Reforming The Medicaid Disproportionate-Share Hospital Program

Transcription

1 ing The Medicaid Disproportionate-Share Hospital Program To save money and better target the funds, we should tie the federal dollars that states receive directly to the sizes of their Medicaid and uninsured populations. by Aaron McKethan, Nadia Nguyen, Benjamin E. Sasse, and S. Lawrence Kocot ABSTRACT: Congress and the Obama administration are considering redirecting federal spending on the Medicaid disproportionate-share hospital (DSH) program to help pay for health reform. In this paper, we propose linking federal Medicaid DSH funding to state-level Medicaid enrollment or uninsured populations, or both. This approach could produce as much as $44 billion in federal savings over time without exposing hospitals to uncertain or across-the-board spending cuts. It could also gradually address state variations in Medicaid DSH funding. We also offer ideas to ensure that DSH spending is more directly connected than it is now to improvements in care for vulnerable populations. [ Aff (Millwood). 2009; 28(5):w (published online 18 August 2009; /hlthaff.28.5.w926)] Aaron McKethan (amckethan@brookings.edu) is a research director of the Engelberg Center for Care, Brookings Institution, in Washington, D.C. and an assistant professorial lecturer of health policy at George Washington University Medical Center. Nadia Nguyen is a research assistant in the Engelberg Center. Ben Sasse is an assistant professor of public affairs in the Lyndon B. Johnson School, University of Texas at Austin. S. Lawrence Kocot is deputy director of the Engelberg Center and is senior counsel at Sonnenschein Nath and Rosenthal LLP, in Washington, D.C. Congress and the obama administration are seeking agreement on ways to reform the U.S. health care and insurance system and to expand coverage to the uninsured. One unresolved and controversial issue is where to find the $800 billion to $1.6 trillion that could be needed to finance comprehensive reform over ten years. Current budget deficits, long-term fiscal projections for Medicare and Medicaid, and the economic recession mean that there could be little new federal funding available. Consequently, health reform will likely be financed in part through a combination of efforts to save money in the health care system and efforts to redirect existing spending in new ways. One approach under consideration is to redirect federal spending on the Medicaid disproportionate-share hospital (DSH) program to help pay for coverage exw August 2009 DOI /hlthaff.28.5.w Project HOPE The People-to-People Foundation, Inc. Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

2 DSH Program pansion. The federal government is expected to spend more than $100 billion over a ten-year budget window ( ) 1 on the Medicaid DSH program, which compensates certain hospitals for the unreimbursed costs they incur from treating low-income and uninsured patients. If health reform is implemented, these costs are expected to decline over the coming years, which in turn could justify reduced federal Medicaid DSH payments. However, the specific approach that policymakers may use to extract savings from this program is not yet clear. This paper considers several options to reform the Medicaid DSH program. We present ten-year budget estimates for variations on a specific financing approach that would link future federal spending on state Medicaid DSH allotments to objective indicators of uncompensated care volume at the state level. This approach could produce as much as $44 billion in federal savings in the program and also addressthewidefederaldshfundingvariationsacrossstates.weincludefour policy considerations for implementing this policy. In addition, we suggest two ideas to ensure that federal spending on Medicaid DSH is more directly connected than it is now to the delivery of care for vulnerable populations. The Medicaid DSH Program The Medicaid DSH program was established in 1981 as part of the Omnibus Budget Reconciliation Act (OBRA) (PL 97-35) to support hospitals serving a large number of Medicaid and uninsured patients. Through this program, the federal governmentdistributesfederalfundstostatesasallotments. 2 States are required to contribute their own supplemental hospital payments to access these federal allotments. Within federal guidelines, including per institution funding caps that cannot exceed hospitals unreimbursed costs, states exercise much discretion in distributing federal funds to hospitals eligible for supplemental payments. Over time, states have used several methods to draw down federal funds without providing the required level of state matching funds. This includes designating revenues from provider assessments or complex intergovernmental transfers as a state s share of supplemental payments. 3 These practices have led to rapid growth in federal Medicaid DSH spending and major variations in federal funding across states. 4 6 As a result, Congress passed laws designed to slow down spending and to address (at least modestly) the spending variations from state to state. 7 In 2000, Congress effectively locked in state funding variations by linking states DSH allotment growth to inflation. 8 However, state funding variations under current law still do not reflect indicators of uncompensated care, such as Medicaid enrollment or spending or the number of people without health insurance (Exhibit 1). Moreover, a general problem with the Medicaid DSH program is the lack of transparency and accountability for documenting the direct impact of federal spending on care for vulnerable populations. Although states must specify in Medicaid State Plans the criteria used to designate DSH hospitals and the formulas used to calculate DSH payments, it is difficult to verify whether these pay- HEALTH AFFAIRS ~ Web Exclusive w927 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

