4 things to know about federal hospital payments for low-income, uninsured patients

Medicaid disproportionate share hospital payments to hospitals covered 51 percent of uncompensated care costs in 2014, according to a report released July 29 by the U.S. Government Accountability Office.

For the report, researchers examined state audits with information about hospitals that received DSH payments in 2014. 

Four things to know about these payments, based on the report:

1. Most uncompensated care costs were from caring for the uninsured. In 2014, costs for serving uninsured patients accounted for 68 percent of total uncompensated care costs among hospitals receiving DSH payments. The rest (32 percent) was the difference between a state's Medicaid reimbursement and hospitals' costs for serving Medicaid beneficiaries.

2. Total payments varied. In 19 states, DSH payments to hospitals in 2014 totaled at least $200 million. Payments in 15 states were $500,000 to $199 million.

3. The share of payments relative to total Medicaid payments also varied. Federal officials found that DSH payments accounted for nearly all (97 percent) of Medicaid payments to DSH hospitals in Maine in 2014. In Tennessee, DSH payments only comprised 0.7 percent of Medicaid payments to DSH hospitals.

4. Proposed disproportionate share payment cuts are slated to begin in October. The ACA required supplemental Medicaid payments for hospitals that serve a disproportionate share of low-income patients to be reduced according to an annual schedule, assuming uncompensated care costs would decrease as the number of insured people increased under the health law. A $4 billion reduction in DSH payments is scheduled for the Oct. 1 start of fiscal year 2020.

Read the full GAO report here.


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