FR Doc 04-6834

[Federal Register: March 26, 2004 (Volume 69, Number 59)]
[Notices]
[Page 15850-15884]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26mr04-83]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2062-N]
RIN 0938-AJ74

Medicaid Program; Disproportionate Share Hospital Payments

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice announces the final Federal share disproportionate
share hospital (DSH) allotments for Federal fiscal years (FFYs) 2001
and 2002, and the preliminary Federal share DSH allotments for FFYs
2003 and 2004. It also announces the final FFYs 2000, 2001, and 2002,
and the preliminary FFYs 2003 and 2004, limitations on aggregate DSH
payments that States may make to institutions for mental disease (IMDs)
and other mental health facilities. In addition, this notice describes
the methodologies for determining the amounts of States' FFY DSH
allotments for FFY 2001 and thereafter. It also republishes the Federal
share DSH allotments for FFYs 1998 through 2000, and the final FFYs
1998 and 1999 limitations on aggregate DSH payments that States may
make to IMDs and other mental health facilities. Additionally, the
notice specifies a format to be used by States when submitting their
annual DSH report to ensure that Federal funds provided for DSH
adjustments are made in accordance with the Medicaid statutory
requirements.

FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 786-2019 (DSH
Allotments and IMD DSH Limits); Jonas Eberly, (410) 786-6232 (Annual
DSH report for DSH payments).

SUPPLEMENTARY INFORMATION:

I. Background

A. DSH Allotments and IMD DSH Limits Published in October 8, 1998
Federal Register.

We published a notice in the October 8, 1998 Federal Register (63
FR 54142) that announced the Federal share DSH allotments for FFYs 1998
through 2002 and the IMD DSH limits for FFYs 1998 and 1999. The DSH
allotments and IMD DSH limits published in that notice specified and
were determined in accordance with the sections 1923(f) and (1923(h) of
the Social Security Act (the Act), as amended by the Balanced Budget
Act of 1997 (BBA) (Pub. L. 105-33, enacted on August 5, 1997). The
notice also reflected the FFY 1998 DSH allotment for one State,
specified in accordance with section 601 of Pub. L. 105-78 (enacted on
November 13, 1997).
Additional legislative changes relating to the amounts or
methodologies for calculating the States' DSH allotments or IMD DSH
limits have been made to the Act since the publication of the October
8, 1998 notice. In this section and in Section II of this notice, we
describe each of the legislative changes related to the DSH allotments
and IMD DSH limits for fiscal years that were not included in the
October 8, 1998 notice.

B. DSH Allotments For FFYs 1998 Through 2000

Section 4721(a) of the BBA amended section 1923(f) of the Act to
require that Federal Medicaid DSH expenditures be limited by the
statutorily defined Federal share DSH allotments for FFYs 1998 through
2002 specified in a chart in section 1923(f)(2) of the Act. Section 601
of Pub. L. 105-78 amended the DSH allotment contained in this chart for
the State of Minnesota for FFY 1998. The October 8, 1998 notice
published the statutorily prescribed DSH allotments for all States for
FFYs 1998 through 2002, in accordance with the amounts specified in the
chart at section 1923(f)(2) of the Act, as established by the BBA and
as amended by Pub. L. 105-78. Subsequent to the publication of the DSH
allotments for these years, a number of legislative actions revised the
DSH allotments specified in the chart at section 1923(f)(2) of the Act,
for certain States. Specifically, sections 702, 703, and 704 of Pub. L.
105-277 (enacted on October 21, 1998) amended the FFY 1999 DSH
allotments for Minnesota, New Mexico, and Wyoming, respectively, and
section 601(a) of the Medicare, Medicaid, SCHIP Balanced Budget
Refinement Act of 1999 (BBRA) (Pub. L. 106-113, enacted on November 29,
1999) amended the FFYs 2000, 2001, and 2002 DSH allotments for the
District of Columbia, Minnesota, New Mexico, and Wyoming.

C. DSH Allotments For FFYs 2001 and 2002

Section 701(a) of the Benefits Improvement and Protection Act of
2000 (BIPA) (Pub. L. 106-554, enacted on December 21, 2000) added a new
section 1923(f)(4) of the Act that provided for a ``Special Rule For
Fiscal Years 2001 and 2002,'' under which States' DSH allotments for
FFY 2001 and 2002 would be determined through the application of a
methodology. The DSH allotments for these fiscal years, calculated
under this methodology, supercede the DSH allotments for the years that
are specified in the chart at section 1923(f)(2) of the Act. Under
section 1923(f)(4) of the Act, the DSH allotments for FFY 2001 and FFY
2002 are determined by increasing the States' prior FFY DSH allotments
by the Consumer Price Index for all Urban Consumers (CPI-U) for the
prior fiscal year, subject to the limitation that an increase to a
State's DSH allotment for a fiscal year could not result in the DSH
allotment exceeding 12 percent of the State's total Federal medical
assistance expenditures for the allotment year (referred to as the 12-
percent limit). The application of this special rule for FFY 2001 and
FFY 2002 had the effect of increasing States' DSH allotments for those
years, as compared to the allotments they would have received under the
chart at section 1923(f)(2) of the Act. In fact, the chart contained at
section 1923(f)(2) of the Act would have provided for a decrease in
States' DSH allotments over the fiscal years.
The BIPA also added a new section 1923(f)(5) of the Act, which
established a ``Special Rule For Extremely Low DSH States.'' Under this
rule, States with FFY 1999 DSH expenditures that were

[[Page 15851]]

greater than zero percent and less than 1 percent of the States' FFY
1999 total medical assistance expenditures were considered to be ``low-
DSH States.'' Under section 1923(f)(5) of the Act, the Low-DSH States'
FFY 2001 DSH allotments were increased to 1 percent of the States'
total FFY 2001 medical assistance expenditures. The Low-DSH States'
increased FFY 2001 DSH allotments were the basis for calculating the
States' FFY 2002 DSH allotments. That is, similar to the methodology
applied for determining the other (non-Low-DSH) States' allotments, the
Low-DSH States' FFY 2002 allotments were determined by increasing their
FFY 2001 allotment (as determined under the Low-DSH provision at
section 1923(f)(5) of the Act) by the CPI-U for the prior fiscal year,
subject to the 12-percent limit.

D. DSH Allotments for FFY 2003

Section 1923(f)(3) of the Act, as established by the BBA and
amended by the BIPA, provides that the States' FFY 2003 DSH allotments
are calculated by increasing their FFY 2002 allotments (as specified in
the chart in Section 1923(f)(2) of the Act) by the CPI-U for the prior
fiscal year, subject to the 12-percent limit. That is, the FFY 2003
allotments were not based on the FFY 2002 DSH allotments as were
determined under section 1923(f)(4) of the Act. Since the FFY 2002 DSH
allotments specified in the chart in section 1923(f)(2) of the Act are
lower than the actual FFY 2002 DSH allotments (determined under section
1923(f)(4) of the Act), in general, States' FFY 2003 DSH allotments are
lower than their FFY 2002 allotments. The exception to this, are the
FFY 2003 DSH allotments for the Low-DSH States. Under the Low-DSH State
provision, the Low-DSH States' FFY 2003 allotments are determined by
increasing their actual FFY 2002 DSH allotments (not their FFY 2002
allotments specified in the chart in section 1923(f)(2) of the Act) by
the CPI-U for the previous fiscal year. Therefore, Low-DSH States' DSH
allotments increase (in general by the CPI-U) from FFY 2002 to FFY
2003.

E. DSH Allotments for FFY 2004

Section 1001(a) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (enacted on December 8, 2003) amended
section 1923(f)(3) of the Act to provide for a ``Special, Temporary
Increase In Allotments On A One-Time, Non-Cumulative Basis.'' Under
this provision, States' FFY 2004 DSH allotments are determined by
increasing their FFY 2003 allotments by 16 percent, and the fiscal year
DSH allotment amounts so determined are not subject to the 12-percent
limit.

