Medicare Claims Processing Manual

Included Days

In calculating the number of Medicaid days, the hospital must determine whether the patient was eligible for Medicaid under a State plan approved under Title XIX on the day of service. If the patient was so eligible, the day counts in the Medicare disproportionate share adjustment calculation. The statutory formula for "Medicaid days" reflects several key concepts. First, the focus is on the patient's eligibility for Medicaid benefits as determined by the State, not the hospital's "eligibility" for some form of Medicaid payment. Second, the focus is on the patient's eligibility for medical assistance under an approved Title XIX State plan, not the patient's eligibility for general assistance under a State-only program. Third, the focus is on eligibility for medical assistance under an approved Title XIX State plan, not medical assistance under a State-only program or other program. Thus, for a day to be counted, the patient must be eligible on that day for medical assistance benefits under the Federal-State cooperative program known as Medicaid (under an approved Title XIX State plan). In other words, for purposes of the Medicare disproportionate share adjustment calculation, the term "Medicaid days" refers to days on which the patient is eligible for medical assistance benefits under an approved Title XIX State plan. The term "Medicaid days" does not refer to all days that have some relation to the Medicaid program, through a matching payment or otherwise; if a patient is not eligible for medical assistance benefits under an approved Title XIX State plan, the patient day cannot become a "Medicaid day" simply by virtue of some other association with the Medicaid program.

Medicaid days, for purposes of the Medicare disproportionate share adjustment calculation, include all days during which a patient is eligible, under a State plan approved under Title XIX, for Medicaid benefits, even if Medicaid did not make payment for any services. Thus, Medicaid days include, but are not limited to, days that are determined to be medically necessary but for which payment is denied by Medicaid because the provider did not bill timely, days that are beyond the number of days for which a State will pay, days that are utilized by a Medicaid beneficiary prior to an admission approval but for which a valid enrollment is determined within the prescribed period, and days for which payment is made by a third party. In addition, we recognize in the calculation days that are utilized by a Medicaid beneficiary who is eligible for Medicaid under a State plan approved under Title XIX through a managed care organization (MCO) or health maintenance organization (HMO). However, in accordance with 42 CFR 412.106(b)(4), a day does not count in the Medicare disproportionate share adjustment calculation if the patient was entitled to both Medicare Part A and Medicaid on that day. Therefore, once the eligibility of the patient for Medicaid under a State plan approved under Title XIX has been verified, the A/B MAC (A) must determine whether any of the days are dual  entitlement days and, to the extent that they are, subtract them from the other days in the calculation.

DSH Exception

The A/B MAC (A) shall review the documentation submitted in support of the provider's request for a disproportionate share adjustment under 42 CFR 412.106(c)(2) of the regulations. Beginning with Federal Fiscal Year (FY) 2011 A/B MACs (A) shall submit to CMS annually by February 28 documentation for the hospitals they determine meet the qualifying standards for receiving disproportionate share hospital (DSH) payments under section 42 CFR 412.106(c)(2). This review can be accomplished in conjunction with the audit/settlement of the cost report for the period subject to the adjustment. At a minimum, the A/B MAC (A) shall:

• Verify total inpatient revenues;

• Verify that State and local government appropriations on the financial statements are consistent with amounts contained in governmental appropriations bills; 

• Review, on the basis of a sample of cases, the provider's implementation of procedures for identifying indigent patients. Ensure that amounts for "indigent" patients do not include charges associated with:

° Titles XIX and XVIII patient care;

° Hill-Burton care; 

° Free care to employees; and 

° Bad debts for patients who are not indigent

Reporting for PS&R and CWF

The A/B MAC (A) 's PPS Pricer identifies the amount of the DSH adjustment on each bill. The A/B MAC (A) reports this amount with value code 18 to its PS&R, and to CWF.

