Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Texas Medicaid Inpatient Disproportionate Share Hospital Program for Hospital Fiscal Years 1996 through 1998," (A-06-01-00041)

February 24, 2003

Complete Text of Report is available in PDF format (1.69 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This report points out that the Texas Medicaid state plan, with regard to calculating disproportionate share hospital (DSH) payment limits, did not comply with the intent of the Omnibus Budget Reconciliation Act (OBRA) of 1993. The state made payments to hospitals on a progressive basis, but did not have controls in place to assure that payments did not exceed the actual costs of providing services to patients, which we believe was the intent of the OBRA of 1993. As a result, DSH payments totaling approximately $511.4 million ($319.2 million federal share) were paid to Texas hospitals in excess of hospital specific limits for hospital fiscal years 1996 through 1998. Among other things, we recommended that Texas work with the Centers for Medicare and Medicaid Services to address and resolve the $511.4 million ($319.2 million federal share) of DSH payments in excess of hospital specific limits.