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

09/01/2002

Wisconsin supports its Medicaid DSH program through general revenues so that, unlike the California and New York DSH programs, all DSH funds are "new" money to the hospitals. Hospitals qualify for DSH payments if they meet the federal minimum requirements for DSH payments. The DSH payment is incorporated into a hospital-specific diagnosis-related per discharge payment for inpatient services provided to Medicaid beneficiaries.

  • For community hospitals with a high Medicaid utilization rate, the DSH formula ranges from a minimum 3% adjustment to a 5.5% adjustment to the hospital with the highest Medicaid utilization rate.3
  • The low-utilization rate is the sum of the hospital's total payments from the Medicaid program and local indigent care subsidies as a percentage of net revenues plus the percentage of the hospital's gross revenues attributable to charity care. Courtesy care and bad debt are excluded from the definition of charity care. The DSH adjustment factor is:
Low income utilization rate Adjustment percentage
25.0%- 43.99% 3.0%
44.0%-62.99% 3.5%
63.0%-81.99% 4.0%
82.0% and greater 4.5%

3.  The 3% minimum is increased to 11% for qualifying IMDs with an average length of stay that exceeds 60 days for Wisconsin Medicaid recipients.

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