CMS Implements BIPA Provisions on DSH and GME Payments - Centers for Medicare and Medicaid Services - Brief Article

Healthcare Financial Management, August, 2001

The Centers for Medicare and Medicaid Services (CMS--formerly HCFA) published in the June 13, 2001, Federal Register an interim final rule implementing provisions of the 2000 Benefits Improvement and Protection Act (BIPA) governing disproportionate share hospital (DSH) payments, indirect graduate medical education (GME), and other key areas. With the rule, CMS reduced the DSH thresholds for certain facilities, effective for discharges on or after April 1, 2001.

CMS also decreased the reductions in the DSH payment for FY01 and FY02 to 2 and 3 percent, respectively.

For the indirect medical education (IME) adjustment for GME, the formula multiplier will be increased from 1 .54 to 1 .66 for discharges occurring between April 1, 2001, and October 1, 2001. The rule also increases direct GME payments.

Under the rule, payments for psychiatric hospitals and units excluded from the hospital inpatient prospective payment system (PPS) will be the lower of the facility's ceiling or the net inpatient operating costs plus 1 5 percent of the difference between those costs and the ceiling, if the allowable costs did not exceed the ceiling for cost-reporting periods beginning after October 1, 2000. In addition, long-term care hospitals will receive a 2 percent increase to the wage-adjusted 75th percentile cap on their target amount.

Other BIPA provisions implemented in this rule involve payments for capital-related costs under the hospital inpatient PPS and the use of services to Medicare Choice enrollees in nursing and allied education. The rule includes a list of the effective dates of policy changes mandated by BIPA. Comments were due July 13, 2001.