Report: Safety-net hospitals need targeted, more Medicaid payments

As safety-net hospitals across the country worry about reimbursement cuts, a new report from the Commonwealth Fund offers strategies to help safety nets continue to treat poor and uninsured patients.

First, the report calls on state Medicaid departments to increase reimbursements for safety-net hospitals serving the largest numbers of Medicaid patients. However, increased rates should be tied to delivering high-quality and efficient care, the report noted.

The Commonwealth Fund also calls for more precise targeting of Medicare and Medicaid disproportionate share hospital (DSH) payments, especially given health reform will cut billions in DSH payments over the next 10 years. Both Medicare and Medicaid DSH payments should be directed at uninsured patients, as well as linked to specific services provided to specific uninsured patients.

Noting that most safety-net hospitals lack the operating margins to invest in advanced technologies, implement new delivery models and upgrade their infrastructure, the report recommends using Medicaid waivers to allocate the necessary funding to safety nets, citing success in New York and California.

In New Jersey, Gov. Chris Christie (R) is addressing the state's disproportionate share healthcare payments, proposing a plan to share $675 million in charity care payments more equitably among hospitals, FierceHealthFinance previously reported.

Roughly 90 percent of the funds will be fixed at fiscal year 2012 allocations, while the other 10 percent will be shifted away from hospitals that treated relatively fewer uninsured patients between 2009 and 2010, according to the New Jersey Hospital Association.

To learn more:
- check out the report (.pdf)
- here's the report summary
- read the FierceHealthFinance article