Variation And Changes In The Targeting Of Medicaid Disproportionate Share Hospital Payments.

Little is known about how Medicaid disproportionate share hospital payments, which are intended to support hospitals that serve low-income patients, are allocated or whether allocation patterns have changed over time. We employed alternative definitions of targeting, or the degree to which allocations were made in a manner consistent with the statutory goals and intent of the program, to examine disproportionate share hospital payment allocations in forty-nine participating states. The most recent data indicate that 57.2 percent of acute care hospitals received disproportionate share hospital payments, totaling more than $14.5 billion, in 2015. The majority of payments went to hospitals with Medicaid shares above the state-specific median (89.1 percent), hospitals with uncompensated care shares above the state-specific median (60.6 percent), or hospitals deemed as disproportionate share per statutory definitions (64.6 percent). However, among all hospitals receiving these payments, up to 31.6 percent of payments were allocated to hospitals that did not meet a given definition, and 3.2 percent went to hospitals that met none of them. These findings suggest that although the majority of the payments were targeted to hospitals serving low-income patients, opportunities exist to better align allocation with statutory goals and intent or to revise applicable statute.

Price transparency implementation: Accessibility of hospital chargemasters and variation in hospital pricing after CMS mandate.

BACKGROUND: National regulations have increasingly focused on transparency in hospital billing and pricing practices. A January 2019 federal mandate required hospitals to publicize lists of billable procedures and items known as chargemasters. METHODS: We identified the 500 top self-pay/uninsured revenue grossing hospitals nationally and searched each hospital's website for a chargemaster. Corresponding items were matched across chargemasters. Intrahospital and interhospital price variation were calculated. To investigate variation in item naming, a name variant and fuzzy matching search was conducted for fifteen common chargemaster items. RESULTS: Of 500 hospitals in this study, 69 (13.8%) had chargemasters that were inaccessible and 30 (6.0%) had chargemasters that did not meet mandated requirements. Among the remaining 431 hospitals, the mean interhospital and intrahospital variation in pricing for identical items was 18% (SD 28%) and 28% (SD 29%), respectively. 388 hospitals listed multiple prices for the same item, with a mean of 687.3 duplicated items (SD 1157.7). Among fifteen common chargemaster items, each item was associated with an average of 275 (SD 213) unique name variants. Interhospital price variation of these items ranged from 53% (transthoracic echocardiogram) to 243% (furosemide 40 mg). CONCLUSIONS: Many chargemasters have barriers to access, and item naming is inconsistent across chargemasters. There is significant interhospital price variation for similar items. IMPLICATIONS: Chargemasters are uninterpretable for the purpose of patient price comparison in their current form. Further regulatory efforts are necessary to increase price transparency and enhance the ability of patients to compare hospital prices.

Advocating for Pasteurized Donor Human Milk: The Journey for Medicaid Reimbursement in New York State.

BACKGROUND: The American Academy of Pediatrics and the National Association of Neonatal Nurses recognize that federal policies fail to reimburse for the provision of pasteurized donor human milk (PDHM) to the very low birth-weight neonate, and have encouraged members to advocate for the inclusion of PDHM into their respective state Medicaid programs. PURPOSE: This article describes what occurred in New York State as advocates worked for reimbursement of PDHM reimbursement by Medicaid. METHOD: Tactics utilized in New York have been presented with an advocacy framework to illustrate the necessary strategic foresight required for productive engagement within the healthcare policy arena. RESULTS: Examination of employed advocacy efforts targeted to remove known cost barriers associated with PDHM. IMPLICATIONS FOR PRACTICE: Full utilization of PDHM within intensive care. IMPLICATIONS FOR FUTURE RESEARCH: The necessity to engage in scholastic/evidence-based advocacy work.

The Affordable Care Act: Long-Term Financial Impact on a Level I Trauma Center.

