This presentation summarizes MACPAC’s work to date on a new state-level payment index that will compare states’ Medicaid fee-for-service inpatient hospital payments both to other states and to Medicare. This is one of the first attempts to develop a comprehensive comparison of Medicaid inpatient hospital payments across states.
The payment index was constructed by calculating each state’s average payment per stay using Medicaid Analytic Extract eligibility and claims data for inpatient hospital services and applying wage and case-mix adjustments. The initial analysis indicates, among other findings, that base payment varies considerably across states, ranging from 49 percent to 169 percent of the national average. The analysis also suggests that overall, Medicaid payment is comparable or higher than Medicare once supplemental payments and provider contributions are taken into account.