Medicaid supplemental payments, which are made partially by the state and matched by the federal government, are classified into two general categories: disproportionate share hospital payments and non-DSH payments. DSH payments are payments to hospitals that serve a high number of Medicaid patients to cover the consequentially higher uncompensated costs. Non-DSH payments are other supplemental payments that states make to hospitals, nursing homes and other providers based on what Medicare would pay for a comparable service.
Of the $32 billion in Medicaid supplemental payments in FY 2010, $17.6 billion were DSH payments, and $14.4 billion were non-DSH payments. The non-DSH payments were the biggest cause in the increase, as they were more than $8 billion higher during 2010 than during 2006.
The GAO concluded that while Medicaid supplemental payments help hospitals and other providers ensure medical services are available to Medicaid beneficiaries, payment transparency is lacking. Non-DSH supplemental payments, in particular, need better reporting, and the GAO provided the study to HHS and CMS to help states improve their Medicaid supplemental payment reporting.
More Articles on Medicaid Supplemental Payments:
Medicaid Expansion Concerns Amid Looming DSH Cuts: Q&A With NAPH CEO Bruce Siegel