F. DSH Allotments for FFY 2005, and Thereafter

Under the MMA amendments to section 1923(f) of the Act, each
State's DSH allotment for FFY 2005 and for subsequent fiscal years is
equal to the State's DSH allotment for FFY 2004, subject to the 12-
percent limit. Furthermore, in the first fiscal year for which the
Secretary estimates that a State's DSH allotment equals (or no longer
exceeds) the DSH allotment as would have been determined under the
statute in effect prior to the enactment of MMA, the allotment for that
fiscal year will be calculated by increasing the State's DSH allotment
for the previous fiscal year by the CPI-U for the prior fiscal year,
subject to the 12-percent limit. The following example illustrates how
the fiscal year DSH allotment would be calculated for fiscal years
after FFY 2004.
Example--A State's FFY 2003 DSH allotment is $100 million. Under
the MMA, the State's FFY 2004 DSH allotment would be $116 million ($100
million increased by 16 percent). The State's DSH allotment continues
to $116 million for fiscal years following FFY 2004. However, for each
fiscal year after FFY 2004, CMS would calculate the DSH allotments for
the State in accordance with the statute in effect prior to the
enactment of MMA. Under this methodology, the State's DSH allotment is
determined by increasing the State's DSH allotment for the previous
fiscal year by the CPI-U for the previous fiscal year. For purposes of
this example, in accordance with this methodology the State's FFY 2007
DSH allotment is determined to be $115 million and the CPI-U for FFY
2007 is 2 percent. Therefore, under the prior law methodology, the
State's FFY 2008 DSH allotment would be $117.3 million, calculated as
$115 million increased by the 2 percent CPI-U for FFY 2007. Since
$117.3 is greater than $116 million (the FFY 2004 DSH allotment
calculated under MMA), the State's FFY 2008 DSH allotment would be
$118.32 million, calculated as $116 million increased by 2 percent (the
CPI-U for FFY 2007, the previous fiscal year). For FFY 2009 and
thereafter, the State's DSH allotment would be calculated by increasing
the previous fiscal year's DSH allotment by the CPI-U. Note, in each of
the FFYs 2005 and thereafter, the DSH allotment would be subject to the
12-percent limit (in this example, that is not an issue).

G. DSH Allotments For Low-DSH States for FFYs 2004 and Thereafter

The MMA also amended section 1923(f)(5) of the Act regarding the
calculation of the DSH allotments for Low-DSH States for FFY 2004 and
subsequent fiscal years. Under section 1923(f)(5)(B) of the Act, as
amended by MMA, new criteria are applied for determining whether a
State is a Low-DSH State beginning with FFY 2004. Specifically, under
section 1923(f)(5)(B) of the Act, as amended by MMA, a State is
considered a Low-DSH State for FFY 2004 if its total DSH payments under
its State plan for FFY 2000 (including Federal and State shares) as
reported to us as of August 31, 2003, is greater than 0 percent and
less than 3 percent of the State's total FFY 2000 expenditures under
its State plan for medical assistance. For States, that meet the new
Low-DSH criteria, their FFY 2004 DSH allotments are calculated by
increasing their FFY 2003 DSH allotments by 16 percent. Furthermore,
the DSH allotments for FFYs 2005 through 2008 for the States meeting
this Low-DSH criteria would be determined by increasing the previous
fiscal year's allotment by 16 percent. The Low-DSH States' DSH
allotments for FFYs 2004 through 2008 would not be subject to the 12-
percent limit. The Low-DSH States' DSH allotments for FFYs 2009 and
thereafter would be calculated by increasing such States' DSH
allotments for the prior fiscal year by the CPI-U for that prior fiscal
year. For FFYs 2009 and thereafter, the DSH allotments so determined
would be subject to the 12-percent limit.

H. IMD DSH Limits for FFYs 1998 and Thereafter

Section 4721(b) of the BBA added section 1923(h) to the Act to
provide that Federal financial participation (FFP) is not available for
DSH payments to institutions for mental disease (IMD) and other mental
health facilities that are in excess of a State-specific aggregate
limit.
In the October 8, 1998 Federal Register notice, we interpreted the
aggregate limit of IMD and other mental health facilities to be the
lesser of a State's FFY 1995 total computable (State and Federal share)
IMD and other mental health facility DSH expenditures applicable to the
State's FFY 1995 DSH allotment (as reported on the Form CMS-64 as of
January 1, 1997), or the amount equal to the product of the State's s
current year total computable DSH allotment and the applicable
percentage.

[[Page 15852]]

Each State's IMD limit on DSH payments to IMDs and other mental
health facilities is calculated by first determining the State's total
computable DSH expenditures attributable to the FFY 1995 DSH allotment
for mental health facilities and inpatient hospitals. This is based on
the total computable DSH expenditures reported by the State on the Form
CMS-64 as mental health DSH and inpatient hospital as of January 1,
1997.
Once we determine the total computable amount of DSH expenditures
applicable to the FFY 1995 DSH allotment, we then calculate an
``applicable percentage.'' The applicable percentage for FFY 1998
through FFY 2000 (1995 IMD DSH percentage) is calculated by dividing
the total computable amount of IMD and mental health DSH expenditures
applicable to the State's FFY 1995 DSH allotment by the total
computable amount of all DSH expenditures (mental health facility plus
inpatient hospital) applicable to the FFY 1995 DSH allotment. For FFY
2001 and thereafter, the applicable percentage is defined as the lesser
of the applicable percentage as calculated above (for FFYs 1998 through
2001) or 50 percent for FFY 2001; 40 percent for FFY 2002; and 33
percent for each subsequent FFY.
The applicable percentage is then applied to each State's total
computable FFY DSH allotment for the current FFY. The State's total
computable FFY DSH allotment is calculated by dividing the State's
Federal share DSH allotment for the FFY by the State's Federal medical
assistance percentage (FMAP) for that FFY.
In the final step of the calculation, the State's total computable
IMD DSH limit for the FFY is set at the lesser of the product of a
State's current fiscal year total computable DSH allotment and the
applicable percentage for that fiscal year, or the State's FFY 1995
total computable IMD and other mental health facility DSH expenditures
applicable to the State's FFY 1995 DSH allotment as reported on the
Form CMS-64.

I. Preliminary and Final DSH Allotments and IMD DSH Limits

In general, we initially determines States' DSH allotments and IMD
DSH limits for a fiscal year using estimates of medical assistance
expenditures, including DSH expenditures in their Medicaid programs.
These estimates are provided by States each year on the August
quarterly Medicaid budget reports (Form CMS-37) prior to the Federal
fiscal year for which the DSH allotments and IMD DSH limits are being
determined. The DSH allotments and IMD DSH limits determined using
these estimates are referred to as ``preliminary.'' Only after we
receive States'' reports of the actual related medical assistance
expenditures through the quarterly expenditure report (Form CMS-64),
are the ``final'' DSH Allotments and IMD DSH limits determined. In this
regard, the DSH allotments for FFY 1998 through FFY 2000, as published
in the October 8, 1998 Federal Register notice were considered as final
since these allotments were prescribed in the chart in section
1923(f)(2) of the Act. Similarly, the FFY 1998 and FFY 1999 IMD DSH
limits published in the October 8, 1998 Federal Register were also
considered as final, since these limits were based on the actual
expenditures from FFY 1995 and the final FFY 1998 and FFY 1999 DSH
allotments. This notice also announces the final FFY 2001 and 2002 DSH
allotments (since they are based on the actual related expenditures),
the preliminary FFY 2003 and 2004 DSH allotments (based on estimated
expenditures), the final FFY 2000 through 2002 IMD DSH limits (based on
the final DSH allotments for those fiscal years), and the preliminary
FFY 2003 and 2004 IMD DSH limits (based on the preliminary DSH
allotments for those years).

J. Annual Reporting of DSH Payments

Section 4721(c) of the BBA added section 1923(a)(2)(D) of the Act
to require that States submit an annual report to us describing the DSH
payments made to each disproportionate share hospital. This notice
describes the contents of the DSH report for FFY 2004.

