Federal Court Decisions Limit Medicare DSH Reimbursement - October 19, 2009

Federal courts in both Washington (click here) and New Jersey (click here) have issued decisions significantly limiting Medicare DSH reimbursement. The courts upheld HHS determinations that patients covered under state programs funded through Medicaid DSH payments do not qualify as Medicaid-eligible patients for purposes of the Medicare DSH calculation. Because the state programs do not directly receive federal matching funds under Medicaid, inpatient days for patients in Washington’s casualty-medically indigent and general assistance unemployable programs and the New Jersey Charity Care Program cannot be included in the Medicaid portion of the calculation. The eighteen Washington hospital plaintiffs will lose $31 million, and Cooper University Hospital (the New Jersey plaintiff) will lose $1.145 million in Medicare DSH reimbursement.