(Medicare Claims Processing Manual)

20.3.1.3  Disproportionate Share Hospital (DSH) Policy Changes Effective for Cost Reporting Periods beginning on or after October 1, 2009  (Rev. 2627, Issued 01- 04-13, Effective 10- 01-12, Implementation 10- 01-12)  Observation Days   For cost reporting periods beginning on or after October 1, 2009, observation days for patients later admitted as an inpatient will no longer be included in the Medicare disproportionate patient percentage (DPP). In addition, observation bed days for patients later admitted as an inpatient will no longer be counted towards a hospitals available bed day count for DSH and IME. Between October 1, 2003, and October 1, 2009, hospitals had reported on their cost report the Medicaid observation patient days for admitted p atients and total observation patient days for admitted patients for inclusion in the Medicaid fraction of the Medicare DPP, and for the determination of the available bed day count for DSH and IME. However, effective for cost reporting periods beginning on or after October 1, 2009, observation patient days are no longer included in the DPP, and observation bed days will no longer be counted towards the available bed day count for DSH or IME.   Labor and Delivery Patient Days   For cost reporting periods beginning on or after October 1, 2009, we will include in the Medicare disproportionate patient percentage (DPP) patient days associated with maternity patients who were admitted as inpatients and were receiving ancillary labor a nd delivery services at the time the inpatient routine census is taken, regardless of whether the patient occupied a routine bed prior to occupying an ancillary labor and delivery bed and regardless of whether the patient occupies a maternity suite in which labor, delivery, recovery and postpartum care all take place in the same room. Prior to October 1, 2009, patient days associated with beds used for ancillary labor and deliver were not counted in the DPP. However, for cost reporting periods beginning on or after October 1, 2009, but before cost reporting periods beginning on or after October 1, 2012 , if a patient, admitted to the hospital as an inpatient, occupies an ancillary bed for labor and delivery, the patient days associated with the ancillary labor/delivery services will be counted in the DPP. For cost reporting periods beginning on or after October 1, 2009 but before cost reporting periods beginning on or after October 1, 2012,  this policy applies only to counting patient days, and does not change the policy of determining the number of available beds in 42 CFR 412.106(a). Beds associated with ancillary labor/delivery services are not included in the available bed day count.   Reporting Inpatient Days in the Numerator of the Medicaid Fraction   Hospitals can report days in the numerator of the Medicaid fraction by one of three methodologies. For cost reporting periods beginning on or after October 1, 2009, hospitals can report Medicaid- eligible days based on date of discharge, date of admission, or dates of service. A hospital is required to notify CMS (through the fiscal intermediary or MAC) in writing if the hospital chooses to change its methodology of counting days in the numerator of the Medicaid fraction. The written notification should be s ubmitted at least 30 days prior to the beginning of the cost reporting period to which the change would apply. The written notification must specify the changed methodology the hospital wishes to use and the cost reporting period for which the methodology would apply. The change in methodology would be effective on the first day of the specified cost reporting period for the entire cost reporting period. The change would be effective for all future cost reporting periods unless the hospital submits a subseq uent written notification to change its methodology.  20.3.1.4  Disproportionate Share Hospital (DSH) Policy Changes Effective for Cost Reporting Periods beginning on or after October 1, 2012  (Rev. 2627, Issued 01- 04-13, Effective 10- 01-12, Implementation 10- 01-12)  Labor and Delivery Bed Days   Effective for cost reporting periods beginning on or after October 1, 2012, we will include bed days associated with ancillary labor/delivery services to determine the number of beds in 42CFR412.105(b), which is cross -referenced in 42 CFR412.106(a)(1)(i) for the purpose s of determining the DSH payment adjustment. Bed days associated with ancillary labor/delivery services will be included to determine the number of beds for DSH and IME.  For cost reporting periods beginning before October 1, 2012, bed days associated with ancillary labor and delivery services were not counted in the available bed day count for DSH and IME.   20.3.2 - Updates to the Federal Fiscal Year (FY) 2001  (Rev. 1, 10- 01-03) PM A -01-47  20.3.2.1 - Inpatient Hospital Payments and Disproportionate Share Hospital (DSH) Thresholds and Adjustments  (Rev. 1, 10- 01-03)  The new FY 2001 operating standardized amounts are effective April 1, 2001, as required by 301 of BIPA 2000 (P.L. 106- 554), and the new DSH thresholds and adjustments are required by 211 of BIPA 2000.  In conjunction with the new standardized amount, the new capital rates and outlier adjustment factor thresholds are effective April 1, 2001.  