Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. New York

09/01/2002

New York hospitals file an annual institutional cost report with the New York State Department of Health. The cost report collects utilization and revenue information for 14 payer categories, including separate categories for Medicaid fee-for-service enrollees, Medicaid managed care enrollees, self-pay, charity care and courtesy care patients. Not all categories (including Medicaid HMO) are used consistently. Gross revenues, net revenues and bad debt by payer are reported by type of service. We used data from the reports filed for calendar year 1998 (the fiscal year for all hospitals is 1/1/98-12/31/98). The cost report also collects information on the hospital's contributions to the indigent care pool, the DSH payments that it received, and its DSH cap. The Greater New York Hospital Association provided us with an electronic file with selected data from the institutional cost report that also had supplemental information from the Department of Health on indigent care pool distributions. Key data that we used included the following:

  • Gross revenues by payer. While the cost report provides for separate reporting of Medicaid fee-for-service and managed care revenues, the file we obtained did not include Medicaid managed care revenues in the Medicaid revenue data because of inconsistent reporting. Information on Medicaid managed care enrollees is often combined with data for other HMO enrollees. About 25 percent of Medicaid enrollees in New York are in managed care (KFF, 2002).
  • Medicaid shortfalls. We could only determine the shortfalls for Medicaid fee-for-service enrollees.
  • DSH payments. DSH distributions are reported as separate line items and are not included in Medicaid patient revenues. DSH provider assessments and contributions on behalf of third-party payer are also reported as separate line items. We did not include the latter in determining "new" DSH since the funds are essentially a "pass-through" from third-party payers that do not contribute directly to the indigent care pool.
  • Bad debt and uncompensated care. Bad debt net of recoveries is reported by payer class by type of service. There are separate revenue lines for self-pay, charity care and courtesy care.

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