II. Calculation of the Final FFY 2001 Federal Share State DSH
Allotments, the Final FFY 2002 Federal Share State DSH Allotments, the
Preliminary FFY 2003 Federal Share State DSH Allotments, and the
Preliminary FFY 2004 Federal Share State DSH Allotments

Section 701(a)(1)(A) of BIPA, amended section 1923(f)(4) of the
Act, to revise the formula for computing the Federal share DSH
allotments for FFY 2001 and FFY 2002. For FFY 2001 and FFY 2002, a
State's Federal share DSH allotment increased from the prior year
allotment by the (CPI-U) to the extent that the current year DSH
allotment or the increased allotment does not exceed 12 percent of the
Federal share of the State's total medical assistance expenditures
(including DSH) for the current year.
Section 701(a)(2)(A) of BIPA, amended section 1923(f)(5) of the
Act, to provide for calculating the DSH allotment under a ``special
rule for extremely low DSH States.'' The special rule applies to States
whose FFY 1999 total DSH expenditures are greater than zero percent,
but less than one percent, of their total FFY 1999 medical assistance
expenditures (including DSH) as reported to us as of August 31, 2000.
Under the special rule, the DSH allotments for FFY 2001 for these
extremely Low-DSH States will be increased to 1 percent of the State's
total amount of medical assistance expenditures (including DSH) under
their plan for FFY 2001. However, application of the special rule
cannot result in a decrease in the extremely Low-DSH State FFY 2001
allotments from an amount as would be calculated by application of the
provisions of section 1923(f)(4) of the Act, as amended by BIPA. For
subsequent fiscal years, the allotments for extremely Low-DSH States
will be equal to their allotment for the previous FFY, increased by the
percentage change in the CPI-U for the previous year, to the extent
that the DSH allotment for that year does not exceed 12 percent of the
Federal Share of the State's total medical assistance expenditures
(including DSH) for the year.
Chart 1 of Addendum A to this notice represents a republication for
the States' FFY 1998 through FFY 2000 DSH allotments; these amounts
were previously published in the Federal Register on October 8, 1998,
in a chart which reflected the DSH allotments in section 1923(f)(2) of
the Act, as amended through the provisions of section 601 of Pub. L.
105-78. Chart 1 updates the chart published in the Federal Register on
October 8, 1998 for certain States to reflect the further amendments
made to the DSH allotments for FFY 1998 through FFY 2000 in section
1923(f)(2) of the Act, as amended by BBRA.
Charts 2 and 3 of Addendum A to this notice provides the States'
final FFY 2001 and FFY 2002 DSH allotments, respectively.
Charts 4 and 5 of Addendum A to this notice provides the States'
``preliminary'' FFY 2003 and FFY 2004 DSH allotments. These preliminary
allotments for each State were computed using the August 2002 and
August 2003 estimates submitted by the States on the Form CMS-37. We
will publish the final FFY 2003 and FFY 2004 DSH allotments for each
State following receipt of, the States' four quarterly Medicaid
expenditure reports

[[Page 15853]]

(Form CMS-64) for FFY 2003 and FFY 2004.
Chart 6 of Addendum A to this notice provides the determination of
the Low-DSH States in accordance with the 1-percent test established by
BIPA for determining State FY 2001 DSH allotments.
Chart 7 of Addendum A to this notice provides the determination of
the Low-DSH States in accordance with the 3-percent test established by
MMA for determining State FY 2004 DSH allotments.

III. Calculation of the FFYs 2000 through 2004 IMD DSH Limits

Section 1923(h) of the Act specifies the methodology to be used to
establish the limits on the amount of DSH payments that a State can
make to IMDs and other mental health facilities. FFP is not available
for IMD/DSH payments that exceed the lesser of the State's FFY 1995
total computable mental health DSH expenditures applicable to the
State's FFY 1995 DSH allotment as reported to us on the Form CMS-64 as
of January 1, 1997; or the amount equal to the product of the State's
current FFY total computable DSH allotment and the applicable
percentage. The amounts of the limits on IMD DSH expenditures were made
available to the States as part of their CMS-64 report. We are
publishing these limits along with an explanation of the calculation of
these limits in the Federal Register notice as a courtesy to providers
and the general public.
For FFY 2000, the applicable percentage is computed as the ratio
of--
(1) The State's FFY 1995 total computable (Federal and State share)
mental health DSH payments applicable to the State's FFY 1995 DSH
allotment and as reported on the Form CMS-64 as of January 1, 1997
(2) The State's FFY 1995 total computable amount of all DSH
expenditures (mental health facility and inpatient hospital) applicable
to the State's FFY 1995 DSH allotment as reported on the Form CMS-64 as
of January 1, 1997.
For FFY 2000, the applicable percentage is calculated and applied
to the State's FFY 2000 total computable DSH allotment. A State's total
computable FFY 2000 DSH allotment is calculated by dividing the State's
Federal share DSH allotment for FFY 2000 by the State's Federal medical
assistance percentage (FMAP) for FFY 2000. This result is then compared
to the State's FFY 1995 total computable mental health DSH expenditures
applicable to the State's FFY 1995 DSH allotment as reported on the
Form CMS-64 as of January 1, 1997. The lesser of these two amounts is
the State's limitation on total computable IMD/DSH expenditures for FFY
2000.
For FFY 2001, the applicable percentage is the lesser of 50 percent
or the 1995 DSH IMD percentage of the amount computed for FFY 2000.
This percentage is applied to the State's FFY 2001 total computable DSH
allotment. This result is then compared to the State's FFY 1995 total
computable mental health DSH expenditures applicable to the State's FFY
1995 DSH allotment as reported on the Form CMS-64 as of January 1,
1997. The lesser of these two amounts is the State's limitation on
total computable IMD/DSH expenditures for FFY 2001.
For FFY 2002, the applicable percentage is the lesser of 40 percent
or the 1995 DSH IMD percentage of the amount computed for FFY 2000.
This percentage is applied to the State's FFY 2002 total computable DSH
allotment. This result is then compared to the State's FFY 1995 total
computable mental health DSH expenditures applicable to the State's FFY
1995 DSH allotment as reported on the Form CMS-64 as of January 1,
1997. The lesser of these two amounts is the State's limitation on
total computable IMD/DSH expenditures for FFY 2002.
For FFY 2003, the applicable percentage is the lesser of 33 percent
or the 1995 DSH IMD percentage of the amount computed for FFY 2000.
This percentage is applied to the State's FFY 2003 total computable DSH
allotment. This result is then compared to the State's FFY 1995 total
computable mental health DSH expenditures applicable to the State's FFY
1995 DSH allotment as reported on the Form CMS-64 as of January 1,
1997. The lesser of these two amounts is the State's limitation on
total computable IMD/DSH expenditures for FFY 2003.
For FFY 2004, the applicable percentage is the lesser of 33 percent
or the 1995 DSH IMD percentage of the amount computed for FFY 2000.
This percentage is applied to the State's FFY 2004 total computable DSH
allotment. This result is then compared to the State's FFY 1995 total
computable mental health DSH expenditures applicable to the State's FFY
1995 DSH allotment as reported on the Form CMS-64 as of January 1,
1997. The lesser of these two amounts is the State's limitation on
total computable IMD/DSH expenditures for FFY 2004.
Charts 8 and 9 of Addendum A to this notice represents a
republication of the detail of each States' IMD/DSH limitation for FFY
1998 and FFY 1999; these amounts were previously published in the
Federal Register on October 8, 1998, in a chart which reflected the IMD
DSH limits in section 1923(h) of the Act, as amended through the
provisions of section 601 of Pub. L. 105-78. Charts 8 and 9 updates the
chart published in the Federal Register on October 8, 1998 for certain
States to reflect the further amendments made to the DSH allotments for
FFY 1998 through FFY 2000 in section 1923(f)(2) of the Act (which are
used in the determination of the IMD DSH limits), as amended BBRA.
Charts 10 through 14 of Addendum A to this notice detail each
State's IMD/DSH limitation for FFYs 2000 through 2004, respectively, in
accordance with section 1923(h) of the Act. We will address future
payments in subsequent issuances.

