New CMS Hospital Payment Rule Not Accurate Reflection of Care Costs

The Centers for Medicare & Medicaid Services (CMS) issued a final rule last week stating that the hospital-specific limits on Medicaid disproportionate share hospital (DSH) payments should be calculated after taking into account third-party payments for uncompensated care costs.

The American Hospital Association (AHA) opposes the final rule, saying it represents new policy – instead of clarification on existing policy – and that the DSH payments under it would not “reflect the real economic burden on hospitals.”

The rule comes the same month as a federal court ruling in New Hampshire that found CMS incorrectly used its Frequently Asked Questions on its website rather than notice-and-comment rule making to calculate the DSH payments.

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