Hospitals that treat a significant number of low-income patients receive an add-on payment known as the DSH adjustment. 42 U.S.C. § 1395ww(d)(5)(F). One component in that calculation is the Medicaid fraction, which includes total patient days attributed to Medicaid eligible patients. For years hospitals have litigated the issue of what days can be included as Medicaid eligible days. The statute permits the Secretary of Health and Human Services (Secretary) to include patient days as Medicaid eligible even if the patients are not Medicaid eligible, if they are regarded as such because they receive benefits under a demonstration project approved under subchapter XI of the Social Security Act. Id.
The Medicare DSH regulations were amended in 2000, to permit hospitals to "include all days attributable to populations eligible for Title XIX matching payments through a waiver approved under Section 1115 of the Social Security Act." 42 C.F.R. § 412.106(b)(4)(ii). The Secretary further amended the DSH regulations in 2006, to clarify that to be included the patient must be eligible for inpatient hospital services under either a Medicaid plan or Section 1115 waiver. 42 C.F.R. § 412.106(b)(4)(i).
Case DiscussionThe Florida Medicaid program operated a demonstration project authorized pursuant to a Section 1115 waiver, which included the creation of a Low Income Pool (LIP)...
