Uninsured Patients, Provider Taxes Hurt Adequacy of Medicaid Payments
While Medicaid payments now typically cover more than the cost of Medicaid services in many states, they do not cover the costs of caring for low-income patients after providers care for uninsured patients and pay Medicaid provider taxes, a new study has found.
According to a Health Affairs report,
After accounting for supplemental payments, we found that in 2011, disproportionate-share hospitals, on average, received gross Medicaid payments that totaled 108 percent of their costs for treating Medicaid patients but only 89 percent of their costs for Medicaid and uninsured patients combined. However, these payments were reduced by approximately 4–11 percent after we accounted for provider taxes and local government contributions that are used to help finance Medicaid payments.
Because they are all disproportionate share hospitals, this is especially a challenge for Pennsylvania’s urban safety-net hospitals.
To learn more, go here to see the Health Affairs analysis “For Disproportionate-Share Hospitals, Taxes And Fees Curtail Medicaid Payments.”
That includes 680,000 Pennsylvanians who enrolled in the state’s Medicaid program after the reform law allowed for that program’s expansion, more than 400,000 people who signed up for insurance on the federal health insurance exchange, the state’s taxpayers who might be left with the bill for some or all of these costs if the reform law’s financial support were to disappear in the near future, and others.

Beginning on December 1, Medicaid will pay for long-acting contraceptives administered after delivery and also will increase payments to doctors who provide those contraceptives. Currently, those costs are generally borne by hospitals in the lump-sum payment Medicaid makes for deliveries.
A new paper from the Kaiser Family Foundation looks at some of the major questions that will arise in the coming months, including:


And while operating margins for psychiatric and specialty hospitals declined, they still remain generally strong at 8.81 percent and 7.78 percent, respectfully.