on DSH payments, but it did little to slow recycling.
318:(IMD). By 2002 no more than 33 percent of a state's federal DSH allotment can be paid to institutions for mental disease. (3) DSH payments made on behalf of Medicaid clients in managed care must be paid directly to hospitals rather than plans. Through these efforts, Congress and the Clinton administration cut federal DSH payments by 5% and limited their further growth; as such, in 1998 $ 15 billion in Medicaid DSH payments were issued to hospitals.
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included several DSH provisions, including the following: (1) New state specific DSH allotments are established for each year during 1998–2002, eliminating the allotments established in the 1991 DSH law. Federal DSH expenditures are allowed to increase after 2002 by the percentage change in the
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by making the practice of recycling more costly for hospitals with provisions such as the following: (1) Only those hospitals that had a
Medicaid use rate of at least 1 percent could receive DSH payments. (2) Total DSH payments to a single hospital could not exceed the unreimbursed costs of providing
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The value of the hospital's DSH "index" determines the hospital's eligibility for a DSH payment and the size of the payment. The index, whose definition has not changed since the original legislation, is the sum of two ratios: the proportion of all
Medicare days that are attributable to beneficiaries
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Determine the best way to implement the cuts in a way that will target states that direct the lowest percentage of DSH allotments to hospitals with high volumes of uninsured and
Medicaid inpatients. The 16 states considered "low DSH states" will be reduced by 25%, and all other states will be reduced
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Develop a methodology to distribute DSH reductions in a manner that (1) imposes the largest reduction in DSH allotments for states with the lowest percentage of uninsured or those that do not target DSH payments; (2) imposes smaller reductions for low-DSH states; and (3) accounts for DSH allotments
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The alternate special exception method is for urban hospitals with more than 100 hospital beds that can demonstrate that more than 30 percent of their total net inpatient care revenues, other than
Medicare or Medicaid, come from state and local government sources for indigent care, such as for
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In 1989, some enterprising state budget experts discovered that they could claim federal DSH funds without expending general state funds and use the DSH payment as a mechanism for mitigating hospitals’ financial distress. To earn the match, however, the state had to spend the tax or donation
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eligibility and coverage vary widely across states, Medicare DSH payments are distributed unevenly across geographic areas: the Middle
Atlantic, South Atlantic, and Pacific regions account for 60 percent of all DSH payments but only 46 percent of Medicare discharges.
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The formulas to establish a hospital's
Medicare DSH payment adjustment are based on the following: hospital's location; number of beds; and status as a Rural Referral Centers, Medicare-Dependent Hospitals, or sole community provider.
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The primary method is based on a complex statutory formula that results in the
Medicare DSH patient percentage, which is equal to the sum of the percentage of Medicare inpatient days attributable to patients entitled to both
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DSH payments are highly concentrated. Ninety-three percent of total DSH payments go to large hospitals in urban areas, and teaching hospitals receive about 65 percent of all DSH payments. Additionally, because
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In 1991, Congress sought to restrict states' ability to tap provider funds in order to claim federal matching funds by enacting the
Voluntary Contribution and Provider-Specific Tax Amendments of 1991 (
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Aggregate
Medicaid DSH allotments by $ 0.5 billion in 2014, $ 0.6 billion in 2015, $ 0.6 billion in 2016, $ 1.8 billion in 2017, $ 5 billion in 2018, $ 5.6 billion in 2019, and $ 4 billion in 2020; and
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excluding beds otherwise countable used for outpatient observation, skilled nursing swing-bed, or ancillary labor/delivery services divided by the number of days in the cost reporting period.
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314:, subject to a ceiling of 12 percent of each state's total annual Medicaid expenditures. (2) Limits have been placed on how much of a state's federal DSH allotment can be paid to
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In order to maximize their reimbursement, many hospitals and/or their consultants will use Medicaid eligibility vendors to assist in the identification of Medicaid eligible days.
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Medicare DSH payments initially by 75 percent and subsequently increase payments based on the percent of the population uninsured and the amount of uncompensated care provided.
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and Supplemental Security Income and the percentage of total inpatient days attributable to patients eligible for Medicaid but not eligible for Medicare Part A.