BACKGROUND: Prior studies of the impact of the Affordable Care Act on reimbursement for inpatient trauma care do not include disproportionate share hospital (DSH) funding. Because trauma centers and other safety-net hospitals are sensitive to any changes in financial support, it is essential to include DSH funding in evaluating overall reimbursement. This study analyzes the long-term financial trends, including DSH, of a level I trauma center in Ohio, a state that expanded Medicaid. METHODS: Charges, reimbursement, sources of insurance coverage, Injury Severity Scores, and DSH funding for the trauma patient population of an Ohio American College of Surgeons level 1 trauma center were studied from 2012 to 2017. Data were collected from Transition Systems, Inc. RESULTS: During 2012-2017, self-pay patient cases decreased from 15.0% to 4.1% and commercial insurance patients decreased from 34.2% to 27.6%. The percentage of Medicaid patients increased from 15.5% to 27.1%; however, Medicaid reimbursement average per case declined from $17,779 in 2012 to $10,115 in 2017 (a decline of 43.1%). Self-pay charges decreased from $22.0 million to $6.7 million. Total DSH funding, compensation given to hospitals that disproportionately treat underserved populations, decreased 17.4%. CONCLUSIONS: Self-pay charges and self-pay patients decreased dramatically; Medicaid patients and charges increased substantially in the years after the implementation of the Affordable Care Act at our trauma center. However, there was a decrease in commercial insurance, which had the highest reimbursement for our hospital, and a significant decline in DSH, a critical supplemental source of funding for safety-net hospitals.

The ACA Medicaid Expansion, Disproportionate Share Hospitals, and Uncompensated Care.

OBJECTIVE: To estimate the effect of the first full year of the ACA Medicaid expansion on hospital provision of uncompensated care, with special attention paid to hospitals that treat a disproportionate share of low-income patients. DATA SOURCES: Data from a balanced panel of short-term, general, nonfederal, Medicare-certified hospitals were obtained from Medicare cost reports from 2011 to 2014. STUDY DESIGN/STUDY SETTING: A series of difference-in-differences analyses were performed using hospitals in nonexpansion states as the control group. The dependent variable is hospital provision of uncompensated care. DATA COLLECTION/EXTRACTION METHODS: The data were downloaded from the National Bureau of Economic Research website. PRINCIPAL FINDINGS: The Medicaid expansion significantly reduced hospital provision of uncompensated care in 2014. In particular, within expansion states, DSH hospitals saw reductions beyond those experienced by non-DSH hospitals. CONCLUSIONS: Evidence from this study indicates that the Medicaid expansion served to widen an already broad gap in provision of uncompensated care between hospitals in expansion and nonexpansion states. In addition, within expansion states, variation in uncompensated care between hospitals that treat a disproportionate share of low-income patients and those that do not was reduced, with the former experiencing significantly larger reductions. Lawmakers considering expanding Medicaid and those deciding appropriate levels of DSH payments should consider these findings.

Medicaid Program; Disproportionate Share Hospital Payments--Treatment of Third Party Payers in Calculating Uncompensated Care Costs. Final rule.

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under section 1923(g)(1)(A) of the Social Security Act (Act), and the application of such limitation in the annual DSH audits required under section 1923(j) of the Act, by clarifying that the hospital-specific DSH limit is based only on uncompensated care costs. Specifically, this rule makes explicit in the text of the regulation, an existing interpretation that uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for payments made to hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals. As a result, the hospital-specific limit calculation will reflect only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source.

Can Disproportionality Analysis of Post-marketing Case Reports be Used for Comparison of Drug Safety Profiles?

Clinical trials usually do not have the power to detect rare adverse drug reactions. Spontaneous adverse reaction reports as for example available in post-marketing safety databases such as the FDA Adverse Event Reporting System (FAERS) are therefore a valuable source of information to detect new safety signals early. To screen such large data-volumes for safety signals, data-mining algorithms based on the concept of disproportionality have been developed. Because disproportionality analysis is based on spontaneous reports submitted for a large number of drugs and adverse event types, one might consider using these data to compare safety profiles across drugs. In fact, recent publications have promoted this practice, claiming to provide guidance on treatment decisions to healthcare decision makers. In this article we investigate the validity of this approach. We argue that disproportionality cannot be used for comparative drug safety analysis beyond basic hypothesis generation because measures of disproportionality are: (1) missing the incidence denominators, (2) subject to severe reporting bias, and (3) not adjusted for confounding. Hypotheses generated by disproportionality analyses must be investigated by more robust methods before they can be allowed to influence clinical decisions.

Distribution of Disproportionate Share Hospital Payments to Rural and Critical Access Hospitals.

