CMS'S EVOLVING APPROACH TO TREATMENT OF SECTION 1115 WAIVER DAYS IN MEDICARE DSH CALCULATION
For more than two decades, the Medicare disproportionate share hospital ("DSH") regulation has permitted hospitals to include days in the numerator of the Medicaid fraction that are attributable to patients who were covered under a Centers for Medicare & Medicaid Services ("CMS")-approved Section 1115 waiver. But in spite of its regulation, CMS for years has attempted to exclude from the DSH calculation days of patients covered under Section 1115 waivers through an uncompensated care pool program or premium assistance program. After losing before multiple courts in cases relating to waiver programs in three different states, CMS finally appears poised to permit hospitals to claim these categories of waiver days as Medicaid days in the DSH calculation. As discussed below, this presents an opportunity for hospitals located in states with these kinds of Section 1115 waiver programs to increase their Medicare DSH reimbursement.
For years, the CMS and its contractors have attempted to exclude days from the numerator of the DSH Medicaid fraction attributable to patients who were covered under a CMS-approved Section 1115 waiver. Section 1115...
