Audit of the Louisiana Medicaid Disproportionate Share Hospital Program - Louisiana State University Medical Center Hospitals Overseen by the Health Care Services Division

Medicaid provides that States make additional payments (called disproportionate share hospital [DSH] payments) to hospitals for the uncompensated costs of serving disproportionate numbers of low-income patients with special needs. This final report points out that in the State's 1998 fiscal year Louisiana's DSH payments to nine hospitals exceeded uncompensated costs by approximately $22.2 million. Also, we could not express an opinion on the allowability of $4.2 million of claimed overhead costs because we could not determine the reasonableness of the methodology used to calculate the costs. In addition to financial adjustments, we recommended implementation of controls to assure DSH payments are determined accurately in the future. Auditee officials generally concurred, and agreed to implement the recommendations contained in our report.