CMS Pub. 100-04, ch. 3, § 20.3.2.1

Hospital (DSH) Thresholds and Adjustments

(Rev. 1, 10-01-03)

The new FY 2001 operating standardized amounts are effective April 1, 2001, as required by

§301 of BIPA 2000 (P.L. 106-554), and the new DSH thresholds and adjustments are

required by §211 of BIPA 2000. In conjunction with the new standardized amount, the new

capital rates and outlier adjustment factor thresholds are effective April 1, 2001.

The following standardized amounts effective for discharges occurring on or after April 1,

2001, and before October 1, 2001, are:

Final FY 2001 Operating Rates

Designation Large Urban

Areas

Large Urban

Areas

Other Areas Other Areas

Labor-Related

Nonlabor-Related

Labor-Related

Nonlabor-Related

+National $2,925.82 $1,189.26 $2,879.51 $1,170.43

National PR $2,900.64 $1,179.02 $2,900.64 $1,179.02

Puerto Rico $1,402.79 $564.66 $1,380.58 $555.72

SCHs $2,895.02 $1,176.74 $2,849.20 $ 1,158.11

Final FY 2001 Capital Rates

National $380.85

Puerto Rico $184.61

Due to the changes to the standardized amounts, CMS recalculated the fixed loss cost outlier

threshold applicable for discharges on or after April 1, 2001, and before October 1, 2001.

The new thresholds are equal to the prospective payment rate for the DRG plus the IME and

DSH payments plus $16,350 ($14,940 for hospitals that have not yet entered the prospective

payment system for capital-related costs).

In addition, §211 of BIPA 2000 revised the thresholds by which certain classes of hospitals

qualify for the disproportionate share adjustment, effective for discharges occurring on or

after April 1, 2001. Section 211 also revised the adjustment computations for these

hospitals.

The specific changes are identified below.

Hospital Type Qualifying DSH

Percent

Adjustment Computation

Urban Hospitals

0-99 Beds ≥15%, <19.3%

≥19.3%

2.5% + [.65 x (DSH pct.-15)]

5.25%

100+ Beds (No Change in Law) ≥15%,<20.2%

≥20.2%

2.5% + [.65 x (DSH pct.-15%)]

5.88% + [.825 x (DSH pct.-20.2%)]

Rural Hospitals

Sole Community Hospitals (SCH) ≥15%, <19.3%

≥19.3%,<30%

≥30%

2.5% + [.65 x (DSH pct.-15%)]

5.25%

10%

Rural Referral Centers (RRC) ≥15%,<19.3%

≥19.3%,<30%

≥30%

2.5% + [.65 x (DSH pct.-15%)]

5.25%

5.25% + [.6 x (DSH pct.-30%)]

Both SCH and RRC ≥15% higher of SCH or RRC adjustment

Other Rural Hospitals

0-499Beds ≥15%,<19.3%

≥19.3%

2.5% + [.65 x (DSH pct.-15%)]

5.25%

500+ Beds (No Change in Law) ≥15%,<20.2%

≥20.2%

2.5% + [.65 x (DSH pct.-15%)]

5.88% + [.825 x (DSH pct. -20.2%)]

These new rates as well as changes to the DSH adjustments are incorporated into Pricer 01.2.

The formulas are spelled out in the statute.