NAVEOS Synopsis of the CMS’ FFY 2018 IPPS Final Rule Impact on DSH Hospitals

“CMS has officially moved to transition to Worksheet S-10. It is very important to review your 2014 -2016 S-10’s and make preparations for 2017 when you will need to document auditable detail Charity Care and Bad Debt data” – Mike Sabo


On August 2, 2017, the Centers for Medicare/Medicaid (CMS) issued the Inpatient Prospective Payment System (IPPS) Final Rule for Federal Fiscal Year (FFY) 2018. The Factor 3 Uncompensated Care Pool distribution is significantly different from last year’s FFY 2017 Final Rule. Given the changes that are cited, NAVEOS has outlined the important DSH related items for hospitals, with respect to the FFY 2018 Final Rule.

Of primary importance to DSH hospitals, CMS has memorialized the start of the 3-year transition to distribute DSH Uncompensated Care Pool using Worksheet S-10, which was introduced in the FFY 2018 Propose Rule (April 2017). For FFY 2018 the Days Proxy will represent 2/3 and Worksheet S-10 1/3. FFY 2019 Worksheet S-10 will be 2/3 and 1/3 Days Proxy. Worksheet S-10 will be utilized for 100% of the Factor 3 calculation in FFY 2020.

It is also critical to note, CMS is allowing Hospitals to submit amendments on their FY 2014 and FY 2015 Worksheet S-10. These amendments must be submitted to CMS no later than September 30, 2017. Mike Sabo, NAVEOS Sr. VP of Regulatory Affairs, Product Strategy & Development, advises, “With CMS officially transitioning to Worksheet S-10, it is very important to review your HFY’s 2014 -2016 S-10’s and make preparations for 2017, when you will need to maintain auditable detail to support the Charity Care and Bad Debt data.”


1) Worksheet S-10 Line 30 will be used for Factor 3

2) FY 2018 Uncompensated DSH Pool will be $6.766 Billion which is an Increase of $800 million from FY 2017.

3) CMS introduced a reduction to Factor 3 Uncompensated Care Costs (UCC), IF a hospitals 2014 ratio of UCC to Total Costs exceeds 50%.

4) CMS will instruct MAC’s to give FY 2014 – FY 2016 UCC “further scrutiny after submission” of amended Worksheet S-10.


Based on the Final Rule, Providers should take the following actions:

1) Review their HFY 2014 and HFY 2015 Worksheet S-10. …

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