Medicaid reimbursement often falls below health care costs (Medicaid shortfall). Therefore, hospitals face financial losses from caring for both uninsured and Medicaid-insured patients. The US government provides disproportionate share hospital (DSH) payments to institutions with large uninsured and Medicaid populations. Anticipating decreased numbers of uninsured patients, the Patient Protection and Affordable Care Act (ACA) reduces DSH payments.1 The ACA also penalizes hospitals for readmissions.2 There will not be large decreases in the number of uninsured children since only a small percentage of children are uninsured. In contrast, a high percentage of children have Medicaid insurance, and institutions will continue to face Medicaid shortfalls. The loss of DSH payments may not be matched by reductions in financial losses from decreases in the number of uninsured patients. In addition, the readmission penalties of the ACA may not adequately adjust for low-income patients or patients with severe health conditions, thereby adversely affecting hospitals with high proportions of these patients.3 We sought to determine which hospitals with pediatric patients may be at highest financial risk from decreases in DSH payments and readmission penalties by identifying hospitals with a disproportionate per-hospital number of discharges of pediatric patients receiving Medicaid and those with a disproportionate per-hospital number of discharges of low-income patients or those who have severe health conditions, respectively.
Colvin JD, Hall M, Gottlieb L, Bettenhausen JL, Shah SS, Berry JG, Chung PJ. Hospitalizations of Low-Income Children and Children With Severe Health ConditionsImplications of the Patient Protection and Affordable Care Act. JAMA Pediatr. 2016;170(2):176-178. doi:10.1001/jamapediatrics.2015.3366