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MACPAC Releases Annual Analysis of Medicaid DSH Allotments

March 20, 2020

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CONTACTS
Andrew Amari, Hospital Policy and Regulatory Specialist

The Medicaid and CHIP (Children’s Health Insurance Program) Payment and Access Commission (MACPAC) released its March 2020 Report to Congress on Medicaid and CHIP, providing its annual analysis on Medicaid disproportionate share hospital (DSH) allotments to states and chapters on improving the quality and timeliness of Section 1115 demonstration evaluations. It also provides its assessment on state readiness to report mandatory core set measures.

In its annual analysis of DSH allotments to states, MACPAC notes that DSH allotments are still scheduled to be reduced under current law in fiscal year (FY) 2020, with allotments reduced by $4 billion in FY 2020. While the Further Consolidated Appropriations Act, 2020 (P.L. 116-94), delays the DSH reductions until May 23, 2020, it does not alter the size of the reduction [see Washington Highlights, Dec. 19, 2019]. MACPAC estimates that the $4 billion reduction in FY 2020 will affect states differently, with reductions ranging from 3.5% to 56.9% of unreduced allotment amounts depending on the state.

MACPAC’s analysis also provides required updates 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 reports that uninsured individuals have increased nationally, with 28.5 million people uninsured in 2018, a 7.4% increase from 2017. Uncompensated care has also increased, up to $39.9 billion in FY 2017, a 7.3% increase from FY 2016. The reported Medicaid shortfall grew to $22.9 billion in FY 2017, up $2.9 billion, or 14.5%, from FY 2016.

In its chapter on Section 1115 demonstration evaluations, the commission details perspectives on how to improve demonstration evaluations from an expert roundtable made up of state and federal Medicaid officials, evaluators of state demonstration programs, researchers, and other stakeholders [see Washington Highlights, Nov. 1, 2019].

In the report, MACPAC identifies issues with the evaluation requirements, methodologies, budgeting, and comment processes. The commission details previous efforts to address these issues and notes that it has not identified a need for further legislative or regulatory steps. Instead, it will continue to monitor how both the states and the Centers for Medicare and Medicaid Services (CMS) carry out evaluations and use findings for future decision-making.

Finally, the commission’s chapter on state readiness to report mandatory core set measures identifies factors that would bolster states’ readiness to report on the core set of quality measures for children enrolled in Medicaid and CHIP and the core set of behavioral health measures for adults enrolled in Medicaid. Factors include early CMS guidance, ongoing technical assistance, and additional resources to hire and train staff.

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