Current through Register Vol. 24-18, September 15, 2024
(1) As required by
Section 1902 (a)(13)(A) of the Social Security Act (42 U.S.C.
1396(a)(13)(A)) and
RCW
74.09.730, the medicaid agency makes payment
adjustments to eligible hospitals that serve a disproportionate number of
low-income clients with special needs. These adjustments are also known as
disproportionate share hospital (DSH) payments.
(2) No hospital has a legal entitlement to
any DSH payment. A hospital may receive DSH payments only if:
(a) It satisfies the requirements of
42 U.S.C.
1396r-4;
(b) It satisfies all the requirements of
agency rules and policies; and
(c)
The legislature appropriates sufficient funds.
(3) For purposes of eligibility for DSH
payments, the following definitions apply:
(a)
"Base year" means the 12-month medicare cost report year that ended during the
calendar year immediately preceding the year in which the state fiscal year
(SFY) for which the DSH application is being made begins.
(b) "Case mix index (CMI)" means the average
of diagnosis related group (DRG) weights for all of an individual hospital's
DRG-paid medicaid claims during the SFY two years prior to the SFY for which
the DSH application is being made.
(c) "Charity care" means necessary hospital
care rendered to persons unable to pay for the hospital services or unable to
pay the deductibles or coinsurance amounts required by a third-party payer. The
charity care amount is determined in accordance with the hospital's published
charity care policy.
(d) "DSH
reporting data file (DRDF)" means the information submitted by hospitals to the
agency which the agency uses to verify medicaid client eligibility and
applicable inpatient days.
(e)
"Hospital-specific DSH cap" means the maximum amount of DSH payments a hospital
may receive from the agency during a SFY. If a hospital does not qualify for
DSH, the agency will not calculate the hospital-specific DSH cap and the
hospital will not receive DSH payments.
(f) "Inpatient medicaid days" means inpatient
days attributed to clients eligible for Title XIX medicaid programs. Excluded
from this count are inpatient days attributed to clients eligible for state
administered programs, medicare Part A, Title XXI, the refugee program and the
family planning only programs.
(g)
"Low income utilization rate (LIUR)" means the sum of the following two
percentages used to determine whether a hospital is DSH-eligible:
(i) The ratio of payments received by the
hospital for patient services provided to clients under medicaid (including
managed care), plus cash subsidies received by the hospital from state and
local governments for patient services, divided by total payments received by
the hospital from all patient categories; plus
(ii) The ratio of inpatient charity care
charges less inpatient cash subsidies received by the hospital from state and
local governments, less contractual allowances and discounts, divided by total
charges for inpatient services.
(h) "Medicaid inpatient utilization rate
(MIPUR)" means the calculation (expressed as a percentage) used to determine
whether a hospital is DSH-eligible. The numerator of which is the hospital's
number of inpatient days attributable to clients who (for such days) were
eligible for medical assistance during the base year (regardless of whether
such clients received medical assistance on a fee-for-service basis or through
a managed care entity), and the denominator of which is the total number of the
hospital's inpatient days in that period. "Inpatient days" include each day in
which a person (including a newborn) is an inpatient in the hospital, whether
or not the person is in a specialized ward and whether or not the person
remains in the hospital for lack of suitable placement elsewhere.
(i) "Medicare cost report year" means the
12-month period included in the annual cost report a medicare-certified
hospital or institutional provider is required by law to submit to its fiscal
intermediary.
(j) "Nonrural
hospital" means a hospital that:
(i) Is not
participating in the "full cost" public hospital certified public expenditure
(CPE) payment program as described in WAC
182-550-4650;
(ii) Is not designated as an "institution for
mental diseases (IMD)" as defined in WAC
182-550-2600(2)(d);
(iii) Is not a small rural hospital as
defined in (n) of this subsection; and
(iv) Is located in the state of Washington or
in a designated bordering city. For DSH purposes, the agency considers as
nonrural any hospital located in a designated bordering city.
