DSH payments get boost

Hospitals can look forward to millions of dollars in extra Medicare revenue thanks to rulings from four courts and a policy reversal by the Health Care Financing Administration (HCFA).

The agency has agreed to count all inpatient hospital days by Medicaid recipients even those not paid for in calculating disproportionate share hospital (DSH) allocations. The DSH is a formula used to compensate hospitals that provide care for large numbers of low income people.

Previously, HCFA disallowed days spent in a hospital that were not compensated by Medicaid, but legal challenges resulted in four separate court rulings against the agency’s policy. HCFA agreed to change the policy in late March.

However, the new policy will be in effect only for cost reporting periods on or later than Feb. 22. The agency said it would not reopen closed reports solely because of the new policy.