3 EXHIBIT Federal Medicaid Disproportionate-Share Hospital (DSH) Allotment To States, Per Medicaid Enrollee And Uninsured Person In AL AK AZ AR CA CO CT DE DC FL GA National average ($133) HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY ND ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WA WY State allotment (dollars) SOURCES: Medicaid and uninsured: Kaiser Family Foundation. insurance coverage of the total population, states ( ), U.S. (2007) [Internet]. Menlo Park (CA): KFF; 2009 Jun [cited 2009 Jun 10]. Available from: Medicaid DSH allotment: KFF. Federal Medicaid disproportionate share hospital (DSH) allotments [Internet]. Menlo Park (CA): KFF; 2009 Jun [cited 2009 Jun 10]. Available from: ments represent net additional funding to hospitals or how hospitals use these funds. Also unclear is the extent to which the billions of federal dollars spent on supplemental payments are making a direct impact on care for those the program w August 2009 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

4 DSH Program was designed to support. Given the importance of supporting safety-net hospitals and the need to ensure the integrity of federal spending, we believe that policymakers seeking to achieve federal savings from the Medicaid DSH program should also address these broader issues. Financing Options Direct adjustments to state allotments. One option Congress could consider to reform the Medicaid DSH program is to make direct adjustments to state allotments. Under current law, hospitals cannot receive Medicaid DSH payments in excess of their unreimbursed costs, as determined at the state level. 9 As unreimbursed costs decline in response to gains in health care coverage, per institution DSH funding caps will automatically decline. However, this will not necessarily produce savings to the federal government, because state allotments automatically grow each year with inflation. Instead, states could redirect unspent allotment funds to other hospitals that have not yet exceeded their cap. Congress could directly adjust these state allotments, but this would only preserve existing state allotment variations. Moreover, although there are new standardized reporting methods to calculate unreimbursed costs at the hospital level, 10 timely national data are not yet available to permit a consistent approach to directly reducing state allotments. Across-the-board cuts. A second policy option is scheduling uniform acrossthe-board cuts in states allotments. Although this approach would generate savings over time, it could also be problematic for states and hospitals if, for example, coverage gains and reductions in uncompensated care do not occur as projected or do so at different rates in different states. Given current state funding variations, this could be especially problematic for hospitals that provide large volumes of uncompensated care in low DSH states. Link allotments to Medicaid and uninsured numbers. A third approach, and the one we propose, is to reduce the federal share of Medicaid DSH spending only with demonstrated changes in states Medicaid enrollment and uninsured populations. Over time, states Medicaid DSH allotments would be reduced along with actual reductions in numbers of uninsured people in each state. This general approach would avoid uncertain or across-the-board reductions that would preserve the federal funding variations that exist across states. Approach And Scenarios We propose using actual measures of Medicaid enrollment and uninsured populations in each state as the basis for determining states future Medicaid DSH allotments. 11 Existing allotments under current law would be used as a starting point to compute, for each state, a combined Medicaid DSH cost per Medicaid enrollee and insured person. Specifically, each state s 2012 DSH allotment under currentlawwouldbedividedbytheaverageofthestate scombineduninsured population and Medicaid enrollment from the previous two years. HEALTH AFFAIRS ~ Web Exclusive w929 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

