Federal Court Rejects Application of Charity Care Days to Medicare DSH Adjustment - November 3, 2010

On Oct. 12, the Federal Court of Appeals for the Third Circuit affirmed a lower court decision that prohibited a New Jersey hospital from including patient days from the New Jersey Charity Care Program as part of its Medicare disproportionate share hospital (DSH) adjustment calculation. The Court agreed with the lower court decision, which deferred to the federal Centers for Medicare & Medicaid Services (CMS) decision that the charity care days were not Medicaid days and thus should not be included in the Medicare DSH calculation. The decision keeps millions of dollars of Medicare DSH funding from going to the plaintiff – Cooper University Hospital – and other hospitals across the state.