One of the most significant Medicare subsidies for Hospitals is the Disproportionate Share (DSH) payment, which is a “bonus” payment made to hospitals that treat large numbers of low-income patients. The DSH adjustment is an add-on to the Diagnosis Related Group based payments that inpatient acute care hospitals receive as a part of the prospective payment system (PPS).
Generally and most often, qualification for a DSH payment is based upon a provider’s disproportionate patient percentage (DPP), which is the sum of two fractions – the “Medicaid fraction” and the “SSI/Medicare fraction.” The Medicaid fraction numerator is the number of Medicaid eligible PPS days associated with patients discharged in a cost reporting period. The Medicaid fraction denominator is the total number of all discharged days for the cost reporting period. The SSI/Medicare fraction is calculated and given to providers by the Center for Medicare and Medicaid Services (CMS) and should represent the number of days associated with Medicare entitled patients who qualify for SSI during the cost reporting period, divided by the number of discharged days associated with all Medicare entitled patients for the cost reporting period.
Our goal is, and has always been, to provide our clients with the best finance and reimbursement consulting services in compliance with all applicable laws and regulations, while positioning providers for optimal reimbursement.