Communications

(Mar. 1, 2024) – The Centers for Medicare & Medicaid Services recently released the final disproportionate share hospital third-party payer rule, addressing recent legislative changes that govern the hospital-specific limit on Medicaid DSH payments. Federal law requires state Medicaid programs to make DSH payments to qualifying hospitals that serve a large number of Medicaid and uninsured individuals. States generally have flexibility regarding the specific hospitals to which they make payments and how they determine the amount of those payments, within certain parameters. For example, under the hospital-specific limits, a hospital's DSH payments may not exceed the costs incurred by that hospital in furnishing inpatient and outpatient hospital services during the year to certain Medicaid beneficiaries and the uninsured, less certain other payments covered by law. This rule will afford states and hospitals more clarity on how the limit that took effect on Oct. 1, 2021, will be calculated. Additionally, it will enhance administrative efficiency by making technical changes and clarifications to the DSH program.
--Shannan Flach