In its March 7-8 meeting, the Medicaid and CHIP Access and Payment Commission (MACPAC) revisited potential policy recommendations for addressing third-party payments in the disproportionate share hospital (DSH) definition of Medicaid shortfall [see Washington Highlights, Jan. 25].
Due to a recent court ruling, third-party payments are not included as payments in the Medicaid shortfall definition, which has impacted in-state distribution of DSH funds and the limits on DSH payments to individual hospitals. Commission staff presented three unchanged policy options from its previous meeting for commissioners to consider:
- Option 1: Count all payments and costs for Medicaid patients with third-party coverage;
- Option 2: Do not count payments or costs for Medicaid patients with third-party coverage;
- Option 3: Establish different rules for different types of third-party coverage situations.
Commissioners agreed that the current situation needs to be addressed (post-court decision) but were unable to come to a consensus. Several commissioners expressed concern that Option 1 could discourage hospitals from enrolling privately insured patients, as it could impact hospitals’ potential DSH payments. Others noted interest in Option 2 but felt it did not adequately address the complex and competing interests that Option 3 could better address.
The topic will be revisited and put to vote during the April 11-12 MACPAC meeting as commissioners seek a better understanding of the recommendations’ potential impacts.