The current definition of uninsured patients deems a patient as insured if they have any active insurance coverage, regardless of whether their insurance covers the specific services provided.
“In practical application, this definition appeared to exclude from uncompensated care for DSH purposes the costs of many services that were provided to individuals with creditable coverage but were outside the scope of such coverage,” regulators wrote in the proposed rule.
The proposed change also would consider DSH payment-eligible any service provided that is not covered by an insurance policy because it exceeds a policy's annual or lifetime limits.
The existing eligibility definitions drew objections from hospitals and state officials when they were finalized in 2008, according to regulators, because those rules excluded from reimbursement the uncompensated care of many individuals.
“We are very pleased the CMS decided to define ‘uninsured' on a service-specific basis, rather than an individual basis,” Xiaoyi Huang, assistant vice president for policy at the National Association of Public Hospitals and Health Systems, said in an interview.
The NAPH plans to submit comments to the CMS during the 30-day comment period, according to Huang, who added that there are three types of costs that are still excluded from DSH payments that the organization would like to see included. Those are: unpaid copayments and deductibles; payments that have been administratively denied; and cost of care to prisoners. For the last category, the uncompensated care cost can only be included in the DSH limit for those inmates who have been released from secure custody.