Our estimates of FY 1998 Medicare DSH payments relied on the PPS Impact file (which we used to estimate Medicare DSH payments in Chapter 4). For FY 1997 and FY 1999, we used the DSH payment amounts reported on the Medicare cost reports. Our estimate of actual FY 1998 Medicare DSH payments using the PPS impact files closely matches the reported amounts on the cost reports.1
For the Medicaid component of DSH payments, we assumed that the "new" DSH or net gain to the hospital from DSH payments is the Federal share of total DSH payments reported by the State as being paid to the hospital. We have the FY 1998 reported amounts. We approximated payments for FY1997 and FY1999 based on the FY 1998 data. To do so, we applied state-level Medicaid DSH program growth rates in Federal DSH payments (FY1997/FY1998 and FY1998/FY1999) to the FY1998 data.
1. The correlation coefficient between the two series is equal to 0.95, there is less than 0.5% difference in total DSH payments, and the mean and standard deviation values are similar (0.5% and 1% difference, correspondingly).