AHA expresses concerns over proposed DSH limitations rule


The American Hospital Association has raised a number of concerns with the Centers for Medicare & Medicaid Services over its proposed rule that places limitations on disproportionate share hospital payments.

The limits are in place to ensure that hospitals don't necessarily make a profit on federal reimbursements when caring for uninsured patients. The CMS has proposed a new rule that outlines how it would govern the process. But the AHA has requested in a letter (pdf.) to CMS Acting Administrator Andy Slavitt that the agency withdraw the rule.

Specifically, the AHA cited three cases currently being litigated in federal court: Texas Children's Hospital v. Burwell; Missouri Department of Social Services v. U.S. Department of Health and Human Services; and the New Hampshire Hospital Association v. Burwell. All of the cases argue over the limitations for recouping Medicaid funds, and whether an appeals process should be available in case of a recoupment for overpayment. The Missouri case involves some $217 million recouped funds.

“The AHA supports the plaintiffs’ arguments in these cases and believes that CMS’ proposed rule, with a mere 30-day comment period, only creates more chaos and uncertainty for Medicaid DSH hospitals in the face of these pending court decisions,” said the letter, which was penned by Thomas Nickels, the AHA's executive vice president.

DSH payments are currently a sore point for many hospitals. The DSH program is winding down in lieu of the Medicaid expansion under the Affordable Care Act. That has meant hospitals in the states that have declined to expand Medicaid (Missouri among them) stands to lose billions of dollars in DSH revenues over the coming years.

In addition to citing the litigation, the AHA also expressed concern with the proposal to deduct all third-party payments against DSH payments.

“We believe such a policy is unreasonable because it would apply to individuals eligible for Medicaid and with third-party coverage, but for which the Medicaid program was never billed,” the letter said. “Such is often the case for children with complex healthcare needs where private insurance pays the hospital bill and the hospital does not bill the Medicaid program. Other examples also could include settlements where a Medicaid patient is hospitalized as the result of an automobile accident and his/her hospital care is paid for by the insurance of the driver responsible for the accident.”