(k) "Obstetric services" means
routine, nonemergency obstetric services and the delivery of babies.
(l) "Service year" means the one year period
used to measure the costs and associated charges for hospital services. The
service year may refer to a hospital's fiscal year or medicare cost report
year, or to a state fiscal year.
(m) "Statewide disproportionate share
hospital (DSH) cap" means the maximum amount per SFY that the state can
distribute in DSH payments to all qualifying hospitals during a SFY.
(n) "Small rural hospital" means a hospital
that:
(i) Is not participating in the "full
cost" public hospital certified public expenditure (CPE) payment program as
described in WAC
182-550-4650;
(ii) Is not designated as an "institution for
mental diseases (IMD)" as defined in WAC
182-550-2600(2)(d);
(iii) Has fewer than 75 acute beds;
(iv) Is located in the state of Washington;
and
(v) Is located in a city or
town with a nonstudent population of no more than 17,806 in calendar year 2008,
as determined by population data reported by the Washington state office of
financial management population of cities, towns and counties used for the
allocation of state revenues. This nonstudent population is used for SFY 2010,
which begins July 1, 2009. For each subsequent SFY, the nonstudent population
is increased by two percent.
(o) "Uninsured patient" means a person
without creditable coverage as defined in
45 C.F.R.
146.113. (An "insured patient," for DSH
program purposes, is a person with creditable coverage, even if the insurer did
not pay the full charges for the service.) To determine whether a service
provided to an uninsured patient may be included for DSH application and
calculation purposes, the agency considers only services that would have been
covered and paid through the agency's fee-for-service
process.
(4) To be
considered for a DSH payment for each SFY, a hospital must meet the criteria in
this section:
(a) DSH application
requirements.
(i) Only a hospital located in
the state of Washington or in a designated bordering city is eligible to apply
for and receive DSH payments. An institution for mental disease (IMD) owned and
operated by the state of Washington is exempt from the DSH application
requirement.
(ii) A hospital that
meets DSH program criteria is eligible for DSH payments in any SFY only if the
agency receives the hospital's DSH application by the deadline posted on the
agency's website.
(b) The
DSH application review and correction period.
(i) This subsection applies only to DSH
applications that meet the requirements under (a) of this subsection.
(ii) The agency reviews and may verify any
information provided by the hospital on a DSH application. However, each
hospital has the responsibility for ensuring its DSH application is complete
and accurate.
(iii) If the agency
finds that a hospital's application is incomplete or contains incorrect
information, the agency will notify the hospital. The hospital must submit a
new, corrected application. The agency must receive the new DSH application
from the hospital by the deadline for corrected DSH applications posted on the
agency's website.
(iv) If a
hospital finds that its application is incomplete or contains incorrect
information, it may choose to submit changes and/or corrections to the DSH
application. The agency must receive the corrected, complete, and signed DSH
application from the hospital by the deadline for corrected DSH applications
posted on the agency's website.
(c) Official DSH application.
(i) The agency considers as official the last
signed DSH application submitted by the hospital as of the deadline for
corrected DSH applications. A hospital cannot change its official DSH
application. Only those hospitals with an official DSH application are eligible
for DSH payments.
(ii) If the
agency finds that a hospital's official DSH application is incomplete or
contains inaccurate information that affects the hospital's LIDSH payment(s),
the hospital does not qualify for, will not receive, and cannot retain, LIDSH
payment(s). Refer to WAC
182-550-5000.
(5) A hospital is a disproportionate share
hospital for a specific SFY if the hospital satisfies the medicaid inpatient
utilization rate (MIPUR) requirement (discussed in (a) of this subsection), and
the obstetric services requirement (discussed in (b) of this subsection).
(a) The hospital must have a MIPUR of one
percent or more; and
(b) Unless one
of the exceptions described in (i)(A) or (B) of this subsection applies, the
hospital must have at least two obstetricians who have staff privileges at the
hospital and who have agreed to provide obstetric services to eligible
individuals.
