Noteworthy News

Proposed Medicare Inpatient Regulation Released

The Centers for Medicare & Medicaid Services (CMS) has released its proposed annual Medicare inpatient prospective payment system regulation.  This regulation ultimately will dictate how Medicare pays hospitals when the 2013 fiscal year begins on October 1, 2012.

As significant as what this year’s draft regulation says is what it does not say.  Even though eligible hospitals face cuts of as much as 75 percent in their Medicare disproportionate share hospital payments (Medicare DSH) beginning in FY 2014, the proposed regulation addresses neither how Medicare DSH payments might be calculated come 2014 nor how CMS will determine how much uncompensated care hospitals provide after the Affordable Care Act’s individual health insurance mandate takes effect.  Under the health care reform law, uncompensated care will be a critical factor in determining how much Medicare DSH money hospitals receive in the future.

Medicare DSH payments are vital resources for urban safety-net hospitals because of the large numbers of uninsured and low-income elderly patients they serve.  The methodology CMS ultimately adopts for calculating future Medicare DSH payments could very well be a make-or-break matter for some of these hospitals.

The proposed Medicare inpatient regulation, CMS’s news release announcing the regulation, and a CMS fact sheet can be found here.  In addition, NAUH has prepared a detailed memo describing the proposed regulation’s potential impact on urban safety-net hospitals.  All NAUH members should have received this memo by now, and it also is available hereNAUH Logo.  Others interested in a copy of the memo can contact Ellen Kugler, NAUH’s executive director, at 703-444-0989 or

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