5 To set state allotments for fiscal year 2013 and beyond, the incremental DSH cost calculated for each state would be updated by inflation (using the Consumer Price Index for All Urban Consumers, or CPI-U) annually and multiplied by each state s average of combined Medicaid enrollment and uninsured population for the previous two years. As this average population declines over time for each state in response to coverage reform, federal funding for Medicaid DSH in each state would automatically decline on a lagged basis, producing federal savings that could help support expansions in insurance coverage. If the number of uninsured people declines relatively slowly in some states, reductions in federal Medicaid DSH funding would be correspondingly gradual. Moreover, by setting allotments using a two-year rolling average of states previous Medicaid enrollments and uninsured populations, states whose uninsured populations decline quickly in response to reform would not face immediate cuts in state allotments. This would also ensure that reductions in the number of uninsured people that are achieved by expanding Medicaid (for example, new enrollment by currently eligible but nonenrolled people or explicit Medicaid expansions to new populations) would not result in net Medicaid DSH reductions. We modeled a similar option that would use only measures of states uninsured populations. This would produce larger federal savings but would not account for the potentially increasing burden that states and hospitals might face with higher Medicaid enrollments after reform. An important effect of the basic Medicaid DSH financing reform outlined above is that it would automatically and gradually address variations in state-level Medicaid DSH allotments. This is because the Medicaid DSH cost per uninsured person and Medicaid enrollee calculated for each state in FY 2012 and used to slow down Medicaid DSH spending will vary considerably by state, reflecting the underlyingvariationinstatedshallotmentsseeninexhibit1.asthesestate-level DSH cost figures are multiplied by the rolling average of Medicaid enrollment and uninsured populations for each state over time (to measure the effects of reform in each state), the rate of incremental DSH funding reductions would be higher in states that already have much higher federal Medicaid DSH spending per Medicaid enrollee and uninsured person. Likewise, low DSH states would still see reductions in their funding allotments with net demonstrated reductions in uninsured populations, but the incremental magnitude of reductions in these states would be smaller in proportion. Because the proposed financing approach would be based on demonstrated changes in insurance coverage (specifically Medicaid and uninsured trends) at the state level, the federal savings potential would, by design, be sensitive to the specific form of coverage reform enacted by Congress and the administration and the specific state-level impact of national coverage reform. We first modeled the federal savings potential from implementing the proposed reform, assuming that broader coverage reforms are not implemented. We then considered three scenarw August 2009 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

6 DSH Program ios that assume that broader coverage reform will have different effects on total Medicaid enrollment and uninsured populations at the state level (Exhibit 2). 12 Modeling Results Implementing Medicaid DSH reforms absent broader changes in coverage (coverage reform outcome 1 in Exhibit 2) would produce negligible changes in federal spending over the ten-year budget window, regardless of whether state-level mea- EXHIBIT 2 Medicaid Disproportionate-Share Hospital (DSH) Financing Options And Spending Projections/Changes In Billions Of Dollars, options Medicaid DSH spending projections, (billions) Baseline a Current law: Medicaid enrollment declines from projected 39 million to 35 million Uninsured number increases from projected 51 million to 55 million Implement DSH reform starting in FY 2013 b,c $100.8 Changes in spending (using Medicaid and uninsured numbers) Changes in spending (using uninsured only Coverage reform outcome 1: DSH reform implemented; broader coverage reform not implemented Medicaid enrollment declines from projected 39 million to 35 million Uninsured number increases from projected 51 million to 55 million Coverage reform outcome 2: Medicaid enrollment increases from projected 39 million to 41 million Uninsured number decreases from projected 51 million to 13 million Coverage reform outcome 3: Medicaid enrollment increases from projected 39 million to 63 million Uninsured number decreases from projected 51 million to 13 million Coverage reform outcome 4: Medicaid enrollment increases from projected 39 million to 63 million Uninsured number decreases from projected 51 million to 25 million $2.8 $0.1 $24.8 $44.1 $12.7 $44.1 $5.6 $31.6 SOURCES: See below. a Ten-year baseline spending projection under current law: Congressional Budget Office. Spending and enrollment detail for CBO s March 2009 baseline: Medicaid [Internet]. Washington (DC): CBO; 2009 Mar [cited 2009 Jun 10]. Available from: b Ten-year baseline spending projection under coverage reform outcomes 1 4: ten-year projections based on authors own analysis. c Coverage reform outcomes: Estimates assume that coverage reform will begin in 2013; outcome estimates based on authors own analysis. HEALTH AFFAIRS ~ Web Exclusive w931 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