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Coughlin, T.A.; Liska, D. (1998). "Changing state and federal payment policies for Medicaid disproportionate-share hospitals".
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With DSH expenditures soaring in the 1990s and by 1996 accounting for one out of every eleven dollars spent on Medicaid, the
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As amended throughout May 1, 2010. Including Patient Protection and Affordable Care Act of 2010; May 2010 Report.
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325:(CMS) began scrutinizing the practice on a state-by-state basis. By 2006, recycling had largely stopped.
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The Medicaid DSH Program and Providing Health Care Services to the Uninsured: A Look at Five Programs
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Redlener, I.; Grant, R (2009). "America's safety net and health care reform—What lies ahead?".
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The United States government provides funding to hospitals that treat indigent patients through the
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A hospital can qualify for the Medicare DSH adjustment by using one of the following methods:
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Number of inpatient care bed days attributable to units or wards generally payable under the
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Coughlin, Teresa A.; Guterman, Stuart; Bruen, Brian K.; Lutzky, Amy Westpfahl (March 2001).
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add wikilinks; coverage of situation prior to PPACA; comparison with non-USA approaches.
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85:) programs, under which facilities are able to receive at least partial compensation.
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613:"Overview of Medicaid provisions in the Balanced Budget Act of 1997, P.L. 105-33"
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Funding for the Medicaid DSH program by $ 17.1 billion between 2014 and 2020;
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491:"Interpretation of Medicaid days in Medicare DSH adjustment calculation"
441:"The effect of health care reform on hospitals: A summary overview"
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Spivey, M.; Kellermann, A.L. (2009). "Rescuing the safety net".
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651:. United States Office of the Legislative Counsel. May 2010
646:"Compilation of Patient Protection and Affordable Care Act"
630:(Report). The Health Policy Center of the Urban Institute.
615:. Washington: Center for Budget and Policy Priorities.
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United States Department of Health and Human Services
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Health Care Financing Administration Ruling no. 97-2
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used for 1115 waivers effective October 1, 2011; and
384:"The evolution of support for safety-net hospitals"
302:inpatient care to Medicaid and uninsured patients.
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88:Although 3,109 hospitals receive this adjustment,
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183:. Unsourced material may be challenged and
323:Centers for Medicare and Medicaid Services
108:Patient Protection and Affordable Care Act
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299:Omnibus Budget Reconciliation Act of 1993
203:Learn how and when to remove this message
65:Learn how and when to remove this message
244:Number of Beds in Hospital Determination
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129:Secretary of Health and Human Services
675:Medicare and Medicaid (United States)
477:The Henry J. Kaiser Family Foundation
382:Fishman, L.E.; Bentley, J.D. (1997).
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473:"Summary of the Affordable Care Act"
249:Inpatient Prospective Payment System
181:adding citations to reliable sources
533:The New England Journal of Medicine
345:The New England Journal of Medicine
288:Tooltip Public Law (United States)
233:Alternate Special Exemption Method
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439:Main, D.C.; Starry, M.M. (2010).
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445:Pillsbury Winthrop Shaw Pittman
316:institutions for mental disease
256:Mechanics of the DSH adjustment
79:Disproportionate Share Hospital
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267:Supplemental Security Income
428:. Jackson Kelly PLLC. 2010.
40:. The specific problem is:
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36:to meet Knowledge (XXG)'s
239:medically indigent adults
590:10.1377/hlthaff.17.3.118
307:1997 Balanced Budget Act
403:10.1377/hlthaff.16.4.30
110:(PPCA) aims to reduce:
611:Schneider, A. (1997).
297:Congress responded in
546:10.1056/nejmp0900728
426:"Health Law Monitor"
358:10.1056/nejmp0910597
312:Consumer Price Index
177:improve this section
47:improve this article
273:History and reforms
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55:August 2012
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655:October 6,
455:2016-09-08
329:References
145:Qualifying
164:does not
669:Category
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366:19955523
95:Medicaid
90:Medicare
31:require
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284:Pub. L.
185:removed
170:sources
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33:cleanup
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106:The
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