Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Cost Differentials


The allocation formula could further adjust the hospital's volume-weighted low-income patient measure for systematic differences in cost. A case-mix adjustment should be used when adjusted discharges are used in the allocation formula. A case-mix adjustment is not needed if adjusted inpatient days are used as the volume statistic because case mix is correlated with length of stay. The Medicare hospital wage index can be used to adjust for cost differences across geographic areas.

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