Briefs & Reports

Report Evaluates Uncompensated Care and Medicaid Payments in Texas Hospitals

Texas Health and Human Services Commission

HMA was engaged by the Texas Health and Human Services Commission to perform an independent evaluation of Texas’ Uncompensated Care Pool, as required under the Special Terms and Conditions (STCs) of the State’s Section 1115 waiver, to submit to the Centers for Medicare and Medicaid Services (CMS). The report was submitted to CMS on August 31st.

Consistent with the approach it has taken in other states that operate uncompensated care pools, CMS required Texas to commission a detailed analysis of the state’s uncompensated care costs, payments and the impact of environmental factors and potential policy changes. Pursuant to the waiver Special Terms and Conditions (STCs), the report includes the following:

  1. A detailed description of the composition of current Medicaid hospital payments.
  2. Analysis of Medicaid financing and how the non-federal match is funded.
  3. Estimated cost incurred by hospitals to provide services to Medicaid beneficiaries compared to the cost to the corresponding payments received.
  4. Estimated cost of uncompensated care provided by hospitals and the portion of uncompensated care attributed to charity care.
  5. Analysis of the adequacy of Medicaid payments in relation to cost incurred by hospitals.
  6. Analysis of Texas Medicaid payment adequacy relative to other states.[1]
  7. Assessment of recent economic and environmental trends within Texas that may impact future reimbursement levels and the cost of caring for low-income populations.
  8. Estimated financial impact of: 1) implementing a Medicaid expansion for low-income adults; 2) Medicaid DSH reductions required by the Affordable Care Act (ACA); 3) reestablishing supplemental upper payment limit (UPL) payments; and 4) fully funding Medicaid hospital costs through payment rates.

[1] Note that this portion of the analysis and report were completed by Deloitte Consulting.

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