AHA recommends CMS withdraw proposed rule on Medicaid DSH calculation

The AHA today asked the Centers for Medicare & Medicaid Services to withdraw a proposed rule addressing how third-party payments are treated when calculating the hospital-specific limitation on Medicaid disproportionate share hospital payments. “CMS has characterized that this rule is interpretive and a clarification of existing policy,” AHA Executive Vice President Tom Nickels said in comment letter on the proposed rule. “But, in reality, the rule is substantive and establishes new policy, specifically with the intent of avoiding potentially unfavorable federal district court rulings. There are legal challenges, in two different federal district courts, that are in the final stages of deliberations. These challenges focus on CMS’s use of sub-regulatory guidance to advance its interpretation of the Medicaid statute pertaining to the treatment of third-party payment for purposes of calculating a hospital’s Medicaid DSH limit. The AHA supports the plaintiffs’ arguments in these cases and believes that CMS’s proposed rule, with a mere 30-day comment period, only creates more chaos and uncertainty for Medicaid DSH hospitals in the face of these pending court decisions.”