Issue Brief 9-03
January 26, 2009

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA; P.L. 108-391) increased ceilings for disproportionate share hospital (DSH) payments for FY 2004 and beyond. On December 22, 2008, the Centers for Medicare and Medicaid Services (CMS) published a notice in the Federal Register delineating final FY 2007 DSH ceilings. That publication was also intended to publish preliminary FY 2009 ceilings. However, those data were dropped from the published table, and were finally published on January 26, 2009. Also published in December 2008 were ceilings on DSH payments to institutions for mental disease (IMDs) and other mental health facilities.

Section 5007 of the House stimulus bill would further increase DSH ceilings for all states by 2.5% for FY 2009 and another 2.5% from the new FY 2009 ceilings for FY 2010 for high-DSH states.

The MMA also contained language requiring DSH reporting and auditing. CMS published that rule on December 19, 2008, effective immediately.