The Centers for Medicare & Medicaid Services March 30 issued a final rule addressing how third-party payments are treated when calculating the hospital-specific limitation on Medicaid disproportionate share hospital payments.

The AHA expressed deep disappointment in the rule. “Of particular concern is the decision by CMS to ignore requests to apply this change in policy in a prospective manner to give states and hospitals sufficient time to make needed adjustments to ensure compliance,” AHA Executive Vice President Tom Nickels said in a March 31 press statement. "We view this action as a good example of the need for significant regulatory reform and urge CMS to reconsider the rule.”

According to CMS, the final rule clarifies current policy that uncompensated care costs for Medicaid-eligible individuals include only those that remain after accounting for payments hospitals receive by or on behalf of Medicaid-eligible individuals, including Medicare and other third-party payments that compensate the hospitals for care furnished to such individuals. The agency issued its original policy in sub-regulatory guidance.

In a comment letter last year on the proposed rule, the AHA called for CMS to withdraw the proposed rule, which it said was “substantive and establishes new policy, specifically with the intent of avoiding potentially unfavorable federal district court rulings agency faced legal challenges.” 

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