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.
CHA members visited Washington, D.C., today to meet with their congressional representatives and staff from both California senators’ offices regarding the consequences of Medicare disproportionate share hospital cuts. CHA members also expressed opposition to any further cuts to hospitals as part of a deal to repeal the sustainable growth rate. CHA urges members to continue contacting their representatives in opposition to any further cuts to hospital payments.
The Centers for Medicare & Medicaid Services (CMS) has posted the attached notice announcing preliminary federal disproportionate share hospital (DSH) allotments for fiscal year (FY) 2014. The notice also announces the preliminary federal share FY 2014 limits on aggregate DSH payments that states may make to institutions for mental diseases (IMDs) and other mental health facilities. CMS estimates California’s DSH allotment at $1.169 billion and the state’s IMD DSH limit at $777,960. The DSH allotment notice was delayed by legislation that repealed Medicaid DSH cuts under the Affordable Care Act for FYs 2014 and 2015. Since the final rule implementing the cuts applied only to 2014 and 2015 and the legislation pushes both the 2014 and 2015 cuts into 2016, the final rule is effectively moot. CHA believes CMS must go through a new round of rulemaking, as it had planned for implementing the 2016 cuts, and that may not occur until 2015. CHA continues to monitor the situation closely and will keep the members informed.
CHA President/CEO C. Duane Dauner was joined by 10 representatives of CHA member hospitals in Washington, D.C., Dec. 3 for the CHA and American Hospital Association hospital advocacy day. The group met with about half of the California Congressional delegation, including House Minority Leader Nancy Pelosi, House Majority Whip Kevin McCarthy, and Sens. Boxer and Feinstein.
The Centers for Medicare & Medicaid Services (CMS) has posted the final rule implementing the provision of the Affordable Care Act that reduces Medicaid state disproportionate share hospital (DSH) allotments. CHA is currently reviewing the final provisions and will share more information and a detailed summary soon. The final rule adopts a proposal to ignore states’ decisions on the now-optional Medicaid expansion over the next two years when calculating DSH reductions, totaling $1.1 billion. According to a CMS fact sheet about the final rule, states’ decisions to expand Medicaid will not affect the reduction in DSH allotments. CMS states that it intends to revisit the DSH allotment reduction methodology in federal fiscal year 2016. The final rule is attached.