A recent OIG report analyzes the relationship between Medicaid disproportionate share hospital (DSH) payments and uncompensated care costs in seven states (Kansas, Louisiana, Missouri, New Jersey, New York, North Carolina, and Texas) during fiscal years 2003 through 2007. The OIG reports that, in the aggregate, state-owned institutions for mental disease received DSH payments averaging 92% of their uncompensated care costs and other state-owned hospitals received DSH payments averaging 95% of uncompensated care costs. On the other hand, local public hospital DSH payments averaged 69% of uncompensated care costs and private hospital DSH payments averaged only 38% of uncompensated care costs. The OIG recommends that CMS assess DSH payment distribution and consider requesting legislation to ensure a more even distribution of payments based on uncompensated care costs. CMS concurred with the recommendation.
