FFY 2024 IPPS Final Rule: Empirical DSH
Section 1115 Demonstration Days
CMS finalized its changes to regulations on the inclusion of certain Section 1115 demonstration days in the Medicaid fraction of the empirical DSH calculation. This will impact reporting of patient days for patients discharged on or after October 1, 2023 (FFY 2024).
Under the FFY 2024 finalized policy, allowable Section 1115 Waiver days are only for patients from the 1115 demonstration who:
Receive health insurance authorized by a section 1115 demonstration, or
Purchase health insurance with premium assistance provided to them under a section 1115 demonstration, where State expenditures to provide the health insurance or premium assistance is matched with funds from title XIX.
Section 1115 demonstration days are allowable when a patient is not entitled to Medicare Part A benefits and 1) their health insurance covers inpatient hospital services; or 2) premium assistance covers 100 percent of the premium cost to the patient, which the patient uses to buy health insurance that covers inpatient hospital services. CMS lists eight states that currently operate premium assistance programs authorized by section 1115 of the Act: Arkansas, Connecticut, Massachusetts, Oklahoma, Rhode Island, Tennessee, Utah, and Vermont.
For FFY 2024 discharges and after, CMS also finalized days are not allowed (in the Medicaid fraction of the DSH percentage) related to patients whose inpatient hospital costs are paid for with funds from an uncompensated/ undercompensated care pool authorized by a section 1115 demonstration. CMS states these patients are not ‘‘regarded as” eligible for Medicaid.
Capital DSH for Rural Reclassified Providers
Due to recent court decisions (Toledo Hospital v. Becerra, the U.S. District Court), and beginning with discharges on or after October 1, 2023 (FFY 2024), CMS finalized to reimburse hospitals with over 100 beds reclassified as rural (reclassified per 42 CFR § 412.103) capital DSH payments. Providers still must qualify for DSH to receive these payments.
For more information, please contact Dylan Chinea at dylan.chinea@toyonassociates.com.