CMS Giveth and Taketh Away: New CMS Ruling on Medicare DSH Payments


On April 28, 2010, CMS issued a sweeping ruling that will affect many hundreds of hospitals, and thousands of cost years, with

disproportionate share hospital (DSH) reimbursement challenges. The Ruling, CMS-198-R, addresses three specific DSH issues: (1) the data matching process employed by CMS in calculating the days in the Supplemental Security Income (SSI) fraction; (2) prior to October 1, 2004, the exclusion from the Medicaid fraction of Medicare secondary payor (MSP) days and days for which a patient’s Part A inpatient hospital benefit days were exhausted (exhausted days); and (3) prior to October 1, 2009, the exclusion of labor/delivery room inpatient days from the DSH computation. For cases presenting these issues, the Ruling requires the administrative body – whether it be the Provider Reimbursement Review Board, the CMS Administrator, or the CMS reviewing official – to remand the appeal to the appropriate Medicare contractor for recomputation. Thomas W. Coons of Ober|Kaler discusses.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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