IV. Annual Reporting Requirements

Section 4721(a) of Pub. L. 105-33, amended section 1923(a) of the
Act requiring States to provide an annual report to the Secretary
describing the disproportionate share payments to each DSH.
In the October 8, 1998 Federal Register (63 FR 54142), we published
a notice that addressed the annual reporting requirements. In that
notice, we recommended that a State submit hospital-specific data (name
of hospital, type of hospital--for example, children's, psychiatric,
public versus private--and annual payment) to its CMS regional office
at the close of the first quarter of the FFY following the FFY in which
the DSH was paid. We requested comments from the public regarding the
format and the data that would be collected in this report.
In response to the October 8, 1998 notice, we received several
comments regarding the content and the availability of this report.
Many comments indicated that the reports should include more specific
details including the formula the State uses for qualifying the
hospital for the DSH payment, and the components used to calculate the
hospital-specific DSH payments.
In addition to these comments requesting that more detailed data
would be required on the DSH annual report, the Office of the Inspector
General (OIG) made recommendations about States' DSH programs based on
the findings from their State audits. The BIPA provided that the 175
percent hospital specific DSH limit would apply to qualifying public
hospitals in all States. The limit, allowing DSH payments of up to 175
percent of each hospital's cost of unreimbursed care, would apply for
two State fiscal years

[[Page 15854]]

beginning on the first day of the State fiscal year that begins after
September 30, 2002 and ends on the last day of the succeeding State
fiscal year.
The OIG has begun to monitor States' disproportionate share
hospital payments to determine whether the results from their reviews
of uncompensated care claimed by hospitals at selected States and their
review of enhanced payments and intergovernmental transfer of funds by
public hospitals to the States would support the need for increased DSH
reimbursements. To date, they have completed or are in the process of
completing audits in several States.
Based on current audit results, the OIG believes that DSH payments
presently are not always being retained and used by the public
hospitals and the DSH payments received are not always correctly
calculated.
Based upon the statutory requirement that States provide an annual
report to the Secretary describing the disproportionate share hospital
payments, each State must submit DSH expenditure information utilizing
an Excel format containing the mandatory requirements listed in
Addendum B.
States may submit their annual report electronically to
NIRT@cms.hhs.gov. These reports must be submitted by the end of the

first quarter of the FFY following the reporting FFY. Therefore, by
December 31, 2004, all FFY 2004 DSH reports must be sent to the CMS
Central Office at the following address: National Institutional
Reimbursement Team, CMS, CMSO, Mailstop: S3-13-15, 7500 Security
Boulevard, Baltimore, Maryland 21244-1850.

V. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995 (PRA), we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether OMB approves an information
collection, section 3506(c)(2)(A) of the PRA requires that we solicit
comment on the following issues:
The need for the information collection and its
usefulness in carrying out the proper functions of our agency.
The accuracy of our estimate of the information
collection burden.
The quality, utility, and clarity of the
information to be collected.
Recommendations to minimize the information
collection burden on the affected public, including automated
collection techniques.
The requirements associated with this notice are currently approved
under OMB approval number 0938-0746 (CMS-R-0266, Medicaid
Disproportionate Share Annual Report for Hospitals and Institutions),
with a current expiration date of October 30, 2005. However, as
reflected in this notice, we are proposing to modify the currently
approved requirements by providing a structured format for State
reporting and refining the currently approved collection requirements.
The format will not impose any additional burden.
If you comment on these information collection and recordkeeping
requirements, please mail copies directly to the following:

Centers for Medicare & Medicaid Services, Office of Strategic
Operations and Regulatory Affairs, Attn: John Burke (CMS-2062-N), Room
C5-13-28, 7500 Security Boulevard, Baltimore, MD 21244-1850;
and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attn: Brenda Aguilar, CMS Desk Officer (CMS-2062-N).

VI. Impact Statement

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 through 612,
requires a regulatory flexibility analysis for every rule subject to
proposed rulemaking procedures under the Administrative Procedure Act,
5 U.S.C. 553, unless we certify that the rule will not have a
significant economic impact on a substantial number of small entities.
For purposes of the RFA, States and individuals are not considered
small entities. However, providers with receipts ranging from less than
$5 million to less than $25 million depending on their provider type
are considered small entities (65 FR 69432, November 17, 2000). Due to
the various controlling statutes, the effects on providers are not a
result of any independent regulatory impact and not this notice. The
purpose of the notice is to simply announce the latest distributions as
required by the statute.
Additionally, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a notice may have a significant impact on
the operations of a substantial number of small rural hospitals. Such
an analysis must conform to the provisions of section 604 of the RFA.
For purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds.
The BBA and the BBRA set statutorily defined limits on the amount
of Federal share DSH expenditures available for FFYs 1998 through 2002.
The BIPA amended sections of the Act that set forth these statutorily
defined Federal DSH allotments. The following table displays our
estimates of the impact of changes to the Federal DSH allotments as a
result of BBA, BBRA, and BIPA.

Federal Cost (Savings)
[in billions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year 2001 2002 2003 2004 2005
----------------------------------------------------------------------------------------------------------------
BBA............................................ -2.8 -3.5 -4.0 -4.5 -5.0
BBRA........................................... * * * * *
BIPA........................................... 0.2 0.7 0.0 0.0 0.0
--------------
Total...................................... -2.6 -2.8 -4.0 -4.5 -5.0
----------------------------------------------------------------------------------------------------------------
* = < $50 million.

Based on these findings, the limits initially imposed by the BBA
and the BBRA will negatively impact the availability of FFP to States,
thus potentially negatively impacting the availability of Medicaid
expenditures to hospitals, especially IMDs. However, the BIPA reduces
the Federal savings, thus increasing the amount of Federal funding
available to States under the DSH program. While overall, the statute
still mandates some reduction in DSH

[[Page 15855]]

payments, we do not believe that this notice will have a significant
economic impact on a substantial number of small entities because it
reflects no new policies or procedures.
In section 202 of the Unfunded Mandates Reform Act requires that
agencies prepare an assessment of anticipated costs and benefits for
any rule that may result in an annual expenditure by State, local, or
tribal governments, in the aggregate, or by the private sector, of $110
million or more. This notice has no consequential effect on State,
local, or tribal governments, or the private sector, and will not
create an unfunded mandate.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget (OMB).
We have reviewed this notice under the threshold criteria of
Executive Order 13132, Federalism. We have determined that it does not
significantly affect the rights, roles, and responsibilities of States.

Addendum A

This addendum contains the charts 1 through 6 (including
associated keys) that are referred to in the preamble of this
notice.

Chart 1.--DSH Allotments for FY 1998 Through FY 2000--From Section
1902(f)(2) of the Social Security Act
[Key to Chart of the FFY 1998 Through 2000 DSH Allotments]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... FY 1998 DSH ALLOTMENTS Federal Share.
This column contains the FFY 1998 DSH
allotments from section 1923(f)(2) of
the Act, as amended.
Column C..................... FY 1999 DSH ALLOTMENTS Federal Share.
This column contains the FFY 1999 DSH
allotments from section 1923(f)(2) of
the Act, as amended.
Column D..................... FY 2000 DSH ALLOTMENTS Federal Share.
This column contains the FFY 1999 DSH
allotments from section 1923(f)(2) of
the Act, as amended.
------------------------------------------------------------------------

