Southwest Consulting Associates Blog

So your traditional DSH payment has been reduced to 25% but is that all the reimbursement you can expect going forward? Not necessarily…

Let’s recap!  As a result of ACA, the amount of total reimbursement a provider may receive for discharges beginning October 1, 2013, is now based upon two components:

• Empirically Justified DSH Payment

• Uncompensated Care (UC) Payment

The Empirically Justified DSH Payment is 25% of what Medicare DSH would have been under the pre-ACA formula.  More on that HERE!

The UC payment is a product of 3 factors ((Factor 1 x Factor 2) x Factor 3):

1. 75% fixed pool of what DSH would have been as estimated by CMS for all hospitals combined under the pre-ACA formula

One of the most significant changes to Medicare DSH reimbursement was enacted by the Affordable Care Act (ACA) and implemented in the 2014 IPPS final rule.  The change included the establishment of an Empirically Justified DSH component, or 25% of what DSH would have been under the pre-ACA formula.  The ACA also established an uncompensated care pool totaling 75% of what DSH would have been as estimated by CMS for all hospitals combined under the pre-ACA formula adjusted for the change in the number of uninsured individuals nationally.

Beginning with federal fiscal year 2014, the Affordable Care Act changed the methodology for reimbursing hospitals that treat a large percentage of indigent patients.  Are you up to speed on the changes?  In order to understand the changes implemented as a result of the Affordable Care Act (ACA), lets review the Medicare DSH reimbursement calculation as it was prior to the inception of ACA.

Pre-ACA Medicare DSH Calculation

Southwest Consulting Associates (SCA) is proud to announce the celebration of their 1-year anniversary of new ownership under President, Michael G. Newell.  Mr. Newell acquired the company in September of 2013 from founder David P. Pfeil, who retired after 25 years at the helm of SCA.

Southwest Consulting Associates (SCA) is happy to announce the official launch of its blog today - a new resource for connecting with its client base.  The primary goal of the blog is to provide relevant and educational content to our readers pertaining to the provider reimbursement industry.  SCA hopes the blog will enable us to better interact with our client base while providing valuable information.