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Medicare, Disproportionate Share, Charity Care

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    Posted by: Christopher J. King, MedStar Health

    Date: January 23, 2015 9:07 AM

    Effective for Medicare Acute, discharges beginning on or after October 1, 2013, the methodology for determining and paying Disproportionate Share (DSH) payments was changed.

    The payment was essentially split into two components.
    The first component, represents 25% of the traditional DSH payment.
    The second component which represents the remaining 75%, is a per discharge amount for Uncompensated Care (UCP). The UCP is based on each hospitals’ pro rata share of the national UCP pool as published in the Federal Register for each federal fiscal year.

    Historically, the monies received for DSH have not been used to reduce Charity Care costs. With this new payment methodology change, would we have to reduce our Charity Care costs for the UCP payments received or treat these payments similar to DSH?

    We are interested in learning how hospitals are handling this issue?________________________________________________________________________________________________________________________________________________________________________________

    Response: Peter Morgan, Financial Management Department
    Date: January 23, 2015 3:51 PM
    Dr. King,

    I asked our Reimbursement Manager for a response to your question:

    The method for qualifying for either the 25% DSH or the UCP is still the same: it is based on a combination of the Medicaid % and the SSI %. The 75% UCP portion is being reduced over time based on the government’s estimate of the uninsured population. As more people are covered due to Medicaid expansion and/or the health insurance exchanges, the number of uninsured people will decline.

    Since the basis of qualifying for DSH & UCP payments has not changed since the time when we were paid only the DSH amount, I don’t think the treatment of either DSH or UCP payments should change for community benefit purposes.

    Dan Border
    Reimbursement Manager

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