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016.06.20-250.450. Limitations to Disproportionate Share Payments.

AR ADC 016.06.20-250.450Arkansas Administrative Code

West's Arkansas Administrative Code
Title 016. Department of Human Services
Division 06. Division of Medical Services
Rule 20. Hospital/Critical Access Hospital (CAH)/End-Stage Renal Disease (ESRD) Provider Manual (Refs & Annos)
Section 250.000. Reimbursement.
Ark. Admin. Code 016.06.20-250.450
016.06.20-250.450. Limitations to Disproportionate Share Payments.
Currentness
A. Section 1923(c)(1) of the Social Security Act--with additional clarification at Section 1923 (g)(1) of the Act--imposes a limit on individual DSH payments. Application of this limitation may result in retrospective adjustments to some DSH payments.
B. The DSH payment to a hospital during a given state fiscal year (SFY) must not exceed the hospital's costs for uncompensated care during the SFY in which the DSH payment is made.
1. The “uncompensated care” costs that constitute the DSH payment limit are determined by means of the formula and instructions to follow.
2. The uncompensated care costs comprise two sets of costs.
a. The first set of costs is the Medicaid “shortfall.”
1.) The shortfall is the cost of services furnished to Medicaid patients, less the amount Medicaid has paid for services under the state plan.
2.) Disproportionate share payments are not included in the amount Medicaid has paid.
b. The second set of costs is:
1.) The cost of services provided to uninsured patients during the year, less
2.) The total of payments made by or on behalf of those patients.
3.) The cost of services to “uninsured” patients includes the cost of services not covered by individual insurance policies or plans.
3. Calculation of the limit is as follows: Individual Hospital Disproportionate Share Payment Limit = M + U
a. M = Cost of services to Medicaid patients, less the amount paid by the state under the non-disproportionate share payment provisions of the state plan.
b. U = Cost of services to uninsured patients, less any cash payments made by them or in their behalf. (Includes cost of services to patients who have insurance that does not cover the service(s) they received.)
C. Example:
1. Hospital I reports costs of $ 3,643,912.00 for services furnished to Medicaid patients during the cost reporting period ending June 30, 2003.
2. Arkansas Medicaid has calculated a total reimbursement amount of $ 3,211,437.00 for the hospital's 2003 fiscal year, which runs exactly parallel to the Arkansas state fiscal year (SFY).
Cost of Services to Medicaid Patients =
$ 3,643,912.00
Less Medicaid Payment
3,211,437.00
M
$ 432,475.00
=
Cost of services to uninsured patients =
$ 800,311.00
Less payments by uninsured patients
106.00
U
$ 800,205.00
=
M
$ 432,475.00
+ U
+ 800,205.00
Disproportionate Share Payment Limit
$ 1,232,680.00
3. Hospital I's disproportionate share payment in SFY 2003 may not exceed $ 1,232,680.00.
4. If Arkansas Medicaid should determine later that the DSH amount initially paid to Hospital I during SFY 2003 exceeded $ 1,232,680.00, Hospital I must refund the amount in excess.
5. When a hospital's fiscal year does not run parallel to, but instead overlaps the SFY, final determination of the hospital's uncompensated costs during a given SFY must be made using portions of two cost reports.
D. In any given state fiscal year, if the total of a state's disproportionate share payments due should exceed the amount of the state's federal allotment (plus the corresponding state matching funds), the state Medicaid agency will proportionately reduce the amount of each payment until the sum of the payments equals the amount in the disproportionate share pool.

Credits

Eff. Oct. 13, 2003.
<Editor’s Note: Nonfunctioning links so in original.>
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 016.06.20-250.450, AR ADC 016.06.20-250.450
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