Or. Admin. Code § 410-125-0150 - Disproportionate Share
(1) The
Disproportionate-share hospital (DSH) payment is an additional reimbursement
made to hospitals that serve a disproportionate share of low-income patients
with special needs.
(a) To receive DSH
payments, a hospital must have at least two obstetricians with staff privileges
at the hospital who have agreed to provide non-emergency obstetrical services
to Medicaid patients. For hospitals in a rural area (outside of a Metropolitan
Statistical Area, as defined by the Executive Office of Management and Budget),
the term "obstetrician" includes any physician with staff privileges at the
hospital that performs non-emergency obstetric procedures. This requirement
does not apply to a hospital in which a majority of inpatients are under 18
years of age, or a hospital that had discontinued or did not offer
non-emergency obstetric services as of December 21, 1987. No hospital may
qualify for disproportionate share payments unless the hospital has, at a
minimum, a Medicaid utilization rate of 1 percent. The Medicaid utilization
rate is the ratio of total paid Medicaid (Title XIX, non-Medicare) days to
total inpatient days. Newborn days, days in specialized wards, and
administratively necessary days are included. Days attributable to individuals
eligible for Medicaid in another State are also accounted for;
(b) Information on total inpatient days is
taken from the most recent Medicare Cost Report.
(2) A hospital's eligibility for DSH payments
is determined at the beginning of each fiscal year. Hospitals that are not
eligible under Criteria 1 may apply for eligibility at any time during the year
under Criteria 2. A hospital may be determined eligible under Criteria 2 only
after being determined ineligible under Criteria 1.
(3) Eligibility under Criteria 2 is effective
from the beginning of the quarter in which eligibility is approved.
Out-of-state hospitals are eligible for DSH payments if they have been
designated by their state Title XIX Medicaid program as eligible for DSH
payments within that state:
(a) Criteria 1:
One or more standard deviation above the mean
(A) The ratio of total paid Medicaid
inpatient (Title XIX, non-Medicare) days for hospital services (regardless of
whether the services were furnished on a fee-for-service basis or through a
managed care entity) to total inpatient days is one or more standard deviations
above the mean for all Oregon hospital;
(B) Information on total inpatient days is
taken from the most recent audited Medicare Cost Report. The total paid
Medicaid inpatient days is based on Division of Medical Assistance Programs'
(Division) records for the same cost reporting period;
(C) Information on total paid Medicaid days
is taken from Division reports of paid claims for the same fiscal period as the
Medicare Cost Report.
(b) Criteria 2: A low-income utilization rate
exceeding 25 percent
(A) The Low income
utilization rate is the sum of percentages (3)(b)(A)(i) and (3)(b)(A)(ii)
below:
(i) The Medicaid percentage: The total
of Medicaid inpatient and outpatient revenues paid to the hospital for hospital
services (regardless of whether the services were furnished on a
fee-for-service basis or through a managed care entity) plus any cash subsidies
received directly from State and local governments in the most recent Medicare
cost reporting period. This amount is divided by the total amount of inpatient
and outpatient revenues and cash subsidies of the hospital for patient services
in the most recent Medicare cost reporting period. The result is expressed as a
percentage;
(ii) The charity care
percentage: The total hospital charges for inpatient hospital services for
charity care in the most recent Medicare cost reporting period, minus any cash
subsidies received directly from State and local government in the same period
is divided by the total amount of the hospital's charges for inpatient services
in the same period. The result is expressed as a percentage;
(iii) Charity care is provided to individuals
who have no source of payment, including third party and personal
resources.
(B) Charity
care shall not include deductions from revenues or the amount by which
inpatient charges are reduced due to contractual allowances and discounts to
other third party payers, such as Fully-Capitated Health Plans (FCHPs),
Medicare, Medicaid, etc;
(C) The
information used to calculate the low income utilization rate is taken from the
following sources:
(i) The most recent
Medicare Cost Reports;
(ii) The
Division's records of payments made during the same reporting period;
(iii) Hospital-provided financial statements,
prepared and certified for accuracy by a licensed public accounting firm for
the same reporting period;
(iv)
Hospital-provided official records from state and county agencies of any cash
subsidies paid to the hospital during the same reporting period;
(v) Any other information that the Division,
working in conjunction with representatives of Oregon hospitals, determines is
necessary to establish eligibility.
(D) The Division determines within 30 days of
receipt of all required information if a hospital is eligible under the low
income utilization rate criteria.
(c) Disproportionate-share payment
calculations:
(A) All hospitals that have
been deemed DSH hospitals will always qualify for DSH payments under criteria 1
or criteria 2. Hospital ranking is done on an annual basis for all hospitals.
Once eligible hospitals are determined Division calculates the standard
deviations for the hospitals to determine if they will be eligible under
criteria 1 or criteria 2.
(B)
Criteria 1:one or more deviations above the mean The quarterly DSH payment to
hospitals eligible under criteria 1 is the sum of Diagnosis Related Groups
(DRG) weights for paid Title XIX non-Medicare claims for the quarter multiplied
by a percentage of the hospital-specific Unit Value; this determines the
hospital's DSH payment for the current quarter. The Unit Value used for
eligible Type A, Type B, and Critical Access Hospitals is set at the same rate
as for out-of-state hospitals. The calculation is as follows:
(i) For eligible hospitals more than one
standard deviation and less than two standard deviations above the mean, the
disproportionate share percentage is 5%. The total of all relative weights is
multiplied by the hospital's unit value. This amount is multiplied by 5% to
determine the DSH payment;
(ii) For
eligible hospitals more than two and less than three standard deviations above
the mean, the percentage is 10%. The total of all relative weights is
multiplied by the hospital's unit value. The amount is multiplied by 0.10 to
determine the DSH payment.
