State government considers changes to program that reimburses hospitals for uncompensated care
South Carolina hospital administrators will head to Columbia on Wednesday to discuss proposed changes to a multimillion-dollar program that reimburses hospitals for services delivered to poor, uninsured patients.
On the Web
A full list of the proposed changes to the DSH program is available on the Medicaid agency’s website, www.scdhhs.gov.
If you go
A public forum on the proposed changes will be held from 3 to 5 p.m. Wednesday at BlueCross BlueShield, 8901 Farrow Road, Columbia.
Hospitals are required by law to administer emergency care to the uninsured, even patients with no ability to pay their hospital bills.
DSH payments to Charleston-area hospitals
The S.C. Medicaid agency will distribute about $474 million to hospitals this fiscal year to help pay for health care delivered to uninsured, poor patients.
A hospital’s share of that money depends on the amount of free or discounted care it offers patients.
During the 2014 fiscal year, these Charleston-area hospitals are projected to receive the following Disproportionate Share Hospital (DSH) payments:
Medical University Hospital: $46.7 million
Trident Health: $15.3 million
Roper Hospital: $12.5 million
St. Francis Hospital: $6.8 million
Mount Pleasant Hospital: $2.7 million
East Cooper Medical Center: $2.2 million
The state government uses a $474 million program called Disproportionate Share Hospital payments to pay them back for some of those costs. The industry simply calls these DSH (pronounced “dish”) payments.
“Nationwide the DSH program has for a long time been just seen as an accounting exercise,” said Tony Keck, director of South Carolina’s Medicaid agency, which distributes DSH payments to hospitals in the state.
“Hospitals at the end of the year send you a cost report that says, you know, ‘I had $20 million of uncompensated care, please send me a check for as much of it as you can.’ It’s really just math.”
Proposed changes to the DSH program will be the subject of a public forum in Columbia on Wednesday.
The Medicaid agency wants to make sure those free or discounted services are delivered to patients who actually need financial help and have no other options to pay.
“What we want to do is start analyzing that data to really find out who are these people?” Keck said. “Are 733,000 uninsured people actually going to hospitals, or are 50,000 people just going and using a lot of services? Is it emergency services? Is it for cancer? Nobody knows.”
Hospitals will need to start providing additional paperwork on these patients to preserve their share of the money, he said.
Bret Johnson, chief financial officer at Roper St. Francis Healthcare, said this change should not be trouble for hospitals to comply with.
“It’s not a negative, it’s not disruptive, and it’s really where the payer market is moving,” Johnson said.
Keck said the Medicaid agency also is considering other potential changes to the DSH program. That includes possibly standardizing the formula used to qualify patients for charity care. Currently, charity care policies differ from hospital to hospital.
For example, East Cooper Medical Center and Trident Health offer charity care to patients who earn up to 200 percent of the federal poverty level. Patients at Roper St. Francis Healthcare qualify for free or discounted care if they earn up to 400 percent of the federal poverty level.
“We want to pay for the people who are poorest and neediest and have no other way to pay and no other potential services available,” Keck said. “But we can’t do that now the way that it works.”
He said the agency is also considering a more radical change that would allow Medicaid to allocate DSH payments upfront, instead of reimbursing hospitals for care that has already been delivered.
“That’s the type of thing that will take many months to negotiate with the hospitals and with CMS (the Centers for Medicare & Medicaid Services),” he said.
Reach Lauren Sausser at 937-5598.