The regulation has already been finalized but hospitals continue to protest Medicare’s intention to reduce their Medicare disproportionate share (Medicare DSH) uncompensated care payments.

The cut, proposed at $115 million in April, when the Centers for Medicare & Medicaid Services proposed it, ended up just shy of $1 billion in the final regulation.  The major change, according to CMS, comes because the agency’s actuaries have projected a lower uninsured rate than when CMS proposed the $115 million cut in the spring.

Medicare DSH payments are intended to help hospitals that care for especially large numbers of uninsured patients with the cost of providing such care.

Protesting hospitals point to the end of the COVID-19 pandemic’s continuous Medicaid eligibility, which has already removed four million people from the Medicaid rolls, to support their continued need for Medicare DSH uncompensated care money.  CMS counters that many of those people will find alternative health insurance.

Even though CMS has already finalized the Medicare DSH cut, opponents of the cut maintain that the agency has the authority to reverse course in time for FY 2024.

Learn more about the hospital industry’s continued fight to reverse FY 2024 Medicare DSH cuts from the Axios article …

The following is the latest health policy news from the federal government for July 29-August 3.  Some of the language used below is taken directly from government documents.

Medicare Payment Regulations

• CMS has issued a final rule updating Medicare payment policies and rates for inpatient and long-term-care hospital services under its inpatient prospective payment system and long-term care prospective payment system for FY 2024.  The final rule increases hospital inpatient rates 3.1 percent and LTCH rates 3.3 percent in FY 2024.  Other highlights include a nearly $1 billion cut in Medicare disproportionate share (Medicare DSH) and Medicare DSH uncompensated care payments; changes in diagnosis codes and health equity hospital categorizations to address health equity and a program that will pay bonuses to hospitals that provide excellent care to especially large numbers of dually eligible (Medicare and Medicaid) patients; continuation of Medicare’s low-wage hospital policy and changes in its rural wage index calculation methodology; and more.  Learn about these and other aspects of the final FY 2024 inpatient prospective payment system and long-term care prospective payment system from this CMS news release; a CMS fact sheet; and a pre-publication version of the final rule.
• CMS has issued a

The following is the latest health policy news from the federal government for May 28 – June 8.  Some of the language used below is taken directly from government documents.

Centers for Medicare & Medicaid Services

• CMS has announced a new primary care model – the Making Care Primary Model – that will be tested by the Center for Medicare and Medicaid Innovation in eight states.  The model seeks to improve care for patients by expanding and enhancing care management and care coordination, equipping primary care clinicians with tools to form partnerships with health care specialists, and leveraging community-based connections to address patients’ health needs as well as their health-related social needs.  The goals of the Making Care Primary Model are to ensure that patients receive primary care that is integrated, coordinated, person-centered, and accountable; to create a pathway for primary care organizations and practices – especially small, independent, rural, and safety-net organizations – to enter into value-based care arrangements; and to improve the quality of care and health outcomes of patients while reducing program expenditures.  The Making Care Primary Model will provide participants with additional revenue to build infrastructure, make primary care services more accessible, and better coordinate care

Medicare rates would rise for some providers and fall for others based on recommendations made to Congress last week by the Medicare Payment Advisory Commission, the independent congressional agency that advises Congress on Medicare reimbursement matters.

MedPAC’s rate recommendations to Congress and the administration, which it approved at its January 2023 meeting, are:

• Outpatient and inpatient prospective payment systems – under current law, the estimated increase would be about 2.9 percent; MedPAC proposes 2.9 percent plus one percent.
• Physician services – increase fees 50 percent of the projected increase in the medical economic index (MEI).
• Skilled nursing facilities – reduce the current base rate three percent.
• Home health services – reduce the current base rate seven percent.
• Hospice services – a complex proposal to increase some payments 2.9 percent but to reduce payments “for providers with very long lengths of stay and lost costs relative to payments.”
• Outpatient dialysis – MedPAC endorses the current law’s call for a 1.8 percent increase.

Breaking with recent years, MedPAC has discontinued its practice of offering rate recommendations for long-term-care hospitals (LTCHs) and ambulatory surgical centers, citing inadequate data on which to base recommendations.

In addition, MedPAC offers recommendations for redistributing current Medicare disproportionate …

Fifteen years ago, a federal court ruled that the Centers for Medicare & Medicaid Services was calculating Medicare disproportionate share payments (Medicare DSH) incorrectly and ordered the agency to fix the problem and reimburse eligible hospitals for the underpayments they had experienced.

Now, after 15 years of waiting, 40 of those hospitals are suing for their money.

In a suit filed in federal court, the hospitals outline the actions CMS has and has not taken to correct the problem and write that

The agency’s contractors have not performed the revised determinations required under the ruling and the rule and have not paid the plaintiff hospitals any of the additional amounts due them for the periods at issue.

In seeking back payment and damages, the plaintiffs also write that

The agency’s unreasonable delay has cost the plaintiff hospitals tens of millions of dollars in funds that should have been paid to them many years ago for the higher costs that they incurred to treat low-income patients more than a decade ago. 

The purpose of Medicare DSH payments is to help hospitals that care for unusually large numbers of low-income and uninsured patients with the cost of caring for those patients.

Learn …