Virginia Administrative Code › Title 12 - HEALTH › Agency 30 - DEPARTMENT OF MEDICAL ASSISTANCE SERVICES › Chapter 70 - METHODS AND STANDARDS FOR ESTABLISHING PAYMENT RATES - INPATIENT HOSPITAL SERVICES › Part V - Inpatient Hospital Payment System › Article 2 - Prospective (DRG-Based) Payment Methodology › Section 12VAC30-70-301 - Payment to disproportionate share hospitals

Current through Register Vol. 40, No. 24, July 15, 2024
A. Payments to disproportionate share
					 hospitals (DSH) shall be prospectively determined in advance of the state
					 fiscal year to which they apply. The payments shall be made on a quarterly
					 basis and shall be final subject to subsections E and K of this
					 section.
B. Effective July 1, 2014,
					 in order to qualify for DSH payments, DSH eligible hospitals shall have a total
					 Medicaid inpatient utilization rate equal to 14% or higher in the base year
					 using Medicaid days eligible for Medicare DSH defined in
					 42
					 USC §
												1396r-4(b)(2) or
					 a low income utilization rate defined in
					 42
					 USC §
												1396r-4(b)(3) in
					 excess of 25%. Eligibility for out-of-state cost reporting hospitals shall be
					 based on total Medicaid utilization or on total Medicaid neonatal intensive
					 care unit (NICU) utilization equal to 14% or higher. Effective July 1, 2018,
					 freestanding children's hospitals located in the District of Columbia shall not
					 be eligible for DSH payments.
C.
					 Effective July 1, 2014, the DSH reimbursement methodology for all hospitals
					 except Type One hospitals is the following:
1. Each hospital's DSH payment shall be equal
					 to the DSH per diem multiplied by each hospital's eligible DSH days in a base
					 year. Days reported in provider fiscal years in state fiscal year (FY) 2011
					 (available from the Medicaid cost report through the Hospital Cost Report
					 Information System (HCRIS) as of July 30, 2013) will be the base year for FY
					 2015 prospective DSH payments. DSH shall be recalculated annually with an
					 updated base year. Future base year data shall be extracted from Medicare cost
					 report summary statistics available through HCRIS as of October 1 prior to next
					 year's effective date.
2. Eligible
					 DSH days are the sum of all Medicaid inpatient acute, psychiatric, and
					 rehabilitation days above 14% for each DSH hospital subject to special rules
					 for out-of-state cost reporting hospitals. Eligible DSH days for out-of-state
					 cost reporting hospitals shall be the higher of the number of eligible days
					 based on the calculation in the first sentence of this subdivision times
					 Virginia Medicaid utilization (Virginia Medicaid days as a percent of total
					 Medicaid days) or the Medicaid NICU days above 14% times Virginia NICU Medicaid
					 utilization (Virginia NICU Medicaid days as a percent of total NICU Medicaid
					 days). Eligible DSH days for out-of-state cost reporting hospitals that qualify
					 for DSH but that have less than 12% Virginia Medicaid utilization shall be 50%
					 of the days that would have otherwise been eligible DSH days.
3. Additional eligible DSH days are days that
					 exceed 28% Medicaid utilization for Virginia Type Two hospitals, excluding
					 Children's Hospital of the Kings Daughters (CHKD).
4. The DSH per diem shall be calculated in
					 the following manner:
a. The DSH per diem for
					 Type Two hospitals is calculated by dividing the total Type Two DSH allocation
					 by the sum of eligible DSH days for all Type Two DSH hospitals. For purposes of
					 DSH, Type Two hospitals do not include CHKD or any hospital whose reimbursement
					 exceeds its federal uncompensated care cost limit. The Type Two hospital DSH
					 allocation shall equal the amount of DSH paid to Type Two hospitals in state FY
					 2014 increased annually by the percent change in the federal allotment,
					 including any reductions as a result of the Patient Protection and Affordable
					 Care Act (Affordable Care Act),
					 Public Law
					 111-148, adjusted for the state fiscal year.
					 Effective July 1, 2018, the Type Two hospital DSH allocation shall be reduced
					 by the amount of DSH allocated to freestanding children's hospitals located in
					 the District of Columbia.
b. The
					 DSH per diem for state inpatient psychiatric hospitals is calculated by
					 dividing the total state inpatient psychiatric hospital DSH allocation by the
					 sum of eligible DSH days. The state inpatient psychiatric hospital DSH
					 allocation shall equal the amount of DSH paid in state FY 2013 increased
					 annually by the percent change in the federal allotment, including any
					 reductions as a result of the Affordable Care Act, adjusted for the state
					 fiscal year.
c. Effective July 1,
					 2017, the annual DSH payment shall be calculated separately for each eligible
					 hospital by multiplying each year's state inpatient psychiatric hospital DSH
					 allocation described in subdivision C 4 b of this section by the ratio of each
					 hospital's uncompensated care cost for the most recent DSH audited year
					 completed prior to the DSH payment year to the uncompensated care cost of all
					 state inpatient psychiatric hospitals for the same audited year.
d. The DSH per diem for CHKD shall be three
					 times the DSH per diem for Type Two hospitals.
5. Each year, the department shall determine
					 how much Type Two DSH has been reduced as a result of the Affordable Care Act
					 and adjust the percent of cost reimbursed for outpatient hospital
					 reimbursement.