IPPS Proposed Rule Continues Redistribution of Medicare DSH Payments

April 30, 2018

The Centers for Medicare & Medicaid Services’ (CMS) Medicare inpatient prospective payment system (IPPS) proposed rule for Federal fiscal year (FY) 2019 continues the phasing-in of changes to the uncompensated care pool (UCP) distributions. Specifically, two-thirds of a hospital’s UCP distribution would be based on S-10 bad debt and charity care data, with the rest based on low-income days. Flat-rate and Puerto Rico hospitals would continue to have distributions based on low-income days only. The proposed rule also updates the data used to determine the size of the UCP, which would increase the size of the pool by $1.45 billion.

Based on last year’s S-10 data, New York hospitals were projected to lose $600 million from this change when fully phased in by 2020. GNYHA is updating this analysis based on the updated data files released with the FY 2019 IPPS proposed rule and will soon provide additional information, including hospital-specific impact analysis.

GNYHA strongly opposes this proposal due to concerns about the quality and validity of the unaudited S-10 data, as well as inequities in the distributions that result from CMS not considering other subsidies that hospitals receive for uncompensated care. GNYHA will continue to lobby this issue with the Administration and seek a fair and equitable solution that mitigates the impact on member hospitals.

GNYHA will review the proposed rule’s provisions at its May 2 Finance & Reimbursement Committee meeting.