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December 30, 2018

CMS Withdraws FAQs 33 & 34 Amidst Ongoing DSH Litigation

As of December 30, 2018, CMS has withdrawn its policy on the inclusion of third party payments in calculating the disproportionate share hospital (DSH) limit. FAQs 33 & 34 require that states include commercial and Medicare payments, respectively, in their DSH limit methodology. CMS has removed these FAQs from its 2010 DSH guidance, noting that it will accept revised DSH audits that cover hospital services furnished before June 2, 2017. CMS also confirmed that it is not currently enforcing the 2017 final rule that adopted the FAQs, citing the DC Circuit’s nationwide injunction in Children’s Hospital Ass’n of Texas v. Azar. For a breakdown of the relevant issues in the DC Circuit case and the status of various lawsuits, refer to our comprehensive case chart.