7 sures of uninsured populations or combined measures of Medicaid and uninsured populations are used to set allotments. Nominal federal spending changes under outcome 1 show that, by design, state allotments would not be greatly changed absent demonstrated changes in uninsured and Medicaid populations. However, should broader coverage reforms result in major reductions in uninsured populations and relatively modest expansions in Medicaid enrollment (coverage reform outcome 2), the proposed financing reforms would result in federal savingsofasmuchas$44billionovertheten-yearbudgetwindow,dependingon whether Medicaid and uninsured or only uninsured populations are used to derive state allotments. For options that combine Medicaid enrollment and uninsured measures, state allotments would largely be unaffected relative to the baseline if coverage expansion were accomplished by simply shifting large numbers of uninsured people to Medicaid. This can be seen in the relatively modest ($5.6 billion) federal savings generated under outcome 4, which achieves reductions in numbers of uninsured people largely by a substantial expansion of Medicaid enrollment. For all of the coverage reform options we considered, setting state DSH allotments using numbers of uninsured only would increase federal savings the most. These estimates range from $31.6 billion over ten years if the number of uninsured people fell to about twenty-five million (coverage reform outcome 4) to more than $44 billion with greater coverage gains (outcomes 2 and 3). Another noteworthy result from the modeling is the gradual annual increase in federal Medicaid DSH spending from 2015 through 2019 for all coverage reform scenarios. This is the result of using scenarios that largely reach equilibrium by The gradual increases in funding from 2015 and beyond are the result of our policy design of inflating each state s DSH allotment per Medicaid enrollee and uninsured person by inflation (CPI-U) each year (Exhibit 3). In practice, this outcome (as well as the broader savings estimates) would be contingent on the particular coverage results that happen in the real world, but it nonetheless shows how our proposal would not necessarily result in DSH cuts for all years. In fact, when uninsured numbers and Medicaid enrollment are unchanged from year to year, DSH allotments would grow by the CPI-U rate, as they do today. Addressing State Funding Variations Exhibit4presentstheimpactonstatesofthefederalMedicaidDSHsavingsreported in Exhibit 2. States and the District of Columbia are grouped into thirds. The top third combines the seventeen states that have the highest federal MedicaidDSHspendingperMedicaidenrolleeanduninsuredpersonbeforereform. Most of the savings from the proposed reforms would accrue from high DSH states, because these states account for most of the pre-reform DSH funding. To be clear, the bottom third of states would still be subject to the proposed financing reforms and would still face federal DSH reductions along with net reductions in w August 2009 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

8 DSH Program EXHIBIT 3 Projected Federal Spending On The Federal Share Of The Medicaid Disproportionate- Share Hospital (DSH) Program, Baseline And Four Coverage Outcomes, Billions of dollars 10 8 Baseline Outcome 1 Outcome 2 Outcome 3 6 Outcome SOURCES: Ten-year baseline spending projection under current law: Congressional Budget Office. Spending and enrollment detail for CBO s March 2009 baseline: Medicaid [Internet]. Washington: CBO: 2009 Mar [cited 2009 Jun 10]. Available from: Ten-year baseline spending projection under coverage reform outcomes 1 4: Ten-year projections based on authors own analysis. Coverage reform outcomes: Estimates assume that coverage reform will begin in 2013 (vertical line); outcome estimates are based on authors own analysis. NOTE: For full descriptions of the coverage reform outcomes, see Exhibit 2. uninsured people over time. However, the net result for these states would be negligible over ten years relative to baseline. This is attributable to two factors. First, by design, the rate at which spending reductions occur for low DSH states wouldbe modestrelative tothatofstates with above-average DSH allotments per Medicaid enrollee or uninsured person. Second, as noted earlier, the annual inflation adjustment applied to all states Medicaid DSH allotments per Medicaid enrollee and uninsured person would, for low DSH states, largely offset the funding reductions resulting from net declines in numbers of uninsured people. Results reported in Exhibit 4 assume that coverage reforms will be homogenously EXHIBIT 4 Impact Of Federal Medicaid Disproportionate-Share Hospital (DSH) Savings From Proposed s, By State (In Thirds), Billions Of Dollars, State distribution: federal DSH cost per Medicaid enrollee and uninsured person Percent of savings by state Coverage reform outcome 1 Coverage reform outcome 2 Coverage reform outcome 3 Coverage reform outcome 4 Top third of states Middle third of states Bottom third of states Total 59% $ $ $ $ SOURCES: Medicaid and uninsured data: Kaiser Family Foundation. insurance coverage of the total population, states ( ), U.S. (2007) [Internet]. Menlo Park (CA): KFF; 2009 Jun [cited 2009 Jun 10]. Available from: &sub=39&yr=85&typ=1. Medicaid DSH allotment data: KFF. Federal Medicaid disproportionate share hospital (DSH) allotments [Internet]. Menlo Park (CA): KFF; 2009 Jun [cited 2009 Jun 10]. Available from: NOTES: For this analysis, states are grouped into thirds. The top third represents states with the highest Medicaid allotments (2009) per Medicaid enrollments and uninsured populations in For full descriptions of the coverage reform outcomes, see Exhibit 2. HEALTH AFFAIRS ~ Web Exclusive w933 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

