The California's DSHprogram is funded entirely through federal match of intergovernmental transfers (IGTs) from public entities (county hospitals and the University of California clinics) to the Medi-Cal Inpatient Adjustment Fund. The amount of IGTs paid by a public entity is based on the ratio of the hospital's projected DSHpayments to that of al
Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. 8: Three State Analysis of Alternative DSH Policies
In this chapter, we discuss the results of our analyses using the HCUP SID and detailed financial data for hospitals located in California, New York, and Wisconsin. We chose these states because they participate in HCUP, require uniform financial reporting systems, have different types of Medicaid DSH programs and, perhaps most importantly, hospit
There are several findings from the HCUP analysis that have import in designing a DSH allocation policy. First, it appears that the patient population (e.g., with or without Medicare SSI beneficiaries) included in the allocation statistic is more important than how the care provided to those patients is quantified. Ideally, the allocation statisti
Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Comparison of Current and Alternative DSH Policies
Table 7.4 summarizes the results of our analysis of the current distribution of DSH payments to the hospitals in the HCUP file. Most of the hospital categories in the first column are self-explanatory. The grouping of hospitals by the percentage of low-income patient days is based on the proportion of low-income patient days attributable to Medic
One objective of the DSH allocation policy is to use an indirect measure of a hospital's costs of providing care to low-income patients. When discharges are used as an allocation statistic, differences in a hospital's case mix need to be taken into account. Since data on a hospital's overall case mix are not readily available, we examined measures
Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Low-Income Patient Shares
We examined the relationship between the proportion of low-income patients by payer to address the question of whether one of the more readily available statistics, e.g., the percentage of Medicaid days, is an appropriate proxy for a hospital's percentage of low-income days. We combined Medicare SSI and Medicaid days into a measure of "joint" days
We used the HCUP data to establish the proportion of total inpatient days, total discharges, total charges, and case-mix index (the average DRG relative weight) attributable to each payer. We estimated the Medicare SSI statistics by applying the hospital's SSI ratio to the Medicare data. Doing so assumes that the Medicare SSI patients have the sam
Consistent with other analyses, we used the adjusted discharges and adjusted days from the 1998 AHA survey. As previous noted, these measures include outpatient volume by adjusting the inpatient statistic by the ratio of gross patient revenues to gross inpatient revenues.
We used the HCRIS data for FY1998 to develop each hospital's cost-to-charge ratio for inpatient hospital services. We also used the total margin and total margin net of DSH measures used in our evaluation of measures of financial viability (see Chapter 5).
Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. HCUP National Inpatient Sample
The HCUP national inpatient sample (NIS) is comprised of a 100 percent claims for inpatient discharges occurring during 1998 in a nationally representative sample of about 20 percent of the hospitals in 24 states. In total, there are 984 community hospitals stratified on five characteristics: ownership/control, bed size, teaching status, urban/rur
Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. 7. Exploratory Analyses Using National HCUP Data
In this chapter, we report the results of our analyses using the HCUP national inpatient sample. We used the HCUP data to explore the relationship between various inpatient measures of low-income patient care that rely on inpatient utilization or gross revenue data by payer class and the implications this might have for using the different measure
Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Exploratory Analyses
As discussed in Chapter 3, data were not available that allowed us to examine the alternatives with a national set of hospitals. Our exploratory analyses drew on two different sets of hospitals. The first set consists of the hospitals that are represented in the HCUP national sample. We were able to explore the sensitivity of DSH allocations to l
Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Resource Differentials
One issue in allocating DSH funds is the extent to which the state's available resources to finance health care for low-income persons should be taken into account in the fund distribution formula. Under current law, Medicare DSH payments are based on national allocation rules without regard to state resources while the federal share of Medicaid D
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
We avoided establishing a direct DSH subsidy for inefficiencies by expressing the low-income measures as a percentage of revenues or costs rather than absolute dollar amounts. However, this approach also requires that the allocation formula include a measure to take into account differences in patient volume across hospitals ( Table 6.2 ). While i
Analysis of the Joint Distribution of Disproportionate Share Hospital Payments. Measures Derived From Financial Data
Measures 2.1 and 2.2 use financial data to measure the percentage of gross revenue attributable to low-income patients. Measure 2.1 is similar to MedPAC model's definition of a hospital's low-income share. 1 Gross revenues derived from financial data have several advantages over those derived from inpatient claims data.