The following standardized amounts effective for discharges occurring on or after April 1, 2001, and before October 1, 2001, are:   Final FY 2001 Operating Rates   Designation  Large Urban Areas  Large Urban Areas  Other Areas  Other Areas   Labor - Related  Nonlabor -Related  Labor - Related  Nonlabor -Related  +National   $2,925.82   $1,189.26   $2,879.51   $1,170.43  National PR   $2,900.64   $1,179.02   $2,900.64   $1,179.02  Puerto Rico   $1,402.79   $564.66   $1,380.58   $555.72  SCHs   $2,895.02   $1,176.74   $2,849.20   $ 1,158.11   Final FY 2001 Capital Rates   National  $380.85  Puerto Rico  $184.61   Due to the changes to the standardized amounts, CMS recalculated the fixed loss cost outlier threshold applicable for discharges on or after April 1, 2001, and before October 1, 2001.  The new thresholds are equal to the prospective payment rate for the DRG plus the IME and DSH payments plus $16,350 ($14,940 for hospitals that have not yet entered the prospective payment system for capital -related costs).   In addition, 211 of BIPA 2000 revised the thresholds by which certain classes of hospitals qualify for the disproportionate share adjustment, effective for discharges occurring on or after April 1, 2001.  Section 211 also revised the adjustment computatio ns for these hospitals.  The specific changes are identified below.    Hospital Type  Qualifying DSH Percent  Adjustment Computation  Urban Hospitals    0-99 Beds  15%, <19.3%  19.3%  2.5% + [.65 x (DSH pct. -15)] 5.25%  100+ Beds (No Change in Law)  15%,<20.2%  20.2%  2.5% + [.65 x (DSH pct. -15%)]  5.88% + [.825 x (DSH pct. -20.2%)]  Rural Hospitals    Sole Community Hospitals (SCH)  15%, <19.3%  19.3%,<30%  30%  2.5% + [.65 x (DSH pct. -15%)]  5.25%  10% Rural Referral Centers (RRC)  15%,<19.3%  19.3%,<30%  30%  2.5% + [.65 x (DSH pct. -15%)]  5.25%  5.25% + [.6 x (DSH pct.-30%)]  Both SCH and RRC  15%  higher of SCH or RRC adjustment  Other Rural Hospitals    0-499Beds  15%,<19.3%  19.3%  2.5% + [.65 x (DSH pct. -15%)]  5.25%  500+ Beds (No Change in Law)  15%,<20.2%  20.2%  2.5% + [.65 x (DSH pct. -15%)]  5.88% + [.825 x (DSH pct.  - 20.2%)]   These new rates as well as changes to the DSH adjustments are incorporated into Pricer 01.2.  The formulas are spelled out in the statute.   20.3.3  Prospective Payment Changes for Fiscal Year (FY) 2003  (Rev. 1, 10- 01-03) A-02-084  The PPS changes for FY2003 were published in the Federal Register on August 1, 2002.  All changes are effective for hospital discharges occurring on or after October 1, 2002, unless otherwise noted.   ICD-9-CM coding changes are effective October 1, 2002. The new ICD -9-CM codes are listed, along with their diagnosis -related group (DRG) classifications in Tables 6a and 6b in the final rule for PPS changes for FY 2003. The ICD -9-CM codes that have been replaced by expanded codes or other codes, or have been deleted are included in Tables 6c and 6d. The revised code titles are in Tables 6e and 6f of the same final rule. GROUPER 20.0 assigns each case into a DRG on the basis of the diagnosis and procedure codes and demographic information (that is age, sex, and discharge status) and is effective with discharges occurring on or after October 1, 2002. Medicare Code Editor (MCE) 19.0 and Outpatient Code Editor (OCE) versions 18.0 and 3.20 use the new ICD -9-CM co des to validate coding for discharges and outpatient services effective October 1, 2002.   Additional changes for FY 2003 are:    The standardized amount update factor is 2.95 percent for all hospitals.   The hospital specific update factor is 2.95 percent for all hospitals.   The common fixed loss cost outlier threshold in FY 2003 is equal to the PPS rate for the DRG, Indirect Medical Education (IME), and Disproportionate Share Hospital (DSH) plus $33,560.   The marginal cost factor for cost outliers remains 80 percent.    The 2003 Federal capital rate is $407.01 and the Puerto Rico capital rate is $198.29.   The FY 2003 outlier adjustment factor is 0.948999 for the operating standardized amount.    The FY 2003 outlier adjustment factor for Puerto Rico is 0.981651 for the operating standardized amount. Also new for FY 03, there is an outlier adjustment factor of 0.965325 for operating national/Puerto Rican blend.   Payments under the DSH provision are not reduced in FY 2003.    The IME formula is 1.35*[(1+ resident -to-bed ratio)**. 405- 1] for FY 2003.   The revised hospital wage indexes and geographic adjustment factors are contained in Tables 4a (urban areas), 4b (rural areas) and 4c (redesignated hospitals) of section VI of the addendum to the PPS final rule.    Grouper 20.0 and MCE 19.0 for discharges occurring on or after October 1, 2002 replace earlier versions of the software.   See Addendum : Hospital Reclassifications and Redesignations by Individual Hospital -  FY2003.   20.3.4  Prospective Payment Changes for Fiscal Year (FY) 2004 and Beyond  (Rev. 3431, Issued: 12- 29-15, Effective: 10 -01-15, Implementation: 10- 05-15)  The IPPS changes for FY 2004 were published in the Federal Register on August 1, 2003.  All changes are effective for hospital discharges occurring on or after October 1, 2003.  Additional changes were listed in a Correction Notice to the Federal Register on October 6, 2003, and a One Time Notification (Pub. 100- 20, Transmittal 16, published on October 31, 2003).