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Medicaid: Disproportionate Share Payments to State Psychiatric Hospitals

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Report Type Reports and Testimonies
Report Date Jan. 23, 1998
Report No. HEHS-98-52
Subject
Summary:

In 1996, state psychiatric hospitals in the six states GAO reviewed received between 20 and 89 percent of the total Medicaid disproportionate share hospital payments, even though state psychiatric hospitals represented a much smaller portion of the number of hospitals in the states and even though state psychiatric hospitals often had lower Medicaid utilization rates than did other hospitals. In each of the six states, payments to state psychiatric hospitals covered more than 90 percent of the maximum allowable payment to such facilities. These large payments have enabled states to obtain federal matching funds that indirectly cover costs of services that state Medicaid programs cannot pay for directly. Implementation of restrictions on payments to mental institutions in the Balanced Budget Act of 1997 should reduce some of these large payments.

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