Patient Protection Affordable Care Act of 2010
The Patient Protection and Affordable Care Act (PPCA) aims to reduce: * Funding for the Medicaid DSH program by $17.1 billion between 2014 and 2020; * Aggregate Medicaid DSH allotments by $0.5 billion in 2014, $0.6 billion in 2015, $0.6 billion in 2016, $1.8 billion in 2017, $5 billion in 2018, $5.6 billion in 2019, and $4 billion in 2020; and * Medicare DSH payments initially by 75 percent and subsequently increase payments based on the percent of the population uninsured and the amount of uncompensated care provided. requires theQualifying
A hospital can qualify for the Medicare DSH adjustment by using one of the following methods: ; Primary method : The primary method is based on a complex statutory formula that results in the Medicare DSH patient percentage, which is equal to the sum of the percentage of Medicare inpatient days attributable to patients entitled to both Medicare Part A and Supplemental Security Income and the percentage of total inpatient days attributable to patients eligible for Medicaid but not eligible for Medicare Part A. : In order to maximize their reimbursement, many hospitals and/or their consultants will use Medicaid eligibility vendors to assist in the identification of Medicaid eligible days. ; Alternate Special Exemption Method : The alternate special exception method is for urban hospitals with more than 100 hospital beds that can demonstrate that more than 30 percent of their total net inpatient care revenues, other than Medicare or Medicaid, come from state and local government sources for indigent care, such as for medically indigent adults. ; Number of Beds in Hospital Determination : Number of inpatient care bed days attributable to units or wards generally payable under the Inpatient Prospective Payment System excluding beds otherwise countable used for outpatient observation, skilled nursing swing-bed, or ancillary labor/delivery services divided by the number of days in the cost reporting period.Mechanics of the DSH adjustment
The formulas to establish a hospital's Medicare DSH payment adjustment are based on the following: hospital's location; number of beds; and status as a Rural Referral Centers, Medicare-Dependent Hospitals, or sole community provider. The value of the hospital's DSH "index" determines the hospital's eligibility for a DSH payment and the size of the payment. The index, whose definition has not changed since the original legislation, is the sum of two ratios: the proportion of all Medicare days that are attributable to beneficiaries of Supplemental Security Income, a means-tested cash benefit program for aged and disabled people, and the proportion of all patient days for which Medicaid is the primary payer.History and reforms
In 1989, some enterprising state budget experts discovered that they could claim federal DSH funds without expending general state funds and use the DSH payment as a mechanism for mitigating hospitals’ financial distress. To earn the match, however, the state had to spend the tax or donation revenues, because the federal Medicaid match is based on expenditures, not revenues. The Medicaid DSH payment provided the mechanism to spend these revenues. The DSH payment was singled out because it was not subject to the Medicare upper payment limit. Thus, states could make virtually unlimited DSH payments and, in the process, earn federal matching dollars. As such the hospitals that were slated to receive DSH funds were asked to contribute the required state share; the state would then use this money to draw down a large federal matching payment. The hospitals would get their contributions back and perhaps a bit more, but the states often kept the lion's share of the federal payment. With the DSH system effectively serving as a money pump that pulled federal funds into state coffers, the program experienced explosive growth. Between 1990 and 1996, federal DSH payments ballooned from $1.4 billion to more than $15 billion annually. In 1991, Congress sought to restrict states' ability to tap provider funds in order to claim federal matching funds by enacting the Voluntary Contribution and Provider-Specific Tax Amendments of 1991 (). Key provisions included (1) essentially banning provider donations; (2) limiting provider taxes so that provider tax revenues could not exceed 25 percent of the state's share of Medicaid expenditures; (3) imposing provider tax criteria so that taxes were "broad based" and providers were not "held harmless"; and (4) capping state DSH payments at roughly 1992 levels. This law also capped the amount a state could spend on DSH payments, but it did little to slow recycling. Congress responded inReferences
External links
* {{cite web , publisher=United States Office of the Legislative Counsel , date=May 2010 , title=Compilation of Patient Protection and Affordable Care Act , accessdate=October 6, 2011 , url=http://burgess.house.gov/UploadedFiles/hr3590_health_care_law_2010.pdf As amended throughout May 1, 2010. Including Patient Protection and Affordable Care Act of 2010; May 2010 Report. Medicare and Medicaid (United States)