Finance & Reimbursement
Medicaid and the Hospital Care Assurance Program
Ohio’s Hospital Care Assurance Program is intended to ensure that hospitals that serve a significant number of low-income patients receive adequate financial support. Northeast Ohio hospital leaders are aware of how vital this program is to low-income and medically vulnerable Ohioans and they know that it impacts their bottom lines. That’s why an understanding of Ohio’s Hospital Care Assurance Program is so important and why The Center for Health Affairs Medicaid Web page connects you with all the HCAP information you need to know.
In 1981, the Medicaid Disproportionate Share Hospital (DSH) program was established by Congress to alleviate the financial pressure on hospitals that serve a disproportionate share of those in poverty. Recognizing that safety net hospitals typically incur higher uncompensated care than other hospitals and rely heavily on Medicaid, which historically has low reimbursement rates, Congress authorized DSH payments to assist states in financing these hospitals. Ohio’s program, called the Hospital Care Assurance Program, began in 1988.
Like the traditional Medicaid program, Medicaid DSH funding is also split by the state and federal governments. Ohio secures its portion of DSH funding by assessing an HCAP fee from all of its hospitals. This money is then paired with a match from the federal government and redistributed to hospitals based on a formula determined by the Ohio Hospital Association under the oversight of the Ohio Department of Job and Family Services.
Passage of the Affordable Care Act (ACA) in 2010 marks the next phase in the evolution of the DSH program. Because the ACA is expected to significantly reduce the number of people without health insurance, hospitals are expected to experience lower uncompensated care costs. As a result, the ACA included provisions that will reduce DSH payments each quarter starting in 2014, the same year the individual mandate takes effect. Between 2014 and 2020 DSH reductions are expected to total $18.1 billion.
Find out more information about Ohio’s Hospital Care Assurance Program, including details on the latest HCAP model, by visiting the Ohio Hospital Association’s HCAP Web page.