DSH Allotments for FY 1998 Through FY 2000--From Section 1902(f)(2) of the Social Security Act \*\
----------------------------------------------------------------------------------------------------------------
A B C D
----------------------------------------------------------------------------------------------------------------
FY 1998 DSH allotments TY 1999 DSH allotments FY 2000 DSH allotments
State Federal share Federal share Federal share
----------------------------------------------------------------------------------------------------------------
Alabama.............................. $293,000,000 269,000,000 248,000,000
Alaska............................... 10,000,000 10,000,000 10,000,000
Arizona.............................. 81,000,000 81,000,000 81,000,000
Arkansas............................. 2,000,000 2,000,000 2,000,000
California........................... 1,085,000,000 1,068,000,000 986,000,000
Colorado............................. 93,000,000 85,000,000 79,000,000
Connecticut.......................... 200,000,000 194,000,000 164,000,000
Delaware............................. 4,000,000 4,000,000 4,000,000
District of Columbia................. 23,000,000 23,000,000 32,000,000
Florida.............................. 207,000,000 203,000,000 197,000,000
Georgia.............................. 253,000,000 248,000,000 241,000,000
Hawaii............................... 0 0 0
Idaho................................ 1,000,000 1,000,000 1,000,000
Illinois............................. 203,000,000 199,000,000 193,000,000
Indiana.............................. 201,000,000 197,000,000 191,000,000
Iowa................................. 8,000,000 8,000,000 8,000,000
Kansas............................... 51,000,000 49,000,000 42,000,000
Kentucky............................. 137,000,000 134,000,000 130,000,000
Louisiana............................ 880,000,000 795,000,000 713,000,000
Maine................................ 103,000,000 99,000,000 84,000,000
Maryland............................. 72,000,000 70,000,000 68,000,000
Massachusetts........................ 288,000,000 282,000,000 273,000,000
Michigan............................. 249,000,000 244,000,000 237,000,000
Minnesota............................ 33,000,000 33,000,000 33,000,000
Mississippi.......................... 143,000,000 141,000,000 136,000,000
Missouri............................. 436,000,000 423,000,000 379,000,000
Montana.............................. 200,000 200,000 200,000
Nebraska............................. 5,000,000 5,000,000 5,000,000
Nevada............................... 37,000,000 37,000,000 37,000,000
New Hampshire........................ 140,000,000 136,000,000 130,000,000
New Jersey........................... 600,000,000 582,000,000 515,000,000
New Mexico........................... 5,000,000 9,000,000 9,000,000
New York............................. 1,512,000,000 1,482,000,000 1,436,000,000
North Carolina....................... 278,000,000 272,000,000 264,000,000
North Dakota......................... 1,000,000 1,000,000 1,000,000
Ohio................................. 382,000,000 374,000,000 363,000,000
Oklahoma............................. 16,000,000 16,000,000 16,000,000
Oregon............................... 20,000,000 20,000,000 20,000,000
Pennsylvania......................... 529,000,000 518,000,000 502,000,000
Rhode Island......................... 62,000,000 60,000,000 58,000,000
South Carolina....................... 313,000,000 303,000,000 262,000,000

[[Page 15856]]

South Dakota......................... 1,000,000 1,000,000 1,000,000
Tennessee............................ 0 0 0
Texas................................ 979,000,000 950,000,000 806,000,000
Utah................................. 3,000,000 3,000,000 3,000,000
Vermont.............................. 18,000,000 18,000,000 18,000,000
Virginia............................. 70,000,000 68,000,000 66,000,000
Washington........................... 174,000,000 171,000,000 166,000,000
West Virginia........................ 64,000,000 63,000,000 61,000,000
Wisconsin............................ 7,000,000 7,000,000 7,000,000
==========================
Wyoming.............................. 67,000 95,000 100,000
Total............................ 10,272,267,000 9,958,295,000 9,278,300,000
----------------------------------------------------------------------------------------------------------------
* DSH Allotments in section 1923(f)(2) of the Act as initially enacted by section 4721 of Public Law 105-33 and
amended as follows:
Section 601 of Public Law 105-78, for FY 1998 for MN
Sections 702-704 of Public Law 105-277, for FY 1999 for MN, NM, and WY, respectively.
Sections 601(a)(1)-(4) of Public Law 106-113, for FYs 2000-2002 for D.C., MN, NM, and WY, respectively.

Chart 2.--Final FY 2001 DSH Allotments
[Key to Chart of the FFY 2001 Final DSH Allotments]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... FY 2001 FEDERAL MEDICAL ASSISTANCE
PERCENTAGE (FMAP).
Column C..................... FY 2000 FEDERAL SHARE DSH ALLOTMENT
(FINAL). This column contains the Final
FFY 2000 DSH allotments from section
1923(f)(2) of the Act.
Column D..................... FFY 2000 DSH Allotment INCR. BY CPIU.
This column contains the FFY 2000 DSH
allotments in Column C increased by the
CPIU for that fiscal year.
Column E..................... ACTUAL TOTAL MAP FOR FY 2001. This column
contains the total computable medical
assistance expenditures, including DSH
expenditures for FFY 2001.
Column F..................... DSH TOTAL EXPENDITURES FOR FY 2001. This
column contains the actual total
computable DSH expenditures for FFY
2001.
Column G..................... ACTUAL TOTAL MAP NET OF DSH FY 2001. This
column contains the total computable
medical assistance expenditures, net of
DSH expenditures, for FFY 2001.
Column H..................... 12 PERCENT LIMIT (In FS). This column
contains the 12 Percent Limit; this is a
Federal share amount.
Column I..................... GREATER OF COL H OR COL C. This column
contains amount which is the greater of
Column H (the 12-percent limit) or
Column C (the Federal share FFY 2000 DSH
allotment).
Column J..................... LESSER OF COL I OR COL D. This column
contains the lesser of Column I or
Column D (the Federal share DSH
allotment for FFY 2000).
Column K..................... LOW-DSH STATES. This column indicates
``Special Rule'' for those States that
meet the Low-DSH criteria in determining
the FFY 2001 allotments, as contained in
section 1923(f)(5) of the Act.
Column L..................... LOW-DSH RULE STATES FY 2001 AMOUNT. This
column contains the FFY 2001 allotment
amounts for Low-DSH States; this amount
is equal to 1 percent of the State's
Total Medical Assistance expenditures
for 2001.
Column M..................... FY 2001 FS DSH ALLOTMENT (=GREATER OF COL
J OF COL L). The amount in this column
is equal to the greater of Column J or
Column L and represents the final
Federal Share DSH allotment.
------------------------------------------------------------------------

[[Page 15857]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.027

[[Page 15858]]

Chart 3.--Final 2002 Final DSH Allotments
[Key to the Chart of the Final FFY 2002 DSH Allotments]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... State.
Column B..................... FY 2002 FEDERAL MEDICAL ASSISTANCE
PERCENTAGE (FMAP).
Column C..................... FY 2001 FEDERAL SHARE DSH ALLOTMENT
(FINAL). This column contains the FFY
2001 DSH allotments from section
1923(f)(2) of the Act.
Column D..................... FFY 2001 DSH Allotment INCR. BY CPIU.
This column contains the FFY 2001 DSH
allotments in Column C increased by the
CPIU for that fiscal year.
Column E..................... ACTUAL TOTAL MAP FOR FY 2002. This column
contains the total computable medical
assistance expenditures, including DSH
expenditures for FFY 2002.
Column F..................... DSH TOTAL EXPENDITURES FOR FY 2002. This
column contains the actual total
computable DSH expenditures for FFY
2002.
Column G..................... ACTUAL TOTAL MAP NET OF DSH FY 2002. This
column contains the total computable
medical assistance expenditures, net of
DSH expenditures, for FFY 2001.
Column H..................... 12 PERCENT LIMIT (In FS). This column
contains the 12 Percent Limit; this is a
Federal share amount.
Column I..................... GREATER OF COL H OR COL C. This column
contains amount which is the greater of
Column H (the 12-percent limit) or
Column C (the Federal share FFY 2001 DSH
allotment).
Column J..................... LESSER OF COL I OR COL D. This column
contains the lesser of Column I or
Column D.
Column K..................... FY 2002 FS DSH ALLOTMENT (=COL J). The
amount in this column represents the
final Federal Share DSH allotment for
FFY 2002, and is equal to Column J.
------------------------------------------------------------------------

[[Page 15859]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.028

[[Page 15860]]

