New Jersey Administrative Code › Title 10 - HUMAN SERVICES › Chapter 52 - HOSPITAL SERVICES MANUAL › Subchapter 13 - ELIGIBILITY FOR AND BASIS OF PAYMENT FOR DISPROPORTIONATE SHARE HOSPITALS › Section 10:52-13.7 - Calculation and distribution of disproportionate share hospital (DSH) payments as a result of a hospital closure; purpose, and procedure

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The purpose of this rule is to provide a procedure to redistribute disproportionate share hospital (DSH) payments to provide for the patients who would have been served by a closed general hospital, had the hospital remained open. Hospital closure is defined as cessation of operations as a general hospital facility. When a hospital closes, DSH payments to the closed hospital will immediately cease. The DSH payments that would have gone to that hospital, had that hospital not closed, shall be reallocated and distributed to eligible hospitals, in accordance with Federal and State laws, rules and regulations. The eligible hospitals that are serving or are expected to serve the patients who would have gone to the closed hospital will receive the closed hospital's remaining allocation for the State fiscal year in which the hospital closed. This rule shall be applied to specify the eligible hospitals and the calculation and distribution of the closed hospital's DSH payments. Subsections (b), (c) and (d) below address the charity care subsidy allocated pursuant to N.J.S.A. 26:2H-18.5 9(e), and any supplemental charity care subsidy allocated pursuant to any appropriations act that may provide for supplemental charity care subsidies; subsection (e) below addresses the Hospital Relief Subsidy Fund.
(b) To be eligible for a portion of the closed hospital's charity care allocation and/or supplemental charity care allocation, a hospital shall satisfy all three of the following criteria:
1. The hospital shall have received a charity care subsidy allocation, under the methodology set forth in N.J.S.A. 26:2H-18.5 9e, and/or a supplemental charity care subsidy allocation, under the methodology set forth in any appropriations act that may provide for supplemental charity care subsidies, during the State Fiscal Year in which the closed hospital ceased operations as a general hospital;
2. The hospital shall draw its patients from the same market area, identified by United States Postal Service zip codes, which the closed hospital served. The market area served by the closed hospital shall be determined, based on the most recent available complete calendar year UB data maintained by the Department of Health, as follows:
i. Rank zip codes from highest to lowest, based on the percentage of total admissions drawn from each zip code by the closed hospital; and
ii. Include the ranked zip codes in the closed hospital's market area (beginning with the highest-ranked zip code) until the percentage of admissions, when added together, constitutes 75 percent of the closed hospital's total admissions; and
3. The hospital shall demonstrate that it has a market share of 25 percent or more of admissions from the market area that the closed hospital served, as defined in (b)2 above. This determination shall likewise be made based on the most recent available complete calendar year UB data maintained by DOH, but the closed hospital's UB data will not be included in making this determination.