Review of the Commonwealth of Pennsylvania's Medicaid Disproportionate Share Hospital Payments for State Fiscal Year Ending June 30, 2001

EXECUTIVE SUMMARY:

This final report points out that Pennsylvania generally followed the disproportionate share hospital (DSH) payment methodology in the state plan.  Such payments totaled $671 million for state fiscal year 2000-2001.  Inpatient hospital DSH payments totaled $311 million and included payments to acute care general hospitals and freestanding rehabilitation hospitals and to Pennsylvania's Department of Corrections.  Mental health DSH payments totaled $361 million and represented payments to state-owned institutes for mental diseases, private psychiatric hospitals, psychiatric medical rehabilitation and drug and alcohol units of acute care hospitals, and inpatient acute psychiatric care residential treatment facilities.  The approved state plan allowed for all the preceding DSH payments except for payments to Pennsylvania's correctional institutions for services to inmates (about $3 million).  We recommended that the Centers for Medicare & Medicaid Services (CMS) ensure the state comply with CMS' policy regarding the costs of medical care provided to inmates of correctional facilities.