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GAO calls for more oversight of Medicaid hospital charity pay

NEWS IN BRIEF — Posted Jan. 7, 2013

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Medicaid’s supplemental payment programs to hospitals need additional oversight and transparency, the Government Accountability Office stated in a report released Dec. 21, 2012.

The program provides two types of supplemental payments: disproportionate share hospital payments and nondisproportionate share hospital payments. States are obligated to submit audits and reports to the Centers for Medicare & Medicaid Services to receive federal funds for their DSH payments. The audits indicate how well states are complying with a half-dozen DSH requirements, such as whether the payments are being directed only to hospitals’ uncompensated care costs.

In examining DSH audits from 2010, GAO determined that at least 44 states needed to make revisions to comply with these requirements. More than 40 states exceeded individual uncompensated care costs on DSH payments made to 717 hospitals, and nine states miscalculated uncompensated care costs for 206 hospitals when making DSH payments.

GAO also found that 39 states made non-DSH payments to more than 500 disproportionate share hospitals “that, along with their regular Medicaid payments, exceeded those hospitals’ total costs of providing Medicaid care by a total of about $2.7 billion.” Although not currently required of states, facility-specific payment reporting and yearly audits could help to improve transparency of non-DSH payments, the report stated.

Senate Finance Committee Chair Max Baucus (D, Mont.) said in a statement that he was “committed to additional oversight and accountability measures to help fulfill that promise, and will continue to drive down costs and strengthen Medicaid.”

The National Assn. of Public Hospitals and Health Systems supports actions to improve accountability in federal health programs, said Bruce Siegel, MD, MPH, NAPH’s president and CEO. “We’re concerned, however, that additional reporting and audit requirements will strain already limited resources at hospitals that care for large numbers of uninsured and underinsured individuals,” he said.

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