Study Finds Medicaid Supplement Payments Need Restructuring

Research released by the Robert Woods Johnson Foundation finds that Medicaid supplement payments are inefficiently distributed, requiring a significant overhaul to fix. For example, disproportionate share hospital payments are based on figures from 1992 and leave some states receiving less than $100 for uninsured patients, much less than the $1,500 that others receive per uninsured patient.

According to Kelsey Waddill, “Moreover, states have limits on their DSH allotments. There are facility-level caps and annual state caps. And the federal government pays each state its DSH payments based on the state’s federal medical assistance percentage (FMAP). These policies leave some states with a surplus in federal dollars that they cannot spend, not even within the two-year timeframe that they are permitted to spend it. In 2021, $1.4 billion remained from the 2019 fiscal year allotment.”

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(Source: Health Payer Intelligence, April 26^th, 2023)