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.”