The disproportionate-share hospital (DSH) supplemental payment
program is designed to provide additional funding to hospitals
that serve a disproportionate number of Medi-Cal and
low-income/charity patients. This federally mandated program
compensates DSH providers for their unrecovered costs of caring
for Medicaid and other indigent patients. In California, the DSH
program is administered by the Department of Health Care Services
(DHCS), which annually determines eligibility. DSH payments to
hospitals are determined by many variables.
In a unanimous decision, the Supreme Court has affirmed the U.S.
Department of Health and Human Services’ authority to refuse
extensions for Medicare disproportionate-share reimbursement
appeals beyond the usual 180-day deadline or three years “for
good cause.” The decision was in response to a lawsuit
filed by 18 hospitals that challenged their Medicare
disproportionate-share adjustments for 1987 through 1994. The
challenge arose after the Provider Reimbursement Review Board
found, in 2006, that errors in the Centers for Medicare &
Medicaid Services’ methodology resulted in a systematic
under-calculation of the disproportionate-share adjustment and
corresponding underpayments to providers. The court’s decision is
available at www.supremecourt.gov/opinions/12pdf/11-1231_32q3.pdf.