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New MACPAC Study Evaluates Medicaid, Medicare Payments

Medicaid payments to hospitals are comparable to or even higher than Medicare payments. Or at least they are once supplemental Medicaid payments are included. So concludes a new study by the Medicaid and CHIP Payment and Access Commission, a non-partisan legislative branch agency that advises the states, Congress, and the administration on Medicaid and CHIP payment and access issues. In what MACPAC bills as the “first-ever study to construct a state-level payment index to compare fee-for-service inpatient hospital payments across states and to benchmark Medicaid payments to other payers such as Medicare,” the study found that Across states, base Medicaid payment for inpatient services varies considerably, ranging from 49 percent to 169 percent of the national average. This variation is … Read More

Posted in Medicaid supplemental payments, Pennsylvania Medicaid policy, Uncategorized

CMS Clarifies Medicaid DSH Rule

Last week the Centers for Medicare & Medicaid Services announced a final rule addressing the treatment of third-party payers in calculating Medicaid uncompensated care costs.  This calculation affects individual hospitals’ Medicaid disproportionate share (Medicaid DSH) limit. According to CMS, This rule clarifies federal requirements regarding the treatment of third party payers in determining the hospital-specific Medicaid DSH payment limit, which is set by statute as a hospital’s “uncompensated costs” incurred in providing hospital services to Medicaid and uninsured patients. The final rule makes clearer our existing policy that uncompensated costs include only those costs for Medicaid eligible individuals that remain after accounting for all payments received by or on behalf of Medicaid eligible individuals, including Medicare and other third party … Read More

Posted in Federal Medicaid issues, Medicaid supplemental payments, Pennsylvania Medicaid policy, Pennsylvania safety-net hospitals

MACPAC Looks at Medicaid DSH

Hospitals that serve especially large numbers of Medicaid and low-income patients still need Medicaid disproportionate share hospital payments (Medicaid DSH) to avoid red ink despite the expansion of Medicaid and the increase in the number of uninsured people fostered by the Affordable Care Act. So concludes the Medicaid and CHIP Payment and Access Commission (MACPAC) the non-partisan legislative branch agency that advises Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on Medicaid and Children’s Health Insurance Program issues. In its March 2017 report to Congress, MACPAC writes that In both expansion and non-expansion states, deemed DSH hospitals, which are statutorily required to receive DSH payments because they serve a high share of Medicaid-enrolled … Read More

Posted in Federal Medicaid issues, Medicaid supplemental payments

Integrating Medicaid Supplemental Payments into Value-Based Purchasing

New health care delivery and reimbursement systems and new federal regulations will result in changes in how states deploy their Medicaid resources through supplemental payments in the coming years. A new Commonwealth Fund report describes the kinds of supplemental Medicaid payments states currently make to hospitals – such as disproportionate share and upper payment limit payments – and notes the differing degree to which individual states use such supplemental payments. It also describes how those supplemental payments may be restructured in the coming years to foster greater use of value-based purchasing and to reward achieving state-created quality goals through new delivery and reimbursement systems such as accountable care organizations, bundled payments, shared savings program, capitated arrangements, and shared risk. Such … Read More

Posted in Medicaid supplemental payments, Pennsylvania Medicaid policy

MACPAC Looks at Medicaid DSH

With Medicaid disproportionate share payments (Medicaid DSH) facing future reductions, the agency charged with advising Congress on Medicaid and Children’s Health Insurance payment and access matters is considering what changes the federal supplemental Medicaid payment program might need. At a recent meeting in Washington, D.C., the Medicaid and CHIP Payment and Access Commission discussed the changing role and purpose of Medicaid DSH as more Americans obtain health insurance through private or public sources. MACPAC commissioners noted that hospital uncompensated care is falling, especially in states that have taken advantage of the Affordable Care Act to expand their Medicaid programs. A new Medicaid DSH formula set to be used for FY 2018, based more heavily than the current formula on the … Read More

Posted in Affordable Care Act, Medicaid supplemental payments, Pennsylvania safety-net hospitals

