The Medicare DSH Adjustment (42 CFR 412.106)

The Medicare DSH adjustment provision under section 1886(d) (5) (F) of the Act was enacted by section 9105 of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 and became effective for discharges occurring on or after May 1, 1986. According to section 1886(d) (5) (F) of the Act, there are two methods for a hospital to qualify for the Medicare DSH adjustment. The primary method is for a hospital to qualify based on a complex statutory formula that results in the DSH patient percentage. The DSH patient percentage is equal to the sum of the percentage of Medicare inpatient days attributable to patients eligible for both Medicare Part A and Supplemental Security Income (SSI), and the percentage of total inpatient days attributable to patients eligible for Medicaid by not Medicare Part A. The DSH patients percentage is defined as:

DSH Patient Percent = (Medicare SSI Days / Total Medicare Days) + (Medicaid, Non-Medicare Days / Total Patient Days)

The alternate special exception method is for large urban hospitals that can demonstrate that more than 30 percent of their total net inpatient care revenues come from State and local governments for indigent care (other than Medicare or Medicaid).

Under the primary method to qualify for DSH adjustments, the first computation includes the number of hospital patient days used by patients who, for those days, were entitled to both Medicare Part A and SSI (excluding State supplementation). This number is divided by the number of patient days used by patients under Medicare Part A for that same period. The second computation includes hospital patient days used by patients who, for those days, were eligible for medical assistance under a state plan approved under title XIX (Medicaid), but who were not entitled to Medicare Part A. This number is divided by the total number of hospital patient days for that same period.

Hospitals whose DSH patient percentage exceeds 15 percent are eligible for a DSH payment adjustment based on another statutory formula. The formula varies for urban hospitals with 100 or more beds and rural hospitals with 500 or more beds, hospital that qualify as rural referral centers or sole community hospitals, and other hospitals.

Note to Providers:

CMS is currently in the process of reviewing the FY 2006 SSI ratios. Since the FY 2006 SSI ratios are currently under review, as of May 5, 2008, a hospital may elect to use either its FY 2005 or its FY 2006 SSI ratio from the files published below for submission of its cost report that would otherwise be submitted with the FY 2006 SSI ratio. While a hospital has the option of submitting its cost report using either its FY 2005 or FY 2006 SSI ratio, once CMS has completed its review of the FY 2006 SSI ratios, such cost reports will be settled using the appropriate SSI ratios. This option does not affect future cost reporting periods and SSI ratios (i.e, once the FY 2007 SSI ratios are published on this website, a hospital must use its FY 2007 SSI ratio for applicable cost reporting periods). If a hospital has already submitted its cost report using its FY 2006 ratio and would like to use its FY 2005 SSI ratio instead, it should contact its Fiscal Intermediary or Medicare Administrative Contractor.

Downloads
DSH Adjustment and 2005-2006 File [ZIP, 76KB] DSH Adjustment and 2004-2005 File [Excel file zipped 228KB] - updated 9/3/08 DSH Adjustment and 2003-2004 File [Excel file zipped 198KB] DSH Adjustment and 2002-2003 File [Excel and txt file zipped 300KB] DSH Adjustment and 2001-2002 File [Excel and txt file zipped 311KB] DSH Adjustment and 2000-2001 File [Txt file zipped 218KB]
Related Links Inside CMS
Clarification of Allowable Medicaid Days in the Medicare Disproportionate Share Hospital (DSH) Adjustment Calculation (PM A-01-13)
Related Links Outside CMS
There are no Related Links Outside CMS

Page Last Modified: 09/03/2008 3:09:19 PM
Help with File Formats and Plug-Ins