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MACPAC Discusses DSH Allotments in Advance of March 2020 Report

November 1, 2019

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PRESS CONTACTS
Mary Mullaney, Director, Hospital Payment Policies

The Medicaid and CHIP Payment and Access Commission (MACPAC) Oct. 31 discussed a statutorily required analysis of disproportionate share hospital (DSH) allotments. Each year, MACPAC includes in its March report to Congress an analysis of DSH payments to hospitals, and the commission is planning to discuss the draft chapter for the March 2020 report at the December 2019 meeting.

The report is also required to include an update on the number of uninsured individuals, the amount and sources of uncompensated care reported by hospitals, and the identification of hospitals with high levels of uncompensated care that provide essential community services.

MACPAC staff noted that in fiscal year (FY) 2017, hospitals reported a total of $39.9 billion in uncompensated care costs, an increase of $2.7 billion from the previous year. Citing the American Hospital Association survey, the Medicaid shortfall was $22.9 billion nationally in 2017. This is an increase of $2.9 billion from 2016.

MACPAC staff also discussed the California Global Payment Program — a Section 1115 waiver demonstration — that combines DSH and other uncompensated care payments into a global payment tied to quality goals for public health care systems. While it was noted that evaluation of the program indicated improved access to services for the uninsured and reductions in avoidable hospital use, MACPAC staff cautioned that uncertainty around DSH funding may limit interest in other states.

Commissioners discussed the desire to include recommendations in the March report, including reiterating the recommendation that third-party payments be included in the calculation of a hospital’s Medicaid shortfall. They also voiced support for requiring DSH and uncompensated care payments reporting at the facility level. Additionally, there was agreement that a strong statement that encourages states to look at the California Global Payment Program be included. Commissioners and staff acknowledged that many of these recommendations have been included in previous MACPAC reports, and action on them is dependent upon what Congress may do in the future.

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