Medicaid Supplemental Payments: Where Do They Fit in Payment Reform?

Currently, Medicaid payment reform initiatives have largely neglected to address supplemental payments. Disproportionate Share Hospital (DSH) Payments and Upper Payment Limit (UPL) payments represent more than one-third of Medicaid fee-for-service payments to hospitals, and hospital payments constitute 23 percent of all Medicaid spending.

According to the CHCS brief, prepared by Manatt Health Solutions, supplemental payments are a critical source of revenue to hospitals, especially safety-net hospitals. This policy brief examines the need to align supplemental payment arrangements with broader payment reform objectives to ensure that beneficiaries have access to quality, cost-effective care.

Read the report here.