FFY 2023 IPPS Final Rule: Uncompensated Care (UC) DSH
CMS proposes to decrease Medicare UC DSH payments by -$221 million, to $7.0 billion in FFY 2023. FFY 2023 UC DSH payments in the Final Rule are $341 million greater than UC DSH payments in the Proposed Rule. This increase is largely attributed to CMS’s estimate of (increased) projected Medicare FFS discharges in 2023.
CMS finalizes a significant change in FFY 2023, applying an average UC cost from FFY 2018 and FFY 20191 to determine each DSH hospital’s UC DSH payment (“Factor 3”). For FFY 2024 and forward, CMS will use a three-year average of UC cost (i.e., FFY 2018, FFY 2019 and FFY 2020) to determine each DSH hospital’s Factor 3.
Hospitals have until August 19 to submit comments on the accuracy of the table and supplemental data file published in conjunction with the FFY 2023 Final Rule. Please see CMS’s file entitled “FY 2023 IPPS Final Rule: Medicare DSH Supplemental Data File (ZIP)” at CMS’s FFY 2023 Final Rule website. Providers may contact CMS at Section3133DSH@cms.hhs.gov to request corrections.
CMS also finalizes a separate $96 million Supplemental UC DSH fund for Indian Health Service (IHS)/Tribal and Puerto Rico hospitals in FFY 2023. CMS will no longer use low-income days as the Factor 3 proxy for these DSH hospitals. In FFY 2023 IHS/Tribal and Puerto Rico hospitals receive FFY 2023 Supplemental UC DSH payments using FFY 2022 UC DSH payments adjusted by “one plus the percent change” in total uncompensated care.
Table 4: Trend of National UC DSH Funding
For more information, please contact Fred Fisher at (925) 685-9312 or fred.fisher@toyonassociates.com.
1 If a hospital does not have data for combined years, CMS determines Factor 3 based on an average of the hospital’s available data.