The South Carolina Department of Health and Human Services (SCDHHS), pursuant to the requirements of Section 1902(a)(13)(A) of the Social Security Act, gives notice of the following proposed actions regarding its methods and standards for establishing Medicaid Disproportionate Share Hospital (DSH) payments to qualifying DSH hospitals and updating swing bed hospital and administrative day rates.

Pending any new federal legislation, implementation of the DSH Patient Protection and Affordable Care Act (ACA) reduction will not occur until federal fiscal year (FFY) 2028 (specifically, the period beginning Oct. 1, 2027, and ending Sept. 30, 2028).

Proposed DSH Changes Effective for the Oct. 1, 2026-Sept. 30, 2027, Payment Period

• SCDHHS proposes to use the hospital fiscal year ending 2025 base year cost reporting period to calculate the interim DSH payments for the Oct. 1, 2026-Sept. 30, 2027, DSH payment period. The agency will continue to use the Dec. 19, 2008, final rule (Federal Register/Vol. 73, No. 245) relating to the audits of the Medicaid DSH payment plans and the Dec. 3, 2014, final rule (Federal Register/Vol. 79, No. 232) relating to the Medicaid program DSH payments uninsured definition.
• SCDHHS proposes to update the inflation rate used to trend the DSH base year cost to the end of the 2025 calendar year.
• SCDHHS does not anticipate expending 100% of its FFY 2027 Medicaid DSH allotment to qualifying DSH-eligible hospitals during the Medicaid State Plan rate year.

Proposed Inpatient Hospital Reimbursement Changes Effective Oct. 1, 2026

• The agency proposes to update the inpatient hospital swing bed and administrative day rates based on the Oct. 1, 2026, redetermination of nursing facility payment rates.

For DSH changes, SCDHHS proposes to implement the first three bullet points to calculate the FFY 2027 DSH payments based on the use of the most recent cost reporting period data available (hospital fiscal year 2025) and updated DSH allotment amounts.

For inpatient hospital changes, SCDHHS proposes to update the swing bed and administrative day rates effective Oct. 1, 2026, based on the redetermination of nursing facility payment rates effective Oct. 1, 2026.

As a result of the proposed actions listed above, the annual projected cost increase, in total dollars, for swing bed and administrative day rates are expected to be immaterial. SCDHHS is unable to project the cost increase for DSH payments at this time since FFY 2027 DSH allotments have not been published by the Centers for Medicare and Medicaid Services as of the date of this notice.

Copies of this notice are available at each South Carolina Healthy Connections Medicaid county office and at www.scdhhs.gov for public review. Additional information concerning the actions above are available upon request at the address cited below.

Written comments may be sent to SCDHHS, Division of Acute Care/Ancillary Reimbursements, P.O. Box 8206, Columbia, S.C. 29202-8206. Comments may also be submitted to comments@scdhhs.gov. All comments must be received by Sept. 28, 2026.

Any written comments submitted may be reviewed by the public at SCDHHS, Division of Acute Care/Ancillary Reimbursements, Room 400-52, 1801 Main Street, Columbia, S.C., Monday through Friday between 9 a.m. and 5 p.m.

Notice of Non-Discrimination

The South Carolina Department of Health and Human Services (SCDHHS) complies with applicable federal civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability, or sex. SCDHHS does not exclude people or treat them differently because of race, color, national origin, age, disability, or sex.

SCDHHS provides free aids and services to people with disabilities, such as qualified sign language interpreters and written information in other formats (large print, braille, audio, accessible electronic formats, other formats). We provide free language services to people whose primary language is not English, such as qualified interpreters and information written in other languages. If you need these services, please contact the Americans with Disabilities Act (ADA)/Civil Rights Official by mail at: PO Box 8206, Columbia, SC 29202-8206, by phone at: 1-888-549-0820 (TTY: 1-888-842-3620), or by email at: civilrights@scdhhs.gov .

If you believe SCDHHS has failed to provide these services or discriminated in another way on the basis of race, color, national origin, age, disability, or sex, you can file a grievance with the Civil Rights Official using the contact information provided above. You can file a grievance in person, by mail, or via email. If you need help filing a grievance, we are available to help you.

You can also file a civil rights complaint with the U.S. Department of Health and Human Services, Office for Civil Rights, electronically through the Office for Civil Rights Complaint Portal, available at https://ocrportal.hhs.gov/ocr/portal/lobby.jsf or by mail or phone at: U.S. Department of Health and Human Services, 200 Independence Avenue, SW, Room 509F, HHH Building, Washington, D.C. 20201 or by phone at: 800-368-1019, 800-537-7697 (TDD). Complaint forms are available at http://www.hhs.gov/ocr/office/file/index.html.

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