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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicaid Disproportionate Share Funds Flow in the State of Missouri," (A-07-02-02097)

April 8, 2003

Complete Text of Report is available in PDF format (620 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Our objective was to review the role of the Missouri Hospital Association (MHA) and its subsidiary corporation MHA Management Services Corporation (MHA/MSC), in the disbursement of Medicaid disproportionate share (DSH) funds to hospital providers.  A further objective was to determine whether DSH funds were received by Missouri hospitals in accordance with federal regulations and the Missouri Medicaid State plan (State plan).  During the three-year period of our review, the State of Missouri claimed $1.5 billion in federal financial participation (FFP) for DSH payments to hospitals.  We found that Missouri hospitals receive DSH payments in accordance with federal regulations and the State plan.  However, subsequent voluntary redistributions of DSH funds by the MHA/MSC result in DSH funds being used to support Missouriís Federal Reimbursement Allowance (FRA) program rather than to provide financial support to hospitals that serve a disproportionate share of Medicaid patients.