Review of New Hampshire's Medicaid Disproportionate Share Hospital Payments During Federal Fiscal Year 2004

EXECUTIVE SUMMARY:

The State agency claimed Medicaid disproportionate share hospital (DSH) payments for fiscal year 2004 that did not comply with the hospital-specific DSH limits imposed by Federal requirements and the State plan.  Of the $194,145,507 that the State agency claimed, $123,494,571 was allowable.  However, the remaining $70,650,936 ($35,325,468 Federal share) was unallowable.  We attribute the excess DSH payments to the State agency's lack of policies and procedures to ensure that its methodology for developing the cost-to-charge ratios used to calculate hospital-specific DSH limits complied with Federal requirements and the State plan. 

We recommended that the State agency (1) refund $35,325,468 to the Federal Government, (2) work with CMS to review DSH payments claimed after our audit period and refund any overpayments, and (3) establish policies and procedures to ensure that it complies with Federal requirements and the State plan in calculating future hospital-specific DSH limits.  The State agency disagreed with these recommendations.

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