SNAP Comments on Proposed Medicaid DSH Regulation

The Safety-Net Association of Pennsylvania has written to the Centers for Medicare & Medicaid Services to object to how the agency proposes changing its methodology for calculating eligible hospitals’ Medicaid disproportionate share (Medicaid DSH) payments. In particular, SNAP opposes the manner in which CMS would treat payments from Medicare and third-party payers made on behalf of Medicaid-eligible individuals. In SNAP’s view, the letter notes, …the hospital-specific DSH limit has come to penalize the very hospitals that Medicaid DSH payments were designed to support. The SNAP letter explains that What concerns SNAP at this time is CMS’s apparent decision to rationalize and codify in regulations a narrower interpretation of the Medicaid DSH limit than what Congress described in section 1923(g) of … Read More

Posted in Medicaid supplemental payments, Pennsylvania safety-net hospitals, Safety-Net Association of Pennsylvania

CMS Proposes Medicaid DSH Rule

The Centers for Medicare & Medicaid Services has proposed a new rule that would clarify the basis for eligible hospitals’ Medicaid disproportionate share hospital payments (Medicaid DSH). Individual hospitals’ Medicaid DSH payments are based on their uncompensated care costs and the rule clarifies that only uncompensated costs for Medicaid patients for whom hospitals receive no other payments, such as from Medicare, state or local governments, or third-party payers, would count toward their hospital-specific Medicaid DSH limit. See the rule here. Interested parties have until September 15, 2016 to submit formal comments to CMS about its proposal. Representatives of Pennsylvania safety-net hospitals who would like to know more about how this proposal might affect their hospital can use the “contact us” link on … Read More

Posted in Medicaid supplemental payments, Pennsylvania safety-net hospitals

MACPAC Unhappy With How DSH is Dished

Medicaid disproportionate share hospital payments (Medicaid DSH) are not getting to the hospitals that need them most, according to the independent agency that advises Congress and the administration on Medicaid access, payment, and care delivery issues. In its March 2016 Report to Congress on Medicaid and CHIP, the Medicaid and CHIP Payment and Access Commission found …little meaningful relationship between DSH allotments and three aspects of DSH payments that Congress asked us to study: 1) the relationship of state DSH allotments to data relating to changes in the number of uninsured individuals, 2) data relating to the amount and sources of hospitals’ uncompensated care costs, and 3) data identifying hospitals with high levels of uncompensated care that also provide access to … Read More

Posted in Affordable Care Act, Medicaid supplemental payments

GAO: More Information Needed About Supplemental Medicaid Payments

More data is needed about the supplemental Medicaid payments states make to hospitals and how those payments are financed, according to a new report from the U.S. Government Accountability Office (GAO). According to the GAO, states are increasingly funding non-disproportionate share (Medicaid DSH) supplemental Medicaid payments to hospitals with funds from local governments and providers that are then matched by the federal government. In some states those supplemental payments, with the help of federal Medicaid matching funds, result in hospitals receiving reimbursement from Medicaid that exceeds the cost of the care they provide to their Medicaid patients. Pennsylvania’s safety-net hospitals receive a number of such supplemental Medicaid payments. In response to this concern, the GAO has urged the Centers for Medicare … Read More

Posted in Medicaid supplemental payments, Pennsylvania safety-net hospitals

Decision to Restore PA Tobacco Money Upheld

The state’s Commonwealth Court has upheld a lower court decision restoring more than $125 million in tobacco funding that an arbitration panel sought to deny the state. Under the terms of the Tobacco Master Settlement, states receive annual payments from tobacco companies to compensate them for the costs they incur caring for people sickened by cigarettes and smoking.  In 2013, an arbitration panel ruled that the state had failed to fulfill all of the settlement agreement’s terms and reduced Pennsylvania’s proceeds from the agreement.  A 2014 appeal of that decision restored much of that funding and the Commonwealth Court upheld that decision. The tobacco funding is used to support smoking cessation programs, cancer research, and health care services.  It is … Read More

Posted in Medicaid supplemental payments, Pennsylvania safety-net hospitals
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