KHA Obtains Important Favorable Changes to Medicaid DSH Regulation
Wednesday, March 20, 2019 11:01 AM
The Department for Medicaid Services (DMS) responded to the comments
submitted by KHA on proposed changes to the regulation governing hospital
disproportionate share distributions, and they have agreed to revise the
regulation in the most critical areas as recommended by KHA .
Specifically, and most importantly, the proposed rule would have denied a
hospital from receiving a final DSH payment if that hospital failed to
submit an updated DSH survey. KHA took issue with this proposal since there
is no statutory authority to eliminate a DSH payment so long as the
hospital has submitted a DSH survey. The only statutory penalty is a
reduction of 20% in the amount of the final payment if the survey is
submitted late. KHA also commented that resubmission of an original DSH
survey would be burdensome if there were no changes. KHA is pleased that
DMS agreed to amend the regulation to (1) delete its proposal to suspend or
recoup a DSH payment if a DSH survey was not updated and (2) allow a
hospital to attest to the accuracy of its original DSH survey rather than
In addition, KHA requested changes to assure that
hospitals would have the opportunity to appeal their final DSH payment
prior to the department taking recoupment action, and DMS also agreed to
make that change.
DMS did not alter its proposed language which grants authority to the
department to make adjustments to a hospital’s uncompensated care data
which KHA argued should be limited to correcting inaccurate or incomplete
data. The department indicated there could be a need to adjust a hospital’s
total uncompensated care cost to prevent an inappropriate distribution and
that such changes fell within its authority of adjusting inaccurate or
KHA sent a copy of the revised regulation, as amended, along with the statement of
consideration, to hospital chief financial officers yesterday.
This regulation will be reviewed by the Administrative Regulation Review
Subcommittee in April and will not take effect until May.