Clarification of Allowable Medicaid Days in the Medicare Disproportionate Share Hospital (DSH) Adjustment Calculation (Rev. 1, 10-01-03)

20.3.1.1 - Clarification for Cost Reporting Periods Beginning On or After January 1, 2000 (Rev. 1, 10-01-03)

PM A-01-03

Under §1886(d)(5)(F) of the Social Security Act (the Act), the Medicare disproportionate share patient percentage is made up of two computations. The first computation includes patient days that were furnished to patients who, during a given month, were entitled to both Medicare Part A and Supplemental Security Income (SSI) (excluding State  supplementation). This number is divided by the number of covered patient days utilized by patients under Medicare Part A for that same period. The second computation includes patient days associated with beneficiaries who were eligible for medical assistance (Medicaid) under a State plan approved under Title XIX but who were not entitled to Medicare Part A. This number is divided by the total number of patient days for that same period.

EXAMPLES

Hospital A is an urban hospital with 200 beds and has a DSH percentage of 21 percent. Its December 1990 DSH payment factor is computed:

(21 - 20.2) (.65) + 5.62 = 6.14% 

DSH adjustment factor = 6.14% (.0614)

Hospital B is an urban hospital with 250 beds and has a DSH percentage of 45 percent. Its December 1990 DSH payment adjustment factor is computed:

(45 - 20.2) (.65) + 5.62% = 21.74% 

DSH adjustment factor = 21.74% (.2174)

Urban hospitals with 100 or more beds and rural hospitals with 500 or more beds whose DSH percentage is equal to or less than 20.2 - the following formula is used:

(DSH % - 15) (.6) + 2.5

• Urban hospitals with fewer than 100 beds - 5 percent. 

• Rural hospitals that are RRCs and sole community hospitals - the greater of 10 percent or the percentage determined using the following formula:

(DSH % - 30) (.6) + 4.0

Hospital C is a rural hospital that is an RRC and a sole community hospital, and has a DSH percentage of 35 percent. Its DSH payment factor is computed:

(35 - 30) (.6) + 4.0 = 7%

DSH adjustment factor = 10% (.1000)

Hospital D is a rural hospital which is a RRC and a sole community hospital. It has a DSH percentage of 45 percent. Its DSH payment factor is computed:

(45 - 30) (.6) + 4.0 = 13%

DSH adjustment factor is 13% (.1300)

• Rural hospitals that are RRCs, but are not sole community hospitals-the following formula is used:

(DSH % - 30) (.6) + 4.0

• Rural hospitals that are sole community hospitals, but are not RRCs - 10 percent.

• Rural hospitals not described above with 100 beds or less - 4 percent if DSH percentage is 45 percent or more.

• Rural hospitals not described above with more than 100 beds but fewer than 500 beds - 4 percent if DSH percentage is 30 percent or more.

• Urban hospitals with 100 or more beds whose DSH percentage is less than or equal to 20.2 - the following formula is used:

(DSH % - 15) (.6) + 2.5

For the period October 1, 1993, through September 30, 1994:

• Urban hospitals with 100 or more beds whose DSH percentage is greater than 20.2-the following formula is used:

(DSH % - 20.2) (.8) + 5.88

• Urban hospitals with 100 or more beds whose DSH percentage is less than or equal to 20.2 - the following formula is used:

(DSH % - 15) (.6) + 2.5

• Rural hospitals that are RRCs and sole community hospitals - the greater of 10 percent or the percentage determined using the following formula: 

(DSH % - 30) (.6) + 4.0

CMS Claim Forms

CMS 1500 Forms (formerly HCFA 1500 forms) and UB 04 Forms (formerly UB 92 forms)

CMS 1500 forms are the standardized medical billing forms for professional (non-institutional) medical billing of health insurance claims in the United States. The current CMS 1500 form version is 08/05, revised by the National Uniform Claim Committee (NUCC) in June 2007 to accommodate updates due to the HIPAA law. The Centers for Medicare and Medicaid Services (CMS) also called the CMS 1500 forms, the approved OMB-0938-0999 form.