Chart 4.--Preliminary FY 2003 DSH Allotments
[Key to the Chart of the Preliminary FFY 2003 DSH Allotments]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... FY 2003 FEDERAL MEDICAL ASSISTANCE
PERCENTAGE (FMAP).
Column C..................... FY 2002 FEDERAL SHARE DSH ALLOTMENT
(FINAL). This column contains the FFY
2002 DSH allotments from the chart in
section 1923(f)(2) of the Act.
Column D..................... FFY 2002 DSH Allotment INCR. BY CPIU.
This column contains the FFY 2002 DSH
allotments in Column C increased by the
CPIU for that fiscal year.
Column E..................... 08/15/02 EST. OF TC MAP EXP. INCLUDING
DSH FOR FY 2003. This column contains
the August 2002 estimates of total
computable medical assistance
expenditures, including DSH expenditures
for FFY 2003.
Column F..................... 08/15/02 EST. OF TC DSH EXPENDITURES FOR
FY 2003. This column contains the August
2002 estimates of the total computable
DSH expenditures for FFY 2003.
Column G..................... 08/15/02 EST. OF TC MAP EXP. NET OF DSH
FY 2003. This column contains the total
computable medical assistance
expenditures, net of DSH expenditures,
for FFY 2003.
Column H..................... 12 PERCENT LIMIT (In FS). This column
contains the 12 Percent Limit; this is a
Federal share amount.
Column I..................... GREATER OF COL. H OR COL. C. This column
contains amount which is the greater of
Column H (the 12-percent limit) or
Column C (the Federal share FFY 2001 DSH
allotment).
Column J..................... LESSER OF COL. I OR COL. D. This column
contains the lesser of Column I or
Column D.
Column K..................... FY 2003 FS DSH ALLOTMENT (=COL. J). The
amount in this column represents the
preliminary Federal Share DSH allotment
for FFY 2003, and is equal to Column J.
------------------------------------------------------------------------

[[Page 15861]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.029

[[Page 15862]]

Chart 5.--Preliminary FY 2004 DSH Allotments
[Key to the Chart of the Preliminary FFY 2004 DSH Allotments]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... FY 2004 FEDERAL MEDICAL ASSISTANCE
PERCENTAGE (FMAP).
Column C..................... FY 2003 FEDERAL SHARE DSH ALLOTMENT. This
column contains the preliminary FFY 2003
DSH allotments.
Column D..................... FY 2004 FS DSH ALLOTMENT = COL. C x 1.16.
This column contains the FFY 2003 DSH
allotments in Column C increased by 16
percent.
------------------------------------------------------------------------

[[Page 15863]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.030

[[Page 15864]]

Chart 6.--FY 1999 DSH Payments as Reported as of August 31, 2000--Low-
DSH States Using ``1 Percent Test''
[Key to the Chart of the Low-DSH Determinations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... FY 1999 I/P HOSPITAL DSH Total
Computable. This column contains the
States' total computable FFY 1999
inpatient hospital DSH expenditures as
reported on the Form CMS-64 as reported
on the Form CMS-64 as of August 31,
2000.
Column C..................... FY 1999 MENTAL HEALTH DSH Total
Computable. This column contains the
total computable FFY 1999 mental health
facility DSH expenditures as reported on
the Form CMS-64 as of August 31, 2000.
Column D..................... TOTAL FY 1999 DSH Total Computable Col B
+ C. This column contains the total FFY
1999 DSH payments as reported on the
Form CMS-64 as of August 31, 2000
(calculated as the sum of Column B and
Column C).
Column E..................... FY 1999 MAP EXPENDITURES Total
Computable. This column contains the FFY
1999 total computable medical assistance
expenditures, including DSH payments.
Column F..................... TC DSH AS A PERCENT OF TC MAP Col D/E.
This column present the total computable
FFY 1999 DSH as a percentage of the FFY
1999 total computable medical assistance
expenditures, calculated as Column D
divided by Column E.
Column G..................... LOW-DSH STATES. (0 < Col F, Col F <
1%)FFY. This columns presents the Low-
DSH States. Low-DSH States are those
with a percentage entry in this column.
States that are not determined to be a
Low-DSH States are indicated by an ``N/
A'' entry in this column. Low-DSH States
are those whose entry in Column F is
greater than 0 but less than 1 percent.
------------------------------------------------------------------------

[[Page 15865]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.031

[[Page 15866]]

Chart 7.--FY 2000 DSH Payments as Reported as of August 31, 2003--Low-
DSH States Using ``3 Percent Test''
[Key to the Chart of the Low-DSH Determinations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... FY 2000 I/P HOSPITAL DSH Total
Computable. This column contains the
States' total computable FFY 2000
inpatient hospital DSH expenditures as
reported on the Form CMS-64 as reported
on the Form CMS-64 as of August 31,
2003.
Column C..................... FY 2000 MENTAL HEALTH DSH Total
Computable. This column contains the
total computable FFY 2000 mental health
facility DSH expenditures as reported on
the Form CMS-64 as of August 31, 2003.
Column D..................... TOTAL FY 2000 DSH Total Computable Col. B
+ C. This column contains the total FFY
2000 DSH payments as reported on the
Form CMS-64 as of August 31, 2003
(calculated as the sum of Column B and
Column C).
Column E..................... FY 2000 MAP EXPENDITURES Total
Computable. This column contains the FFY
2000 total computable medical assistance
expenditures, including DSH payments.
Column F..................... TC DSH AS A PERCENT OF TC MAP Col. D/E.
This column presents the total
computable FFY 2000 DSH as a percentage
of the FFY 2000 total computable medical
assistance expenditures, calculated as
Column D divided by Column E.
Column G..................... LOW-DSH STATES. (0 < Col. F, Col. F < 3%)
FFY. This columns presents the Low-DSH
States. Low-DSH States are those with a
percentage entry in this column. States
that are not determined to be Low-DSH
States are indicated by an ``N/A'' entry
in this column. Low-DSH States are those
whose entry in Column F is greater than
0 but less than 3 percent.
------------------------------------------------------------------------

[[Page 15867]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.032

[[Page 15868]]

Chart 8.--Final FY 1998 IMD DSH Limits
[Key to the Chart of the FFY 1998 IMD Limitations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... INPATIENT HOSPITAL SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the States' total computable FFY 1995
inpatient hospital DSH expenditures as
reported on the Form CMS-64.
Column C..................... IMD AND MENTAL HEALTH SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the total computable FFY 1995 mental
health facility DSH expenditures as
reported on the Form CMS-64 as of
January 1, 1997.
Column D..................... TOTAL INPATIENT & IMD & MENTAL HEALTH FY
95 DSH TOTAL COMPUTABLE, Col. B + C.
This column contains the total
computation of all inpatient hospital
DSH expenditures and mental health
facility DSH expenditures for FFY 1995
as reported on the Form CMS-64 as of
January 1, 1997 (representing the sum of
Column B and Column C).
Column E..................... APPLICABLE PERCENTAGE Col. C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided by
total computable all inpatient hospital
and mental health facility DSH
expenditures for FFY 1995 (the amount in
Column C divided by the amount in Column
D).
Column F..................... FY 1998 FEDERAL SHARE DSH ALLOTMENT. This
column contains the States' final FFY
2002 DSH allotments.
Column G..................... FFY 1998 FMAP.
Column H..................... FY 1998 DSH ALLOTMENT TOTAL COMPUTABLE
Col. F/G. This column contains FFY 1998
total computable DSH allotment
(determined as Column F/Column G).
Column I..................... APPLICABLE PERCENT OF FY 1998 DSH
ALLOTMENT. Col. E x H. This column
contains the applicable percent of FFY
1998 total computable DSH allotment
(calculated as Column E x Column H).
Column J..................... FY 1998 IMD DSH LIMIT TOTAL COMPUTABLE
Lesser of Col. C or I. The column
contains the lesser of the lesser of
Column I or C.
Column K..................... FY 1998 IMD DSH LIMIT FEDERAL SHARE. This
column contains the total computable IMD
DSH Limit from Col. J and converts that
amount into a Federal share (calculated
as Col. G x Col. J).
------------------------------------------------------------------------

[[Page 15869]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.040

[[Page 15870]]

