CMS proposes to clarify hospital-specific limit on Medicaid DSH payments

The Centers for Medicare & Medicaid Services today proposed to clarify the hospital-specific limitation on Medicaid Disproportionate Share Hospital payments and its application in annual DSH audits. The agency states that it is seeking to clarify that uncompensated care costs include only those costs for Medicaid-eligible individuals that remain after accounting for payments received by hospitals 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. Accordingly, the hospital-specific limit calculation would reflect only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source (other than state or local governmental payments for indigent patients). CMS will accept comments on the proposed rule for 30 days after its publication in the Aug. 15 Federal Register.