(i) The obstetric services
requirement does not apply to a hospital that:
(A) Provides inpatient services predominantly
to individuals younger than age 18; or
(B) Did not offer nonemergency obstetric
services to the general public as of December 22, 1987, when section 1923 of
the Social Security Act was enacted.
(ii) For hospitals located in rural areas,
"obstetrician" means any physician with staff privileges at the hospital to
perform nonemergency obstetric procedures.
(6) To determine a hospital's MIPUR, the
agency uses inpatient days as follows:
(a) The
total inpatient days on the official DSH application if this number is greater
than the total inpatient hospital days on the medicare cost report;
and
(b) The MMIS medicaid days as
determined by the DSH reporting data file (DRDF) process if the Washington
state medicaid days on the official DSH application do not match the eligible
days on the final DRDF. If the hospital did not submit a DRDF, the agency uses
paid medicaid days from MMIS.
(7) The agency administers the following DSH
programs (depending on legislative budget appropriations):
(a) Low income disproportionate share
hospital (LIDSH);
(b) Medical care
services disproportionate share hospital (MCSDSH);
(c) Small rural disproportionate share
hospital (SRDSH);
(d) Small rural
indigent assistance disproportionate share hospital (SRIADSH);
(e) Nonrural indigent assistance
disproportionate share hospital (NRIADSH);
(f) Public hospital disproportionate share
hospital (PHDSH);
(g) Children's
health program disproportionate share hospital (CHPDSH); and
(h) Sole community disproportionate share
hospital (SCDSH).
(8) The
agency allows a hospital to receive any one or all of the DSH payment it
qualifies for, up to the individual hospital's DSH cap (see subsection (10) of
this section) and provided that total DSH payments do not exceed the statewide
DSH cap. To be eligible for payment under multiple DSH programs, a hospital
must meet:
(a) The basic requirements in
subsection (5) of this section; and
(b) The eligibility requirements for the
particular DSH payment, as discussed in the applicable DSH program
WAC.
(9) For each SFY,
the agency calculates DSH payments for each DSH program for eligible hospitals
using data from each hospital's base year. The agency does not use base year
data for MCSDSH and CHPDSH payments, which are calculated based on specific
claims data.
(10) The agency's
total DSH payments to a hospital for any given SFY cannot exceed the
hospital-specific DSH cap for that SFY. Except for critical access hospitals
(CAHs), the agency determines a hospital's DSH cap as follows. The agency:
(a) Uses the overall ratio of
costs-to-charges (RCC) to determine costs for:
(i) Medicaid services, including medicaid
services provided under managed care organization (MCO) plans; and
(ii) Uninsured charges; then
(b) Subtracts all payments related
to the costs derived in (a) of this subsection; then
(c) Makes any adjustments required and/or
authorized by federal statute or regulation.
(11) A CAH's DSH cap is based strictly on the
cost to the hospital of providing services to medicaid clients served under MCO
plans, and uninsured patients. To determine a CAH's DSH cap amount, the agency:
(a) Uses the overall RCC to determine costs
for:
(i) Medicaid services provided under MCO
plans; and
(ii) Uninsured charges;
then
(b) Subtracts the
total payments made by, or on behalf of, the medicaid clients serviced under
MCO plans, and uninsured patients.
(12) In any given federal fiscal year, the
total of the agency's DSH payments cannot exceed the statewide DSH cap as
published in the federal register.
(13) If the agency's DSH payments for any
given federal fiscal year exceed the statewide DSH cap, the agency will adjust
DSH payments to each hospital to account for the amount overpaid. The agency
makes adjustments in the following program order:
(a) PHDSH;
(b) SRIADSH;
(c) SRDSH;
(d) SCDSH;
(e) NRIADSH;
(f) MCSDSH;
(g) CHPDSH; and
(h) LIDSH.
