FFY 2024 IPPS Final Rule: Uncompensated Care (UC) DSH
CMS finalized a decrease in Medicare UC DSH payments by -$950 million, to $6.0 billion in FFY 2024. In FFY 2024, providers will receive a UC DSH payment representing 17.5% of UC Costs, whereby in FFY 2023 providers received 20.2% of UC Costs. CMS is also now using a three-year average of UC cost (i.e., FFY 2018, FFY 2019 and FFY 2020) to determine each DSH hospital’s portion of the fund (i.e., Factor 3).
The $950 million decrease in UC DSH payments is primarily due to CMS’s updated estimation of the uninsured rate in FFY 2024 (i.e., “Factor 2”). The Factor 2 adjustment decreases national UC DSH funding by the change in the uninsured rate since the implementation of the ACA. CMS applied updated estimates from the Office of the Actuary (OACT) data on National Health Expenditure Accounts (NHEA) projecting 8.3% of individuals as uninsured in FFY 2024. In FFY 2023, OACT projected 9.2% individuals as uninsured. The difference between the FFY 2024 uninsured rate of 8.3% and the FFY 2023 uninsured rate of 9.2% is the primary reason UC DSH payments were reduced by $950 million in the FFY 2024 Final Rule.
Table 3: Trend of National UCD DSH Funding
For more information, please contact Fred Fisher at fred.fisher@toyonassociates.com.