Bass, Berry & Sims attorney Leslie Goldsmith provided insight for a recent Modern Healthcare article examining a federal court decision vacating a 2023 Medicare disproportionate-share hospital (DSH) payment rule that excluded certain uncompensated care pool patients from DSH reimbursement calculations. The ruling could result in millions of dollars in additional Medicare payments for safety-net hospitals and may also help some providers maintain eligibility for the 340B Drug Pricing Program.
The decision from the U.S. District Court for the Northern District of Texas restores hospitals’ ability to count patients covered through certain Medicaid uncompensated care funding pools when calculating Medicare DSH payments. Because DSH reimbursement is tied in part to a hospital’s treatment of low-income patients, the ruling could significantly increase reimbursement for providers in states that utilize Section 1115 uncompensated care programs, particularly Texas and Florida.
Leslie noted that providers may begin evaluating whether they can revise reimbursement claims affected by the now-vacated rule. “Providers will jump on this,” she said. “It is a very good decision for them.” She also explained that hospitals with unsettled reimbursement disputes may be able to amend cost reports and include additional Medicaid patients in their DSH calculations.
Leslie further observed that the ruling’s long-term impact will depend on how the Centers for Medicare & Medicaid Services (CMS) responds. According to the article, the agency could appeal the decision or pursue a new rulemaking approach that aligns with the court’s findings. As hospitals assess the potential financial benefits of the ruling, providers will be closely monitoring next steps from CMS and evaluating opportunities to maximize available reimbursement.
The full article, “Hospitals may get millions after Medicare DSH ruling,” was published August 5 by Modern Healthcare and is available online (subscription required).