• Article
  • October 27, 2017

Data Examines Medicaid Underpayment in Children's Hospitals

A pediatric-focused report reveals the disparity in reimbursements.


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Adult and pediatric hospitals caring for Medicaid patients received payments of 90 cents for every dollar spent, based on FY2015 survey data, according to the American Hospital Association (AHA). AHA also reported 60 percent of hospitals received Medicaid payments at less than cost. But pediatric-only data from FY2016 in the Children's Hospital Annual Benchmark Report (ABR) indicates children's hospitals received payments ranging from 35 cents to 86 cents for every dollar spent.

Ninety-two percent of children's hospitals received Medicaid payments at less than cost, which includes disproportionate share (DSH) and tax appropriation payments. As legislators look for ways to reduce spending, it's important to understand how Medicaid supplemental payments work. Without these payments, children's hospitals' Medicaid underpayment would expand from 12 percent to 22 percent, directly affecting the services and care children's hospitals provide.

Send questions or comments to magazine@childrenshospitals.org.