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From Health Law Daily, May 6, 2015

CMS grants election right for DSH payment adjustments

By Bryant Storm, J.D.

CMS provided notice that the remedy for recalculation of certain Medicare disproportionate share hospital (DSH) payment adjustments will be changed through an amendment to CMS Ruling 1498-R. The changes to 1498-R consist of an election allowing DSHs to decide how to report inpatient days of a Medicare Part A beneficiary for purposes of the hospital's Medicare Supplemental Security Income (SSI) fraction. The CMS ruling applies only to the recalculation of the SSI fraction component of the DSH payment adjustment for cost reports based on patient discharges prior to October 1, 2004 (CMS Ruling, No. CMS-1498-R2, April 22, 2015).

Election. The amendment is being issued to clarify an issue not definitively resolved by Medicare statute. Under the amended ruling, DSHs will be given an election to: (1) to “include inpatient days of a person entitled to Medicare Part A in the numerator of the hospital's Medicare-SSI fraction (provided that the patient was also entitled to SSI) and in that fraction's denominator, even if the inpatient stay was not covered under Part A or the patient's Part A hospital benefits were exhausted” or (2) “receive a suitably revised Medicare-SSI fraction that excludes such days where the patient's Part A hospital benefits were exhausted or otherwise were not covered under Part A from both the numerator and denominator of the Medicare-SSI fraction.”

Implementation. The CMS ruling clarifies that the only change being made is to allow hospitals “to elect whether to receive Medicare-SSI fractions on the basis of ‘total days’ or ‘covered days’” for fiscal year 2004 and earlier. The election is available to hospitals when a contractor has not yet settled a provider’s cost report or when an appeal is remanded under CMS Ruling 1498-R. CMS expressed its intention to publish examples of SSI fractions computed on the basis of "covered days" and "total days" on the agency’s website.

MainStory: TopStory DSHNews CMSNews MedicareContractorNews PaymentNews PartANews CostReportNews

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