Hospital spending is a strategic priority for MACPAC’s analytic work due to its substantial effect on overall Medicaid spending. Hospitals receive a complex array of Medicaid payments, including various types of supplemental payments, and payment mechanisms vary significantly across states. This session presents new information on supplemental payments, specifically non-DSH supplemental payments such as upper payment limit (UPL) payments, and state directed payments.
To better understand how states may be targeting supplemental payments to achieve specific policy goals, staff reviewed narrative information on non-DSH supplemental payment goals, targeting criteria, and payment methods that states submit to the Centers for Medicare & Medicaid Services, as well as hospital targeting characteristics from directed payment preprints. This session summarized the types of hospitals that are targeted specifically by supplemental or directed payments and the methodology used to make the payment in most states. Overall, we found wide state variation in the use and targeting of non-DSH supplemental payments and directed payments. This session is part of our long-term work plan on hospital payment and financing.
