CMS issues administrator ruling re: DSH payment appeals and recalculations

The Centers for Medicare and Medicaid Services has issued the administrator ruling described in the proposed rule for the fiscal year 2011 inpatient prospective payment system (IPPS) that addresses key issues involving Medicare disproportionate-share hospital (DSH) payments. Basically, "this administrative ruling will remand certain issues back from the Provider Reimbursement Review Board or other administrative tribunal to the Medicare contractors for a recalculation of the hospital DSH payments," said agency officials at the April Hospital and Hospital Quality Open Door Forum. The ruling addresses "follow-on cases" to the Baystate Medical Center v. Shalala lawsuit, they pointed out.

The ruling deals with CMS' process for matching Medicare and supplemental security income (SSI) eligibility data, as well as for calculating hospital SSI fractions, explaining how CMS and the Medicare contractor will recalculate the provider's DSH payment adjustment and make any payment deemed owing for each remanded qualifying appeal.

"CMS and the Medicare contractors will take the steps necessary to apply a suitably revised data matching process in determining the SSI fraction, and recalculating the DSH payment adjustment, for each properly pending claim on the SSI fraction data matching process issue that is remanded by an administrative appeals tribunal and is found to qualify for relief under this Ruling," states CMS acting Administrator Marilyn Tavenner in Ruling CMS-1498-R. "Such suitably revised data matching process will consist of any new data matching process that is adopted in the FY 2011 IPPS final rule; or, if a new data matching process is not adopted in the FY 2011 IPPS final rule, CMS will use the same revised data matching process as it used to implement the Baystate decision."

The Medicare contractors will apply "the same suitably revised data matching process in determining the SSI fraction, and calculating the DSH payment adjustment," for each open hospital cost reporting period where the contractor hasn't final-settled the provider's Medicare cost report via an initial notice of program reimbursement.

The ruling also addresses provider challenges of exclusions from the disproportionate patient percentage (DPP) of: noncovered inpatient hospital days for Medicare Part A patients, days where Part A inpatient hospital benefits were exhausted, and labor/delivery room inpatient days.

To learn more:
- read the administrator ruling
- read the proposed IPPS rule's take on the CMS ruling
- read this Powers Pyle Sutter and Verville PC summary of the Baystate case
- read the PRRB alert on the Baystate case

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