Medicaid Eligibility (DSH/LIP)

The enactment of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 provides for an additional payment to hospitals that serve a disproportionate share (DSH) of low-income patients. The Medicare DSH percentage is calculated based on Medicare, Medicare SSI, and Medicaid Days. The DSH percentage is then applied to the hospital’s PPS payment to determine the DSH adjustment. For inpatient rehabilitation facilities, this adjustment is known as the “Low Income Patient” (LIP) Adjustment.

The DSH and LIP Reimbursement analysis reviews the hospital’s patient data for a given year to insure that all eligible Medicaid and/or Medicare SSI days were captured in the DSH percentage calculation used on the cost report.

Additional DSH/LIP Reimbursement might have been missed due to inaccurate non-Medicare Medicaid days reported in a hospital’s billing system. Kraft Healthcare Consulting, LLC can verify that all non-Medicare Medicaid patients were captured on the cost report.

  • Hospital patient admittance and discharge data will be collected from the billing system
  • Patient data will then be verified against the appropriate state’s Medicaid
  • Verified non-Medicare Medicaid patients will be cross walked against data used in the cost report to determine if additional reimbursement is available

Kraft Healthcare Consulting, LLC can also review a hospital’s SSI ratios to see if it is greater than the SSI ratio published by Medicare, resulting in additional DSH/LIP reimbursement.

  • Kraft Healthcare Consulting can help verify the SSI eligibility status for Medicare patients for the given cost report year
  • Medicare SSI days can then be recalculated using the hospital’s data and compared to CMS published numbers
  • CMS is currently reviewing the published FY 2006 SSI days. Kraft Healthcare Consulting can help determine what the revised number should be.

Kraft Healthcare Consulting’s team has experience in DSH/LIP reimbursement analysis finding additional DSH reimbursement in most cases.

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