DSH payments

For operating DSH payments:

For discharges between May 1, 1986, and March 31, 1990, a hospital qualifies for an operating cost DSH adjustment if it has a DSH percentage of:

• At least 15 percent for an urban hospital with 100 or more beds;

• At least 40 percent for an urban hospital with less than 100 beds; or 

• At least 45 percent for a rural hospital, with fewer than 500 beds

For discharges on and after October 1, 1986, the hospital qualifies for an operating cost DSH adjustment if it has a DSH percentage of at least 15 percent, is located in a rural area, and has 500 or more beds.

For discharges between April 1, 1990 and December 31, 1995, a hospital qualifies for an operating DSH adjustment if it has a DSH percentage of:

• At least 15 percent for an urban hospital with 100 or more beds, or a rural hospital with 500 or more beds; 

• At least 40 percent for an urban hospital with fewer than 100 beds; 

• At least 45 percent for a rural hospital with 100 beds or fewer, if it is not also classified as a sole community hospital; or 

• At least 30 percent for a rural hospital with more than 100 beds which is classified as a sole community hospital.

A hospital qualifies for a capital DSH adjustment if it is located in a large urban or other urban area, has at least 100 beds, and has a DSH percentage greater than 0.

For the DSH determination, the number of beds in a hospital is determined by counting the number of inpatient care bed days available during the cost reporting period, excluding beds assigned to newborns, custodial care, and PPS excluded distinct part hospital units, and dividing that number by the number of days in the cost reporting period. Inpatient care bed days available should be the same as Indirect Medical Education (IME) bed days. Available beds may not match the number of licensed beds.

B. - Determination of Operating DSH Adjustment Percentage

Hospitals that meet the DSH percentage criteria are entitled to adjustments to the Federal portion of their operating cost DRG payments (including the Federal portion of outlier payments) as follows. For hospitals that qualify for DSH payment, Pricer calculates the DSH adjustment percentage

Urban hospitals with 100 or more beds and rural hospitals with 500 or more beds - 

The lesser of 15 percent or the percentage determined by using the following formula:

(DSH % - 15)(.5) + 2.5