9 effective across states, which in practice is unlikely. Hence, these results should be viewed as illustrative. Implementation Options To implement the financing reform approach outlined above, Congress could authorize the secretary of and Human Services (HHS) to consider a number of different options. First, Congress could establish per state allotment floors or per year DSH funding reduction limits to ensure that no state s allotment would be reduced at a level lower than or at a rate faster than a specified percentage or fixed amount. Second, allotments could include modest adjustments to account for state differences in Medicaid provider reimbursement rates, costs to treat vulnerable populations, concentrations of undocumented immigrants in particular communities and states, and other relevant factors that can vary across states. Third, Congress could apply evidence-based weights to measures of uninsured populations and Medicaid enrollments when calculating state allotments to account for relative drivers of uncompensated care. Given that hospital uncompensated care is not limited to Medicaid enrollees and the uninsured, specific allotment methods could also account for uncompensated care resulting from insured people who do not meet their out-of-pocket spending obligations. Finally, once consistent, timely, and audited measures of hospital-level data on charity care and bad debt are available nationally, the HHS secretary could eventually change the proposed reforms outlined in this paper from primarily using measures of uninsurance and Medicaid enrollment per state to using more direct measures of uncompensated care volume at the hospital level. These and other possible implementation variations would affect the budget impactsofthereformswemodeled. Other s To Modernize The Medicaid DSH Program Here we offer ideas to help ensure that the Medicaid DSH program best supports high-value, coordinated care for those it was designed to support. Additional reporting requirements. First, in addition to being required to report on the methods used to distribute DSH funds to hospitals, states should also be required to provide detailed hospital-level information regarding provider taxes and other intergovernmental transfer policies used to supplement their share of Medicaid DSH funding. This would help determine the degree to which Medicaid DSH payments to hospitals represent new or recycled money. State reporting requirements should also be coordinated with hospital-level reporting, which will increasingly include more timely, transparent, and detailed information on the uncompensated care provided by hospitals that receive supplemental funds. Flexibility to innovate. We also contend that states should have additional flexibility within specific federal guidelines to use a portion of their DSH allotments w August 2009 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

10 DSH Program to test and evaluate innovative initiatives that are directly tied to improving care for vulnerable populations. Specifically, states should be permitted under Section 1115 or a related authority to provide hospitals with grants, outside of per institution caps, to develop new collaborations with federally qualified health centers or other outpatient clinics that encourage the delivery of coordinated care in appropriate clinical settings. This authority could also allow states to use a portion of their DSH allotments to provide incentives to certain institutions to facilitate the use of electronic systems for timely reporting of quality and cost measures to improve care coordination and patient outcomes. This should be coordinated with other incremental bonuspaymentsthatcongressismakingavailabletoprovidersfortheuseofhealth information technology and pay-for-reporting bonuses that will increasingly promote electronic reporting of health outcomes and related information. The intent of this new authority would be to hold hospitals harmless on federal Medicaid DSH payments when they take steps to improve care and lower costs. This authority should be monitored carefully, with explicit evaluation requirements, and should ensure that effective patient protections are in place. Over time, these efforts should ensure that a greater proportion of federal supplemental hospital and other payments is linked to documented improvements in care for vulnerable populations. Discussion Implementing the proposed Medicaid DSH reforms would help modernize the program in line with changes in uncompensated care; directly address wellknown, long-standing problems related to federal funding variations to states; help ensure that federal DSH payments are better able to support tangible improvements in care for vulnerable populations; and achieve major federal savings that can help reduce uncompensated care by expanding insurance coverage. Importantly, our financing approach would help avoid across-the-board DSH cuts that could lead to inappropriate or ill-timed disruptions in funding for affected hospitals, particularly those in states in which federal DSH funding has historically been proportionately low. Although hospital groups and states will understandably react negatively to any net cut in payments, we included several features that seek to ensure a smooth transition from current law to the new policy and to protect safety-net hospitals from Medicaid DSH cuts if reductions in the uninsured do not materialize as quickly as projected nationally or in specific states. The overall intent is to better target federal DSH spending to indicators of uncompensated care. Hence, we believe that our approach is far preferable tothestatusquoortocost-cuttingstrategies that would result in across-the-board DSH funding reductions. Further, our proposed financing approach would help address systemic and unwarranted state variations in federal DSH funding. Any approach that would di- HEALTH AFFAIRS ~ Web Exclusive w935 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.

