Under the Affordable Care Act, Medicare disproportionate share hospitals (DSH) are reimbursed under an uncompensated care (UC) model. The amount of uncompensated care reimbursement received by a DSH is determined by 3 factors.
Factor 2 reduces the Uncompensated Care Pool (Factor 1) in conjunction with the changes in the uninsured rate.
Under the Affordable Care Act, Medicare disproportionate share hospitals (DSH) will be paid under an uncompensated care (UC) model. The amount of uncompensated care reimbursement received by a qualifying DSH is determined by 3 factors.
Facts:
Factor 1 establishes the uncompensated care pool. CMS will estimate the total amount of Medicare DSH reimbursement for all qualifying hospitals (under the pre-ACA/traditional DSH formula) in a given federal fiscal year. That estimate is reduced by 25%, which represents the empirically justified Medicare DSH reimbursement that is payable directly to a qualifying DSH ultimately through the settlement of the cost report. The net result is Factor 1.
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