Factors Affecting the Development of Medicaid Hospital Payment Policies–Findings from Structured Interviews in Five States

Published by Medicaid and CHIP Payment and Access Commission, 2018, 
by Thomas Marks, Kathy Gifford, Steven Perlin, Melisa Byrd, and Timothy Beger

MACPAC contracted with Health Management Associates to better understand how states develop their hospital payment policies. We interviewed state, hospital, and managed care representatives from five states that vary in their use of supplemental payments and financing approaches (Arizona, Louisiana, Michigan, Mississippi, and Virginia). The most commonly-used DRG model in Medicaid is the All-Patient Refined Diagnostic Related Groups (APR DRGs) model developed and maintained by 3M Health Information Systems. Key findings from the study include:

  • the availability of financing for the non-federal share of Medicaid payments has affected states’ use of base and supplemental payments;
  • the use of Medicaid managed care has not substantially affected Medicaid payments to hospitals; and,
  • the adoption of prospective payment systems and value-based payment models is slow.

Publication Date: 2018

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Source: Health Management Associates (HMA)