Chart 9.--Final FY 1999 IMD DSH Limits
[Key to the Chart of the FFY 1999 IMD Limitations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... INPATIENT HOSPITAL SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the States' total computable FFY 1995
inpatient hospital DSH expenditures as
reported on the Form CMS-64.
Column C..................... IMD AND MENTAL HEALTH SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the total computable FFY 1995 mental
health facility DSH expenditures as
reported on the Form CMS-64 as of
January 1, 1997.
Column D..................... TOTAL INPATIENT & IMD & MENTAL HEALTH FY
95 DSH TOTAL COMPUTABLE, Col. B + C.
This column contains the total
computation of all inpatient hospital
DSH expenditures and mental health
facility DSH expenditures for FFY 1995
as reported on the Form CMS-64 as of
January 1, 1997 (representing the sum of
Column B and Column C).
Column E..................... APPLICABLE PERCENTAGE Col. C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided by
total computable all inpatient hospital
and mental health facility DSH
expenditures for FFY 1995 (the amount in
Column C divided by the amount in Column
D).
Column F..................... FY 1999 FEDERAL SHARE DSH ALLOTMENT. This
column contains the States' final FFY
1999 DSH allotments.
Column G..................... FFY 1999 FMAP.
Column H..................... FY 1999 DSH ALLOTMENT TOTAL COMPUTABLE
Col. F/G. This column contains FFY 1999
total computable DSH allotment
(determined as Column F/Column G).
Column I..................... APPLICABLE PERCENT OF FY 1999 DSH
ALLOTMENT. Col. E x H. This column
contains the applicable percent of FFY
1999 total computable DSH allotment
(calculated as Column E x Column H).
Column J..................... FY 1999 IMD DSH LIMIT TOTAL COMPUTABLE
Lesser of Col. C or I. The column
contains the lesser of the lesser of
Column I or C.
Column K..................... FY 1999 IMD DSH LIMIT FEDERAL SHARE. This
column contains the total computable IMD
DSH Limit from Col. J and converts that
amount into a Federal share (calculated
as Col. G x Col. J).
------------------------------------------------------------------------

[[Page 15871]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.033

[[Page 15872]]

Chart 10.--Final FY 2000 IMD DSH Limits
[Key to the Chart of the FFY 2000 IMD Limitations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... INPATIENT HOSPITAL SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the States' total computable FFY 1995
inpatient hospital DSH expenditures as
reported on the Form CMS-64.
Column C..................... IMD AND MENTAL HEALTH SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the total computable FFY 1995 mental
health facility DSH expenditures as
reported on the Form CMS-64 as of
January 1, 1997.
Column D..................... TOTAL INPATIENT & IMD & MENTAL HEALTH FY
95 DSH TOTAL COMPUTABLE, Col. B + C.
This column contains the total
computation of all inpatient hospital
DSH expenditures and mental health
facility DSH expenditures for FFY 1995
as reported on the Form CMS-64 as of
January 1, 1997 (representing the sum of
Column B and Column C).
Column E..................... APPLICABLE PERCENTAGE Col. C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided by
total computable all inpatient hospital
and mental health facility DSH
expenditures for FFY 1995 (the amount in
Column C divided by the amount in Column
D).
Column F..................... FY 2000 FEDERAL SHARE DSH ALLOTMENT. This
column contains the States' final FFY
2000 DSH allotments.
Column G..................... FFY 2000 FMAP.
Column H..................... FY 2000 DSH ALLOTMENT TOTAL COMPUTABLE
Col. F/G. This column contains FFY 2000
total computable DSH allotment
(determined as Column F/Column G).
Column I..................... APPLICABLE PERCENT OF FY 2000 DSH
ALLOTMENT. Col. E x H. This column
contains the applicable percent of FFY
2000 total computable DSH allotment
(calculated as Column E x Column H).
Column J..................... FY 2000 IMD DSH LIMIT TOTAL COMPUTABLE
Lesser of Col. C or I. The column
contains the lesser of the lesser of
Column I or C.
Column K..................... FY 2000 IMD DSH LIMIT FEDERAL SHARE. This
column contains the total computable IMD
DSH Limit from Col. J and converts that
amount into a Federal share (calculated
as Col. G x Col. J).
------------------------------------------------------------------------

[[Page 15873]]

[GRAPHIC] [TIFF OMITTED] TN26MR04.034

[[Page 15874]]

Chart 11.--Final FY 2001 IMD DSH Limits
[Key to the Chart of the FFY 2001 IMD Limitations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... INPATIENT HOSPITAL SERVICES FY 95 DSH
TOTAL COMPUTABLE. This Column contains
the States' total computable FFY 1995
inpatient hospital DSH expenditures as
reported on the Form CMS-64.
Column C..................... IMD AND MENTAL HEALTH SERVICES FY 95 DSH
TOTAL COMPUTABLE. This Column contains
the total computable FFY 1995 mental
health facility DSH expenditures as
reported on the Form CMS-64 as of
January 1, 1997.
Column D..................... TOTAL INPATIENT & IMD & MENTAL HEALTH FY
95 DSH TOTAL COMPUTABLE, Col. B + C.
This Column contains the total
computation of all inpatient hospital
DSH expenditures and mental health
facility DSH expenditures for FFY 1995
as reported on the Form CMS-64 as of
January 1, 1997 (representing the sum of
Column B and Column C).
Column E..................... APPLICABLE PERCENTAGE Col. C/D. This
Column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided by
total computable all inpatient hospital
and mental health facility DSH
expenditures for FFY 1995 (the amount in
Column C divided by the amount in Column
D).
Column F..................... FY 2001 FEDERAL SHARE DSH ALLOTMENT. This
Column contains the States' final FFY
2001 DSH allotments.
Column G..................... FFY 2001 FMAP.
Column H..................... FY 2001 DSH ALLOTMENT TOTAL COMPUTABLE
Col. F/G. This Column contains FFY 2001
total computable DSH allotment
(determined as Column F/Column G).
Column I..................... APPLICABLE PERCENT OF FY 2001 DSH
ALLOTMENT. Col. E x H. This Column
contains the applicable percent of FFY
2001 total computable DSH allotment
(calculated as Column E x Column H).
Column J..................... FY 2001 IMD DSH LIMIT TOTAL COMPUTABLE
Lesser of Col. C or I. The Column
contains the lesser of the lesser of
Column I or C.
Column K..................... FY 2001 IMD DSH LIMIT FEDERAL SHARE, Col.
G x J. This Column contains the total
computable IMD DSH Limit from Col. J and
converts that amount into a Federal
share (calculated as Col. G x Col. J).
------------------------------------------------------------------------

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[[Page 15876]]

Chart 12.--Final FFY 2002 IMD DSH Limits
[Key to the Chart of the FFY 2002 IMD Limitations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... INPATIENT HOSPITAL SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the States' total computable FFY 1995
inpatient hospital DSH expenditures as
reported on the Form CMS-64.
Column C..................... IMD AND MENTAL HEALTH SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the total computable FFY 1995 mental
health facility DSH expenditures as
reported on the Form CMS-64 as of
January 1, 1997.
Column D..................... TOTAL INPATIENT & IMD & MENTAL HEALTH FY
95 DSH TOTAL COMPUTABLE, Col. B + C.
This column contains the total
computation of all inpatient hospital
DSH expenditures and mental health
facility DSH expenditures for FFY 1995
as reported on the Form CMS-64 as of
January 1, 1997 (representing the sum of
Column B and Column C).
Column E..................... APPLICABLE PERCENTAGE Col. C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided by
total computable all inpatient hospital
and mental health facility DSH
expenditures for FFY 1995 (the amount in
Column C divided by the amount in Column
D).
Column F..................... FY 2002 FEDERAL SHARE DSH ALLOTMENT. This
column contains the States' final FFY
2002 DSH allotments.
Column G..................... FFY 2002 FMAP.
Column H..................... FY 2002 DSH ALLOTMENT TOTAL COMPUTABLE
Col. F/G. This column contains FFY 2002
total computable DSH allotment
(determined as Column F/Column G).
Column I..................... APPLICABLE PERCENT OF FY 2002 DSH
ALLOTMENT. Col. E x H. This column
contains the applicable percent of FFY
2002 total computable DSH allotment
(calculated as Column E x Column H).
Column J..................... FY 2002 IMD DSH LIMIT TOTAL COMPUTABLE
Lesser of Col. C or I. The column
contains the lesser of the lesser of
Column I or C.
Column K..................... FY 2002 IMD DSH LIMIT FEDERAL SHARE, Col.
G x J. This column contains the total
computable IMD DSH Limit from Col. J and
converts that amount into a Federal
share (calculated as Col. G x Col. J).
------------------------------------------------------------------------

[[Page 15877]]

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[[Page 15878]]