Purpose: This policy brief provides data assessing effects of Medicaid Disproportionate Share Hospital (DSH) payment on rural hospitals in 47 states. While the allocation of DSH funds to the state is determined by federal legislation utilizing a formula developed by the Centers for Medicare & Medicaid Services (CMS), each state determines distribution to hospitals using an approved State Plan Amendment (SPA) that meets minimum federal requirements. Our findings suggest that distribution to rural hospitals, and critical access hospitals (CAHs) in particular, varies considerably across states. Data presented in this document helps ground any changes to either federal requirements or to SPAs by showing the impact of DSH payment from the most recent data available. Key Findings: (1) Medicaid DSH payment methodology and distribution to hospitals varies considerably across states. (2) The percentage of rural hospitals in a state receiving any Medicaid DSH payment ranged from 0 percent to 100 percent. (3) For rural hospitals receiving Medicaid DSH payments, the impact on total patient revenue ranged from less than 0.5 percent to 8.8 percent.

Contrary To Popular Belief, Medicaid Hospital Admissions Are Often Profitable Because Of Additional Medicare Payments.

It is generally believed that most hospitals lose money on Medicaid admissions. The data suggest otherwise. Medicaid admissions are often profitable for hospitals because of payments from both the Medicaid program and the Medicare program, including payments for uncompensated care and from the Medicare disproportionate-share hospital program. On average, adding a single Medicaid patient day in fiscal year 2017 will increase most hospitals' Medicare payments by more than $300. When added to Medicaid payments, these payments often cause Medicaid patients to be profitable for hospitals. In contrast, adding a single charity care day in the same year will decrease overall Medicare payments by about $20 on average. The Centers for Medicare and Medicaid Services recently announced a proposal to shift some Medicare payments from supporting hospitals' costs for Medicaid patients to directly supporting their costs for uncompensated care. If that proposal is adopted, hospitals' profits on Medicaid patients would decrease, but their losses on care for the uninsured would be reduced.

Financial Loss for Inpatient Care of Medicaid-Insured Children.

Importance: Medicaid payments tend to be less than the cost of care. Federal Disproportionate Share Hospital (DSH) payments help hospitals recover such uncompensated costs of Medicaid-insured and uninsured patients. The Patient Protection and Affordable Care Act reduces DSH payments in anticipation of fewer uninsured patients and therefore decreased uncompensated care. However, unlike adults, few hospitalized children are uninsured, while many have Medicaid coverage. Therefore, DSH payment reductions may expose extensive Medicaid financial losses for hospitals serving large absolute numbers of children. Objectives: To identify types of hospitals with the highest Medicaid losses from pediatric inpatient care and to estimate the proportion of losses recovered through DSH payments. Design, Setting, and Participants: This retrospective cross-sectional analysis evaluated Medicaid-insured hospital discharges of patients 20 years and younger from 23 states in the 2009 Kids' Inpatient Database. The dates of the analysis were March to September 2015. Hospitals were categorized as freestanding children's hospitals (FSCHs), children's hospitals within general hospitals, non-children's hospital teaching hospitals, and non-children's hospital nonteaching hospitals. Financial records of FSCHs in the data set were used to estimate the proportion of Medicaid losses recovered through DSH payments. Main Outcomes and Measures: Hospital financial losses from inpatient care of Medicaid-insured children (defined as the reimbursement minus the cost of care) were compared across hospital types. For our subsample of FSCHs, Medicaid-insured inpatient financial losses were calculated with and without each hospital's DSH payment. Results: The 2009 Kids' Inpatient Database study population included 1485 hospitals and 843 725 Medicaid-insured discharges. Freestanding children's hospitals had a higher median number of Medicaid-insured discharges (4082; interquartile range [IQR], 3524-5213) vs non-children's hospital teaching hospitals (674; IQR, 258-1414) and non-children's hospital nonteaching hospitals (161; IQR, 41-420). Freestanding children's hospitals had the largest median Medicaid losses from pediatric inpatient care (-$9 722 367; IQR, -$16 248 369 to -$2 137 902). Smaller losses were experienced by non-children's hospital teaching hospitals (-$204 100; IQR, -$1 014 100 to $14 700]) and non-children's hospital nonteaching hospitals (-$28 310; IQR, -$152 370 to $9040]). Disproportionate Share Hospital payments to FSCHs reduced their Medicaid losses by almost half. Conclusions and Relevance: Estimated financial losses from pediatric inpatients covered by Medicaid were much larger for FSCHs than for other hospital types. For children's hospitals, small anticipated increases in insured children are unlikely to offset the reductions in DSH payments.

Diagnosis-related Groups and Hospital Inpatient Federal Reimbursement.

