Review of Illinois Medicaid Disproportionate Share Hospital Payments to the University of Illinois at Chicago Hospital

EXECUTIVE SUMMARY:

The objective of this review was to determine whether disproportionate share hospital (DSH) payments to the University of Illinois at Chicago (UIC) Hospital exceeded the hospital-specific limits imposed by the Social Security Act.  We found that the State paid about $140.3 million (Federal share) in excess of UIC Hospital's costs of providing inpatient and outpatient services to Medicaid and uninsured patients during State fiscal years 1997 through 2000.  The excessive payments occurred because the State did not have effective procedures to ensure compliance with the hospital-specific limits or with State plan and State Administrative Code requirements.  We recommended that the State (1) refund $140.3 million to the Federal Government, (2) compare annual Medicaid payments with the actual cost of providing services to Medicaid and uninsured patients for all hospitals receiving DSH payments and, if applicable, make retroactive adjustments as required by the State plan, including the recovery of any identified overpayments, and (3) provide clear guidelines on properly reporting uncompensated charity care charges.