Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Medicaid shortfall

09/01/2002

To define the Medicaid shortfall, we first estimated Medicaid costs by applying an overall cost-to-charge ratio to Medicaid gross charges. We then estimated the amount received or receivable from the Medicaid program (gross charges less contractual allowances) net of any DSH amounts reported as Medicaid patient revenue (or, in the case of WI, the amount reported by the state for FY1998). By subtracting only the contractual allowances, bad debts attributable to Medicaid patients are included with other bad debts.

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