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HRD-93-3R 1 (1992-12-22)

handle is hein.gao/gaobackfg0001 and id is 1 raw text is: United States GAO General Accounting Office Washington, D.C. 20548 Human Resources Division B-249657 December 22, 1992 J I lii I I I The Honorable Ronald D. Coleman House of Representatives 148391 The Honorable J.J. Pickle House of Representatives Hospitals that serve large numbers of Medicaid patients can face significant financial burdens because Medicaid generally reimburses providers at a lower rate than other insurers. To reduce the burden, the Congress established the Medicaid disproportionate share program in 1981.1 The program allows states to designate hospitals treating large numbers of low-income patients as disproportionate share hospitals and to give these hospitals additional Medicaid reimbursement. In recent years, the number of such hospitals has grown significantly. Each state chooses the formulas that are used to qualify 0 hospitals for disproportionate share status and to U determine the amount of funds these hospitals receive. Q' States have used provider taxes and voluntary contributions as a primary funding source for disproportionate share programs. Moreover, recent legislation limits the total amount that can be paid as disproportionate share payments to 12 percent of the amount of medical assistance expenditures paid nationally.2 It is too soon to tell how o individual states will change their disproportionate share ;0 Q . programs in response to these limitations, and the PC p information in this report reflects the situation before > these changes.3 Enclosure I is a summary of federal 4 legislation pertaining to the Medicaid disproportionate share program. 'Omnibus Budget Reconciliation Act of 1981, P.L. 97-35. 2Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991, provisions effective October 1, 1992. 3Implementing regulations for the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991 were issued November 24, 1992. GAO/HRD-93-3R, Medicaid: Disproportionate Share Policy

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