Medicaid advisory panel seeks to change disproportionate share hospital calculations

A Medicaid advisory panel confirmed it is trying to reverse the effects of a previous court ruling so that Medicaid disproportionate share hospital payments do not pay for costs paid by third-party payers, such as Medicare and private insurance.

This was a recommendation that was in the Medicaid and CHIP Payment and Access Commission’s June report to Congress that the panel approved April 11.

The recommendation pertains to the payments hospitals receive for providing care to Medicaid-eligible patients. These payments are limited to a hospital's uncompensated care costs for Medicaid and uninsured patients.

A final rule CMS issued in March 2017 stipulated that uncompensated care costs include costs for Medicaid-eligible individuals that remain after accounting for payments to hospitals on behalf of Medicaid-eligible individuals, including Medicare and other third-party payments.

However, a federal court ruling last year said payments from Medicare and private insurance on behalf of Medicaid-eligible patients can't be used in determining Medicaid disproportionate share hospital payments.

Hospitals now may receive Medicaid disproportionate share hospital payments for costs that third-party payers already made, according to MACPAC.

The Medicaid panel seeks to reverse the court decision.


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