Disproportionate Share Hospitals: A Case Study

The Patient Protection and Affordable Care Act (Obamacare) had mame dramatic changes in the field of the health care system, especially in Medicare, that will seriously take effect in American seniors. Indeed, much of the health law’s new spending is financed by spending reductions in the Medicare program. In addition to the provider payment reductions, Obamacare significantly reduces payments to Medicare Advantage (MA) plans by an estimated $156 billion from 2013 to 2022.( Elmendorf, letter to Speaker Boehner). About 27 percent of all Medicare beneficiaries are enrolled in MA plans, a system of regulated and private plans competing against each other as an alternative to traditional Medicare. MA plans are attractive to beneficiaries because they offer more generous and comprehensive coverage than traditional Medicare by capping out-of-pocket costs and offering drug coverage to a rasonable

Department of Health & Human Services, 2015). These provisions were aimed at providing new protections for health insurance consumers, lowering the cost and improving the quality of health care, and increasing access to health insurance and affordable care. While many of the ACA’s provisions had implications for community health centers, the ones that impacted them most directly were the expansion of Medicaid and availability of subsidized health insurance through exchanges and the creation of the Community Health Center Fund, which allocated $11 billion in new funding through fiscal year 2015 for operations, capital projects, and expansion of services to enable community health centers to serve an anticipated 20 million newly insured patients (National Association of Community Health Centers, n.d.; “Valley Community Healthcare,” 2015).

As stipulated in the act, even those with preexisting health conditions can now access the cover without any limits by the law (Whitman, 2015). Consequently, more than 16 million Americans who previously did not have the cover now have the cover. As a result, due to the large pool, insurance premiums paid are much lower. More Americans can now afford to go for checkups hence increasing the chances for early detection of critical health conditions. New illnesses that previously did not exist are now being discovered, especially in the states that the Medicaid expanded

Throughout the early 1980’s and 1990’s the Federal Medicaid program was challenged by rapidly rising Medicaid program costs and an increasing number of uninsured population. One of the primary reasons for the overall increase in healthcare costs is the

The current paper examines the Disproportionate Share Hospital Payment Reduction CMS 2367F rule which was effective on November 18, 2013. The Disproportionate Share Hospital Payment Reduction CMS 2367F is Federal Legislation that was implemented due to the Affordable Care Act. The rule was initially proposed by the Centers for Medicare & Medicaid Services (CMS), HHS on May 13, 2013. The proposed rule was to implement the provision of the Affordable Care Act that reduces Medicaid Disproportionate Share Hospital (DSH) allotments.

These proposals often focus on using hospital DSH payments to expand coverage rather than using these sums to make payments to hospitals, using savings from reductions in other programs, or proposing new revenues (Holahan et al., 1995). The goal is to expand coverage at small new costs to the government (Holahan et al., 1995). The key features of

Ozark Medical Center (OMC) in West Plains, Missouri is one of them. It is considered a Disproportionate Share Hospital or ‘DSH’ and provides charity care. As Jennifer Davidson describes it in her Health and Wealth Update story on KSMU, “Charity care is healthcare that isn’t paid for, usually because the patient doesn’t have money or insurance” (p.1). Today the DSH designated hospitals do not receive the same amount of federal funds (DSH payments) they did before the ACA from 2010 was enacted. A supreme court decision in 2012 ruled the forced Medicaid expansion, which was included in the ACA, unconstitutional for all states and as a result the expansion is now an option for the states. However, Jennifer Davidson explains that when the remaining parts of the ACA were passed, “it included a 75 percent cut in those DSH payments. That’s because another part – the Medicaid expansion part – was supposed to make up for that reduction. So: more people covered by Medicaid, less charity care – and less need for DSH payments” (p.1). There are also cuts in the ACA to Medicare payments, which in addition to the reduced DSH payments could affect a hospitals finances by a large percentage. In Jennifer Davidson’s story, Ozarks Medical Center’s CEO David Zechman explained that “OMC could see a 60% reduction in its bottom line if Medicaid doesn’t get expanded”. OMC is not the only small rural hospital in Missouri which sees

The Affordable Healthcare Act is expected to increase medical coverage to include an additional 30 million people. What has become clearer is that just because coverage was expanded does not mean an expansion of actual care. “When Congress enacted the national health law, it unleashed a potential tsunami of newly insured patients, flooding a delivery system that was already strained and fragile. The American health care infrastructure has had workforce shortages for decades and is not prepared to meet such a vast influx of patients effectively or

The 340B program has continued to grow due to the number of disproportionate share hospitals (DSH) that have become eligible entities and enrolled in the program. “The number of DSH hospitals enrolled in the 340B program increased from 185 entities in 2003 to approximately 970

The justification for this subsidy has changed over time. Originally, the DSH adjustment was intended to compensate hospitals for their higher Medicare costs associated with the provision of services to a large proportion of low-income patients. Now, the adjustment is considered as a way to protect access to care for Medicare beneficiaries. The Affordable Care Act as amended by the Reconciliation Act will reduce hospitals’ DSH payments starting in FY2014 equal to 25% of what otherwise be made. Acute care hospitals will be paid additional amounts, which will depend on the difference in the hospital’s DSH payments under this Act, the difference in the percentage change in the uninsured under-65 population from 2012, and the percentage of uncompensated care provided by the hospital relative to all acute care hospitals. It has beens estimated that this policy will save $22.1 billion from FY2015 to

The MPHFP enables certain rural hospitals to be licensed as Critical Access Hospitals (CAHs) that receive cost-based reimbursement from Medicare in return for limiting their services (Rural Assistance Center- CAH Frequently Asked Questions, 2012). Under costbased reimbursement, health care providers receive reimbursement based on actual costs incurred which is a more generous reimbursement method than allowed by the prospective payment system (Gapenski L, 2009). However, only those providers that fall under the following categories are eligible to become CAHs: currently participating Medicare hospitals; hospitals that ceased operation after November 29, 1989; or health clinics or centers (as defined by the State) that previously operated as a hospital before being downsized to a health clinic or center (Department of Health and Human Services, 2013). A Medicare participating hospital that wishes to convert to a CAH, has to meet certain criteria including (Department of Health and Human Services, 2013):        Be located in a state that has established a State rural health plan for the State Flex Program; Be located in a rural area or be treated as rural under a special provision that allows qualified hospital providers in urban areas to be treated as rural for purposes of

A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate

Difficult to believe is an understatement when discussing hospital parking fees. It lends weight to the fact that, regardless of how we label them, hospitals are for profit. Generally, given the purpose for being at the hospital, adding financial strain, as you have eluded too, does not seem right. Sure, it can be said that 6 dollars is not financial strain, but if you have an ill spouse admitted for two weeks, there can be a significant disbursement of funds just in parking. Saying that rates need to be reasonable or perhaps stepped in some way might be a negotiable beginning to a conversation the hospitals likely will not want to

A Canadian hospital specializing in hernia operations is considering whether and how to expand the reach of its seraices,

HCG has several factors which give it an advantage over multispecialty chains like Arvind and NH and even over cancer focused centres which are located mainly in the cities.