Disparities in Tennessee Medicaid Hospital Reimbursements Cause Stir

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Tennessee hospital executives are questioning a Medicaid "enhanced coverage fee" after finding out some insurance contractors for the state's Medicaid program pay some hospitals more than four times as much as other hospitals for outpatient procedures, according to a Tennessean report.

Average TennCare reimbursements during 2010 varied due to the patient mix and treatments provided, according to the report. Hospitals with trauma centers or neonatal intensive care units provide more expensive treatments and consequently receive higher reimbursements.

However, several hospitals complained about payment disparities from TennCare's Medicaid managed care organizations. The Tennessee Hospital Association hired a consulting firm to analyze the reimbursements, and the firm found that some hospitals received 60 percent of the Medicare rate, and other hospitals received more than four times the Medicare rate, according to the report.

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For example, TennCare reimbursed Methodist University Hospital in Memphis an average of $252 per Medicaid patient for an outpatient visit in 2010, while its competitor Baptist Memorial Hospital received an average of $647. Saint Thomas Hospital in Nashville received an average payment of $508 per Medicaid outpatient visit, while Williamson Medical Center in Franklin was reimbursed $55 per patient on average.

Tennessee hospitals leverage a 3.5 percent provider fee on their patient revenue to receive more in matching federal money for Medicaid, but many hospital executives argued other facilities are gaining far more than others. THA President Craig Becker said a solution to fix the discrepancies, in which 25 percent of state hospitals would receive lower reimbursements and 75 percent of hospitals would receive higher payments, is in progress, according to the report.

More Articles on Hospital Medicaid Reimbursements:

Report: Safety-Net Hospitals Need Increased Medicaid Rates

New Hampshire Ordered to Give Notice on Medicaid Hospital Reimbursements

How Should Hospitals Work Around Medicaid Payment Cuts This Year?

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