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Statement on CMS proposal to implement new payment adjustment methodology for Medicare DSH

April 26, 2013

Statement attributable to:
Beth Feldpush
Senior Vice President for Policy and Advocacy
National Association of Public Hospitals and Health Systems

WASHINGTON – “NAPH is deeply disappointed with how CMS has proposed to calculate hospitals’ uncompensated care costs. While we share the agency’s concerns about the reliability of S10 data, the alternative of using the same data sources as for the existing DSH program is not consistent with congressional intent.”

“The DSH methodology has long been criticized for failing to account for the costs of providing care to uninsured individuals. Congress intended to correct this flaw when it specifically directed the secretary to pay hospitals a new adjustment distributed among hospitals based on their share of the costs of treating uninsured patients. This would sensibly allocate scarce DSH resources to hospitals providing greater amounts of uncompensated care.”

“But CMS fails to follow Congress’ intent with this proposed rule. Rather than taking into account the cost of providing care to the uninsured, CMS has instead continued to rely on the same unsound proxy that ignores uninsured individuals and instead focuses on Medicaid and low-income Medicare patients.”

“We strongly disagree with the agency’s assumption that ‘data on utilization for insured low-income patients can be a reasonable proxy for the treatment costs of uninsured patients.’ “Furthermore, CMS’ proposal to focus on relative inpatient days of serving these patients fails to account for the intensity of resources needed to treat complex patients seen by safety net hospitals versus a more routine stay. NAPH strongly urges CMS to reconsider this flawed methodology.”

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About the National Association of Public Hospitals and Health Systems (NAPH)
NAPH represents the nation’s safety net hospitals and health systems, which provide high volumes of care to low-income individuals. These facilities offer high-quality health services for all patients, including the uninsured and underinsured, regardless of ability to pay. In addition to helping ensure access to health care for all Americans, safety net hospitals provide many essential communitywide services, such as primary care, trauma care, and neonatal intensive care. Safety net hospitals also train many of America’s doctors, nurses, and other health care providers. Since its inception in 1980, NAPH has cultivated a strong presence on Capitol Hill, with the executive branch, and in many state capitols. NAPH advocates on behalf of its members on such issues as Medicaid, Medicare, and access to health care services for vulnerable populations. For more information, visit our website at

Media contact:
Carl Graziano


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