Medicare DSH Under the Affordable Care Act

Effective October 1, 2013 (FFY 2014), hospitals will receive only 25% of their Medicare DSH payments based on the current formula.  As mandated in the Affordable Care Act (ACA) the other 75% of DSH payments will be based upon a hospital’s charity and uncompensated care costs.  A possible source of this information may be the Worksheet S-10 from the new Medicare Cost Report Form 2552-10.

While most information for Medicare cost reports is derived from general ledger costs and balance sheet data elements, the S-10 form will require a multi-disciplinary approach involving detail charges, payments and account write-offs.  The data that should be reported accurately on Worksheet S-10 will likely change between the time the cost report is filed and is subsequently audited as patient accounts are adjudicated.

Recommendation: 

Plan to revise (amend) the cost report prior to audit to ensure the amounts are accurate and supportable upon intermediary audit.  Create a protested item for all lines of the S-10 to provide you the opportunity to make changes as better information becomes available.  Since you do not know how S-10 information is going to be used, you will want the flexibility to make adjustments through appeals and cost report reopening requests. Continue to protect your Medicaid eligible day appeal rights and keep focused on documenting the Medicaid eligible days.

For more information, please contact Susan Starr at 925-377-5182.

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