(14) If the statewide DSH cap is exceeded,
the agency will recoup DSH payments made under the various DSH programs, in the
order of precedence described in subsection (13) of this section, starting with
PHDSH, until the amount exceeding the statewide DSH cap is reduced to zero. See
specific program regulations in the Washington Administrative Code for
description of how amounts to be recouped are determined.
(15) The total amount the agency may
distribute annually under a particular DSH program is capped by legislative
appropriation. Any changes in payment amount to a hospital in a particular DSH
program means a redistribution of payments within that DSH program. When
necessary, the agency will recoup from hospitals to make additional payments to
other DSH-eligible hospitals within that DSH program.
(16) If funds in a specific DSH program need
to be redistributed because of legislative, administrative, or other state
action, only those hospitals eligible for that DSH program will be involved in
the redistribution.
(a) If an individual
hospital has been overpaid by a specified amount, the agency will recoup that
overpayment amount from the hospital and redistribute it among the other
eligible hospitals in the DSH program. The additional DSH payment to be given
to each of the other hospitals from the recouped amount is proportional to each
hospital's share of the particular DSH program.
(b) If an individual hospital has been
underpaid by a specified amount, the agency will pay that hospital the
additional amount owed by recouping from the other hospitals in the DSH
program. The amount to be recouped from each of the other hospitals is
proportional to each hospital's share of the particular DSH program.
(c) This subsection does not apply to the DSH
independent audit findings and recoupment process described in WAC
182-550-4940.
(17) All information related to a hospital's
DSH application is subject to audit by the agency or its designee. The agency
determines the extent and timing of the audits. For example, the agency or its
designee may choose to do an audit of an individual hospital's DSH application
and/or supporting documentation, or audit all hospitals that qualified for a
particular DSH program after payments have been distributed under that
program.
(18) If a hospital's
submission of incorrect information or failure to submit correct information
results in DSH overpayment to that hospital, the agency will recoup the
overpayment amount as allowed in
RCW
74.09.220 and chapter 41.05A RCW.
(19) DSH calculations use fiscal year data,
and DSH payments are distributed based on funding for a specific SFY.
Therefore, unless otherwise specified, changes and clarifications to DSH
program rules apply for the full SFY in which the rules are adopted.
Statutory Authority:
RCW
41.05.021. 12-20-029, §182-550-4900,
filed 9/26/12, effective 10/27/12. 11-14-075, recodified as §182-550-4900,
filed 6/30/11, effective 7/1/11. Statutory Authority:
2009 c
564
§§
201 and
209,
RCW
74.04.050,
74.04.057,
74.08.090, and
74.09.500. 10-11-032, §
388-550-4900, filed 5/11/10, effective 6/11/10. Statutory Authority:
RCW
74.08.090,
74.09.500. 07-14-090, §
388-550-4900, filed 6/29/07, effective 8/1/07; 06-08-046, § 388-550-4900,
filed 3/30/06, effective 4/30/06. Statutory Authority:
RCW
74.04.050,
74.08.090. 05-12-132, §
388-550-4900, filed 6/1/05, effective 7/1/05. Statutory Authority:
RCW
74.08.090,
74.04.050, and 2003 1st sp.s. c
25. 04-12-044, § 388-550-4900, filed 5/28/04, effective 7/1/04. Statutory
Authority:
RCW
74.08.090,
74.09.500,
74.09.035(1), and
43.88.290. 03-13-055, §
388-550-4900, filed 6/12/03, effective 7/13/03. Statutory Authority:
RCW
74.08.090,
74.09.730 and
42 U.S.C.
1396r-4. 99-14-040, § 388-550-4900,
filed 6/30/99, effective 7/1/99. Statutory Authority:
RCW
74.08.090,
74.09.730,
74.04.050,
70.01.010,
74.09.200,[74.09.]500 ,
[74.09.]530 and 43.20B.020. 98-01-124, § 388-550-4900, filed 12/18/97,
effective 1/18/98.
