Medicaid program; state disproportionate share hospital allotment reductions. Final rule

Area of Science:

• Health Policy and Law
• Healthcare Finance
• Public Health Administration

Background:

• The Affordable Care Act mandates reductions in state Medicaid Disproportionate Share Hospital (DSH) allotments.
• These aggregate reductions are scheduled annually from fiscal year (FY) 2014 through FY 2020.
• Implementation of these reductions requires a defined methodology and reporting standards.

Purpose of the Study:

• To delineate the methodology for implementing mandated DSH allotment reductions for FY 2014 and FY 2015.
• To establish additional DSH reporting requirements necessary for the health reform methodology.
• To ensure compliance with the Affordable Care Act's fiscal mandates on DSH payments.

Main Methods:

• Final rule promulgation detailing the calculation and application of DSH allotment reductions.
• Specification of reporting requirements for hospitals and states.
• Analysis of the statutory framework for DSH payment adjustments.

Main Results:

• A clear methodology for implementing DSH reductions for FY 2014 and FY 2015 has been established.
• New DSH reporting requirements are detailed for use in the DSH health reform methodology.
• The rule provides a framework for the phased reduction of DSH payments.

Conclusions:

• The finalized rule provides a mechanism for the required reductions in Medicaid DSH allotments.
• The established methodology and reporting requirements support the implementation of healthcare reform.
• These measures are critical for managing healthcare expenditures and ensuring program integrity.