CHA News Article

CMS Releases New Guidance on Medicaid DSH Audit Reports

The Centers for Medicare & Medicaid Services (CMS) has issued the attached guidance regarding Medicaid disproportionate share (DSH) audit reports in advance of the State Plan Rate Year (SPRY) 2011 audits and reports that are due by Dec. 31, 2014. To develop the guidance, CMS conducted desk reviews of all relevant state audits and reports for SPRYs 2005 through 2009, as well as in-depth, on-site reviews of various states and hospitals throughout the country. CMS notes that, beginning with the SPRY 2011 audits, it will regard audit findings demonstrating DSH payments that exceed the hospital-specific DSH limits as representing discovery of overpayments to providers, resulting in the return of the federal share of the payment to the federal government. However, if the excess DSH payments are redistributed by the state to other qualifying hospitals as part of the federally approved Medicaid state plan, the federal share is not required to be returned.