Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Medicare Payments

09/01/2002

Medicare DSH payments are made only to acute care hospitals paid under the prospective payment system for inpatient hospital services. The payments are an add-on to the standard DRG federal payment rate. Sole community and Medicare-dependent hospitals that are paid a hospital-specific rate do not receive DSH payments. The DSH payment formula for operating costs differs across classes of hospital while only urban hospitals with 100 or more beds are eligible for DSH payments on the federal payment for capital-related costs (Table 1.1). As explained in Chapter 1, operating DSH payments were affected by the Balanced Budget Act of 1997, the Balanced Budget Refinement Act (BBRA), and the Beneficiary Improvement and Protection Act (BIPA).

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