To understand the complex system of reimbursement for health care services, it is helpful to have a working knowledge of the historic context of diagnosis-related groups (DRGs), as well as their utility and increasing relevance. Congress implemented the DRG system in 1983 in response to rapidly increasing health care costs. The DRG system was designed to control hospital reimbursements by replacing retrospective payments with prospective payments for hospital charges. This article explains how these payments are calculated. Every inpatient admission is classified into one of several hundred DRGs that are based on the diagnosis, complications, and comorbidities. The Centers for Medicare & Medicaid Services (CMS) assigns each DRG a weight that the CMS uses in conjunction with hospital-specific data to determine reimbursement. A population's DRGs represent the resources needed to treat the medical disorders of that population. Hospital administrators use this information to budget and plan for the future. The Affordable Care Act and other recent legislation affect medical reimbursement by altering the DRG system. Radiologic procedures in particular are affected. This legislation will give DRGs an even larger role in determining reimbursements in the coming years.

Pay-for-performance schemes that use patient and provider categories would reduce payment disparities.

Providers that care for disproportionate numbers of disadvantaged patients tend to perform less well than other providers on quality measures commonly used in pay-for-performance programs. This can lead to the undesired effect of redistributing resources away from providers that most need them to improve care. We present a new pay-for-performance scheme that retains the motivational aspects of standard incentive designs while avoiding undesired effects. We tested an alternative incentive payment approach that started with a standard incentive payment allocation but then "post-adjusted" provider payments using predefined patient or provider characteristics. We evaluated whether such an approach would mitigate the negative effects of redistributions of payments across provider organizations in California with disparate patient populations. The post-adjustment approach nearly doubled payments to disadvantaged provider organizations and greatly reduced payment differentials across provider organizations according to patients' income, race/ethnicity, and region. The post-adjustment of payments could be a useful supplement to paying for improvement, aligning the goals of disparity reduction and quality improvement.

Medicaid program; disproportionate share hospital payments--uninsured definition. Final rule.

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under the Social Security Act (the Act). Under this limitation, DSH payments to a hospital cannot exceed the uncompensated costs of furnishing hospital services by the hospital to individuals who are Medicaid-eligible or "have no health insurance (or other source of third party coverage) for the services furnished during the year.'' This rule provides that, in auditing DSH payments, the quoted test will be applied on a service-specific basis; so that the calculation of uncompensated care for purposes of the hospital-specific DSH limit will include the cost of each service furnished to an individual by that hospital for which the individual had no health insurance or other source of third party coverage.

Identifying hospitals that may be at most financial risk from Medicaid disproportionate-share hospital payment cuts.

Medicaid disproportionate-share hospital (DSH) payments are expected to decline by $35.1 billion between fiscal years 2017 and 2024, a reduction brought about by the Affordable Care Act (ACA) and recent congressional action. DSH payments have long been a feature of the Medicaid program, intended to partially offset uncompensated care costs incurred by hospitals that treat uninsured and Medicaid populations. The DSH payment cuts were predicated on the expectation that the ACA's expansion of health insurance to millions of Americans would bring about a decline in many hospitals' uncompensated care costs. However, the decision of twenty-five states not to expand their Medicaid programs, combined with residual coverage gaps, may leave as many as thirty million people uninsured, and hospitals will bear the burden of their uncompensated care costs. We sought to identify the hospitals that may be the most financially vulnerable to reductions in Medicaid DSH payments. We found that of the 529 acute care hospitals that will be particularly affected by the cuts, 225 (42.5 percent) are in weak financial condition. Policy makers should recognize that decreases in revenue may affect these hospitals' ability to give vulnerable populations access to care.

Disproportionate-share hospital payment reductions may threaten the financial stability of safety-net hospitals.

Safety-net hospitals rely on disproportionate-share hospital (DSH) payments to help cover uncompensated care costs and underpayments by Medicaid (known as Medicaid shortfalls). The Affordable Care Act (ACA) anticipates that insurance expansion will increase safety-net hospitals' revenues and will reduce DSH payments accordingly. We examined the impact of the ACA's Medicaid DSH reductions on California public hospitals' financial stability by estimating how total DSH costs (uncompensated care costs and Medicaid shortfalls) will change as a result of insurance expansion and the offsetting DSH reductions. Decreases in uncompensated care costs resulting from the ACA insurance expansion may not match the act's DSH reductions because of the high number of people who will remain uninsured, low Medicaid reimbursement rates, and medical cost inflation. Taking these three factors into account, we estimate that California public hospitals' total DSH costs will increase from $2.044 billion in 2010 to $2.363-$2.503 billion in 2019, with unmet DSH costs of $1.381-$1.537 billion.