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):
-
75% fixed pool of what DSH would have been as estimated by CMS for all hospitals combined under the pre-ACA formula
-
Estimated % change in the national uninsured rate for individuals under 65
-
Provider’s uncompensated care % relative to all hospitals eligible for DSH
First things first: You can ONLY receive UC payments IF you meet the Empirically Justified DSH Payment criteria AND have uncompensated care. In addition, Maryland, Rural Community Demos and Sole Community Hospitals receiving hospital specific payments are excluded since they are not eligible to receive the Empirically Justified DSH payment.
We will take an in depth look at each of the factors in future posts but in the meantime, here is a bit more information to hold you over.
Factor 1 (The Pool):
-
Estimated by CMS’ Office of the Actuary
-
Not revised even after actual DSH payments are known
Factor 2 (The Skim):
-
Insured rates are estimated by Congressional Budget Office (CBO)
-
2010 uninsured rate is used as the 2013 baseline
-
Additional reduction taken for FY 2014-2019
Factor 3 (Piece of the Pie):
-
Hospital driven but ultimately determined by CMS
-
Based on hospital’s Medicaid and Medicare SSI days
-
Plan to use S-10 to distribute payments in the future
Is there a specific factor that has you scratching your head??? Let us know using the comment box below! Otherwise, a look at Factor 1 is up next. Until then...