(iii)
For eligible hospitals more than three standard deviations above the mean, the
percentage is 25%. The total of all relative weights is multiplied by the
hospital's unit value. This amount is multiplied by 0.25 to determine the DSH
payment.
(C) Eligibility
under Criteria 2 - For hospitals eligible under Criteria 2 (low income
utilization rate), the payment is the sum of DRG weights for claims paid by the
Division in the quarter, multiplied by the hospital's disproportionate share
adjustment percentage established under Section 1886(d)(5)(F)(iv) of the Social
Security Act multiplied by the hospital's unit value;
(D) For out-of-state hospitals, the quarterly
DSH payment is 5% of the out-of-state unit value multiplied by the sum of the
Oregon Medicaid DRG weights for the quarter. Out-of-state hospitals that have
entered into agreements with the Division for payment are reimbursed according
to the terms of the agreement or contract.
(d) Public Academic Medical Center
Disproportionate Share adjustments:
(A)
Public academic medical centers that meet the following eligibility standards
shall be deemed eligible for additional DSH payments up to 100% of their cost
for serving Medicaid fee for service clients and indigent and uninsured
patients:
(i) The hospital must have at least
two obstetricians with staff privileges at the hospital who have agreed to
provide obstetric services to individuals who are entitled to medical
assistance for such services; and
(ii) The hospital must be located within the
State of Oregon (border hospitals are excluded); and
(iii) The hospital provides a major medical
teaching program, defined as a hospital with more than 200 residents or
interns.
(B) 100% of the
costs for hospitals qualifying for this DSH payment will be determined from the
following sources:
(i) The most recent
Medicare Cost Reports; or
(ii) The
Division's record of payments made during the same reporting period;
or
(iii) Hospital provided official
records from state and county agencies of any cash subsidies paid to the
hospital during the same reporting period; or
(iv) Any information which the Division,
working in conjunction with representatives of Oregon hospitals, determines
necessary to establish cost.
(e) Additional Disproportionate Adjustments:
(A) For all hospitals with a Medicaid
utilization rate above one percent of all payer utilization, the DSH payment is
the ratio of the hospital's low income shortfall to the low income shortfall
for all eligible hospitals multiplied by the total Federal disproportionate
share allotment remaining after disproportionate payments have been made.(B)
The low income shortfall is the Medicaid costs for inpatient and outpatient
hospitals services plus uncompensated care for the uninsured cost for inpatient
and outpatient hospital services less total Medicaid and self-pay payments for
inpatient and outpatient hospital services.
(f) Disproportionate-share payment schedule:
(A) Hospitals qualifying for DSH payments
under section (3) (c) above will receive quarterly payments based on claims
paid during the preceding quarter. Hospitals that were eligible during one
fiscal year but are not eligible for disproportionate share status during the
next fiscal year will receive DSH payments based on claims paid in the quarter
in which they were eligible. Hospitals qualifying for DSH payments under
section (3) (e) above will receive quarterly payments of 25 percent of the
amount determined under this section;
(B) Effective October 1, 1994, and in
accordance with the Omnibus Budget Reconciliation Act of 1993, DSH payments to
hospitals will not exceed 100 percent of the "basic limit" which is:
(i) The inpatient and outpatient costs for
services to Medicaid patients, less the amounts paid by the State under the
non-DSH payment provisions of the State plan, plus;
(ii) The inpatient and outpatient costs for
services to uninsured indigent patients, less any payments for such services.
An uninsured indigent patient is defined as an individual who has no other
resources to cover the costs of services delivered. The costs attributable to
uninsured patients are determined through disclosures in the Medicare
(HCFA-2552) cost report and state records on indigent care.
(C) The State has a contingency plan to
assure that disproportionate share hospital payments will not exceed the State
disproportionate share hospital allotment (allotment). A reduction in payments
in proportion to payments received will be effected to meet the requirements of
section 1923(f) of the Social Security Act. DSH payments are made quarterly.
Before payments are made for the last quarter of the Federal fiscal year,
payments for the first three quarters and the anticipated payment for the last
quarter are cumulatively compared to the allotment.
(i) If the allotment will be exceeded, the
DSH payments for the last quarter will be adjusted proportionately for each
hospital qualifying for payments under section (3)(d).
(ii) If the allotment will still be exceeded
after this adjustment, DSH payments to out-of-state hospitals will be adjusted
in proportion to DSH payments received during the previous three
quarters.
(iii) If this second
adjustment still results in the allotment being exceeded, hospitals qualifying
for payments under section (3)(c) (Criteria 1 and 2) will be adjusted by
applying each hospital's proportional share of payments during the previous
three quarters to total DSH payments to all hospitals for that
period.
(D) Similar
monitoring, using a predetermined limit based on the most recent audited costs,
and including the execution of appropriate adjustments to DSH payments are in
effect to meet the hospital specific limit provisions detailed in section
1923(g) of the Social Security Act.
Notes
Stat. Auth.: ORS 413.042
Stats. Implemented: ORS 414.065
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