11 rectly address federal spending variations across states, including reducing funding for some states at a faster rate than others, will not be politically easy. Regardless, from a policy perspective, it is difficult to justify both the current variations in Medicaid DSH allotments and any policy approach to cut DSH spending that does not account for these variations. Finally, DSH reforms should help ensure that the vulnerable populations served by disproportionate-share hospitals receive more direct, tangible benefits from this program. The related proposals we suggest should be viewed as initial steps to move federal spending on Medicaid DSH toward increasing accountability for delivering high-value care to those the program was designed to support. The authors gratefully acknowledge Mark Shepard for his valuable technical contributions to this paper. NOTES 1. Congressional Budget Office. Spending and enrollment detail for CBO s March 2009 baseline: Medicaid [Internet]. Washington (DC): CBO; 2009 Mar [cited 2009 Jun 10]. Available from: budget/factsheets/2009b/medicaid.pdf 2. Section 1923(f)(3) of the Social Security Act defines the calculation of state federal allotments, which are published annually in the Federal Register. 3. Peters CP. Medicaid disproportionate share hospital (DSH) payments. National Policy Forum [Internet]. Washington (DC): National Policy Forum; 2009 Jun [cited 2009 Jun 10]. Available from: 4. Government Accountability Office. Medicaid: CMS needs more information on the billions of dollars spent on supplemental payments [Internet]. Washington (DC): GAO; 2008 May [cited 2009 Jun 10]. Available from: Pub. no. GAO GAO. Medicaid: states use illusory approaches to shift program costs to federal government [Internet]. Washington (DC): GAO: 1994 Aug [cited 2009 Jun 10]. Available from: pdf. Pub. no. GAO/HEHS Hearne J. Medicaid disproportionate share payments [Internet]. Washington (DC): Congressional Research Service; 2007 Jul [cited 2009 Jun 10]. Available from: crsreports/crsdocuments/ pdf. Report no GAO. Medicaid: CMS needs more information on the billions of dollars spent on supplemental payments [Internet]. Washington (DC): GAO: 2008 May [cited 2009 Jun 10]. p. 12, Table 1. Available from: Pub. no. GAO The Balanced Budget Act (BBA) of 1997 replaced the formula-based Medicaid DSH allotment with fixed state allotments for FY based on historical spending. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) of 2000 effectively completed this lock-in by setting state DSH allotments from 2003 and beyond to the rate of the CPI-U. 9. Reporting rule guidance for states came in August 1994 in the form of a letter from the Department of and Human Services summarizing OBRA 93 DSH Limit Requirements CFR Parts 447 and 455 Medicaid program; disproportionate share hospital payments; Final Rule. edocket. [Internet]. Federal Register Dec; 73(245): [cited 2009 June 10]. Available from: Specific measures of uninsurance at the state level could be similar to methods the CMS has previously used to set state Children s Insurance Program allotments. Ongoing improvements in the Current Population Survey and the American Community Survey can further improve state-level estimates. 12. Our modeling assumes that the proposed Medicaid DSH reform is included in broader health care reform legislation with a 2013 implementation date. w August 2009 Downloaded from Affairs.org on April 08, Copyright Project HOPE The People-to-People Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at Affairs.org.