CMS Issues Proposed Rule Modifying Uninsured Definition for Determining DSH Payments


In the January 18, 2012 Federal Register (77 Fed. Reg. 2500), the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would implement a service-specific basis to define the uninsured for purposes of determining the hospital-specific limitation on Disproportionate Share Hospital (DSH) payments.  Section 1923(g) of the SSA limits DSH payments to hospitals to the uncompensated costs of furnishing hospital services to individuals who are Medicaid eligible or "have no health insurance (or other source of third party coverage) for the services furnished during the year".  If the proposed rule is finally adopted, it would reverse the final rule issued in December 2008 (73 Fed. Reg. 77904) that defined the uninsured for purposes of the DSH limitation as those individuals without "creditable coverage," consistent with the definitions under 45 C.F.R. pt. 144 and 45 C.F.R. pt. 146.  Under the 2008 definition, costs were excluded with respect to individuals who had exhausted their insurance benefits or who had reached lifetime insurance limits for certain services, as well as services not included in a benefit package. Under the proposed rule, uncompensated costs of providing inpatient and outpatient hospital services to individuals who do not have coverage for those specific services would be considered costs for which there is no liable third party payer and thus eligible costs for Medicaid DSH payments. Comments on the proposed rule are due Februray 17, 2012.

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Categories:Health and Human Services


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