Chart 13.--Preliminary FY 2003 IMD DSH Limits
[Key to the Chart of the FFY 2003 IMD Limitations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... INPATIENT HOSPITAL SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the States' total computable FFY 1995
inpatient hospital DSH expenditures as
reported on the Form CMS-64.
Column C..................... IMD AND MENTAL HEALTH SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the total computable FFY 1995 mental
health facility DSH expenditures as
reported on the Form CMS-64 as of
January 1, 1997.
Column D..................... TOTAL INPATIENT & IMD & MENTAL HEALTH FY
95 DSH TOTAL COMPUTABLE, Col. B + C.
This column contains the total
computation of all inpatient hospital
DSH expenditures and mental health
facility DSH expenditures for FFY 1995
as reported on the Form CMS-64 as of
January 1, 1997 (representing the sum of
Column B and Column C).
Column E..................... APPLICABLE PERCENTAGE Col. C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided by
total computable all inpatient hospital
and mental health facility DSH
expenditures for FFY 1995 (the amount in
Column C divided by the amount in Column
D).
Column F..................... FY 2003 FEDERAL SHARE DSH ALLOTMENT. This
column contains the States' preliminary
FFY 2003 DSH allotments.
Column G..................... FFY 2003 FMAP.
Column H..................... FY 2003 DSH ALLOTMENT TOTAL COMPUTABLE
Col. F/G. This column contains FFY 2003
total computable DSH allotment
(determined as Column F/Column G).
Column I..................... APPLICABLE PERCENT OF FY 2003 DSH
ALLOTMENT. Col. E x H. This column
contains the applicable percent of FFY
2003 total computable DSH allotment
(calculated as Column E x Column H).
Column J..................... FY 2003 IMD DSH LIMIT TOTAL COMPUTABLE
Lesser of Col. C or I. The column
contains the lesser of Column I or C.
Column K..................... FY 2003 IMD DSH LIMIT FEDERAL SHARE, Col.
G x J. This column contains the total
computable IMD DSH Limit from Col. J and
converts that amount into a Federal
share (calculated as Col. G x Col. J).
------------------------------------------------------------------------

[[Page 15879]]

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[[Page 15880]]

Chart 14.--Preliminary FY 2004 IMD DSH Limits
[Key to the Chart of the FFY 2004 IMD Limitations]
------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... STATE.
Column B..................... INPATIENT HOSPITAL SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the States' total computable FFY 1995
inpatient hospital DSH expenditures as
reported on the Form CMS-64.
Column C..................... IMD AND MENTAL HEALTH SERVICES FY 95 DSH
TOTAL COMPUTABLE. This column contains
the total computable FFY 1995 mental
health facility DSH expenditures as
reported on the Form CMS-64 as of
January 1, 1997.
Column D..................... TOTAL INPATIENT & IMD & MENTAL HEALTH FY
95 DSH TOTAL COMPUTABLE, Col. B + C.
This column contains the total
computation of all inpatient hospital
DSH expenditures and mental health
facility DSH expenditures for FFY 1995
as reported on the Form CMS-64 as of
January 1, 1997 (representing the sum of
Column B and Column C).
Column E..................... APPLICABLE PERCENTAGE Col. C/D. This
column contains the ``applicable
percentage'' representing the total
computable FFY 1995 mental health
facility DSH expenditures divided by
total computable all inpatient hospital
and mental health facility DSH
expenditures for FFY 1995 (the amount in
Column C divided by the amount in Column
D).
Column F..................... FY 2004 FEDERAL SHARE DSH ALLOTMENT. This
column contains the States' preliminary
FFY 2004 DSH allotments.
Column G..................... FFY 2004 FMAP.
Column H..................... FY 2004 DSH ALLOTMENT TOTAL COMPUTABLE
Col. F/G. This column contains FFY 2004
total computable DSH allotment
(determined as Column F/Column G).
Column I..................... APPLICABLE PERCENT OF FY 2004 DSH
ALLOTMENT. Col. E x H. This column
contains the applicable percent of FFY
2004 total computable DSH allotment
(calculated as Column E x Column H).
Column J..................... FY 2004 IMD DSH LIMIT TOTAL COMPUTABLE
Lesser of Col. C or I. The column
contains the lesser of the lesser of
Column I or C.
Column K..................... FY 2004 IMD DSH LIMIT FEDERAL SHARE, Col.
G x J. This column contains the total
computable IMD DSH Limit from Col. J and
converts that amount into a Federal
share (calculated as Col. G x Col. J).
------------------------------------------------------------------------

[[Page 15881]]

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[[Page 15882]]

Addendum B: General Instructions and Mandatory Hospital DSH Reporting
Requirements

States are required to submit, at least annually, DSH
expenditure information by December 31 of each year for the prior
Federal fiscal year (FFY). For example, FFY 2004 reports should be
submitted electronically to CMS central office no later than
December 31, 2004. Total DSH expenditures reported on this form must
reflect the total DSH expenditures reported on the form CMS 64-9D
for that year. States must use an Excel spreadsheet format, as
specified in Addendum C.

------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... Hospital Name/City Location.
Column B..................... Medicaid Provider Number.
Column C..................... Type of Hospital. Indicate if it is an
acute, psychiatric, teaching,
children's, rehabilitative or other. If
other, specify type.
Column D..................... Type of Hospital Ownership. Indicate
whether it is a privately owned and
operated facility, State government
owned or operated facility, non-State
government owned or operated facility or
a facility owned or operated by the IHS
or tribal government.
Column E..................... Total Uncompensated Care. Indicate the
total of the cost of services to
Medicaid patients, less the amount paid
by the State under the non-DSH payment
provisions of the State plan and the
cost of services to uninsured patients,
less any cash payments made by them for
the FFY being reported.
Column F..................... Total Medicaid Revenue. Indicate the
total Medicaid revenue paid to the
hospital for regular Medicaid payments,
DSH payments and supplemental payments
for the FFY being reported.
------------------------------------------------------------------------

(Please see Addendum C for spreadsheet format and a sample
spreadsheet.)

Addendum C: The Formatting Requirements for Submission of the Annual
DSH Report

Excel Spreadsheet Format Requirements and Sample Spreadsheet

The following is the format for and a sample of the DSH report
that States must submit beginning with FFY 2004:

Part I. Definition of Uncompensated Care

Indicate the components and methodology used
by the State to calculate uncompensated care.

Part II. FFY (Insert Year Reported)

------------------------------------------------------------------------
Column Description
------------------------------------------------------------------------
Column A..................... Hospital Name/City Location.
Column B..................... Medicaid Provider Number.
Column C..................... Type of Hospital. Indicate if it is an
acute, psychiatric, teaching,
children's, rehabilitative or other. If
other, specify type.
Column D..................... Type of Hospital Ownership. Indicate
whether it is a privately owned and
operated facility, State government
owned or operated facility, non-State
government owned or operated facility or
a facility owned or operated by the IHS
or tribal government.
Column E..................... Total Uncompensated Care. Indicate the
total of the cost of services to
Medicaid patients, less the amount paid
by the State under the non-DSH payment
provisions of the State plan and the
cost of services to uninsured patients,
less any cash payments made by them for
the FFY being reported.
Column F..................... Total Medicaid Revenue. Indicate the
total Medicaid revenue paid to the
hospital for regular Medicaid payments,
DSH payments and supplemental payments
for the FFY being reported.
Column F1.................... Regular Service Payment. Indicate the
regular Medicaid payments paid to the
hospital, not including any DSH or
supplemental payments for the FFY being
reported.
Column F2.................... DSH Payment. Indicate the total DSH
payments paid to the hospital for the
FFY being reported. The payments and
prior period adjustments.
Column F3.................... Non-DSH Supplemental Payment. Indicate
any Medicaid supplemental payments paid
to the Sample Excel Spreadsheet.
------------------------------------------------------------------------

[[Page 15883]]

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[[Page 15884]]

Authority: Section 1923(a)(2), (f), and (h) of the Social
Security Act (42 U.S.C. 1396r-4(a)(2), (f), and (h), and Public Law
105-33).

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)

Dated: December 28, 2002.
Thomas A. Scully,
Acting Administrator, Center for Medicare and Medicaid Services.
Dated: December 2, 2003.
Tommy G. Thompson,
Secretary.

[FR Doc. 04-6834 Filed 3-25-04; 8:45 am]

BILLING CODE 4120-01-P