1. FY 2005 Indigent Care Trust Fund Disproportionate Share Hospital Program Presented to Board of Community Health January 13, 2005

2. Presented to Board of Community Health January 13, 2005 Overview Hospital Specific DSH Limits Hospital Eligibility DSH Allocation Methodology

3. Presented to Board of Community Health January 13, 2005 Hospital-Specific DSH Limits Based on data self-reported on the 2003 Hospital Financial Survey DSH Limit equal to Medicaid and Uninsured uncompensated care – DCH uses historical cost data compared to cash collections to determine what care was not paid for by any other payers – Data inflated to approximate today’s uncompensated care

4. Presented to Board of Community Health January 13, 2005 Hospital-Specific DSH Limits Medicaid Loss Calculation FY 2004 Medicaid Claims- Based Data Data from Cost Reports available in 2002 Estimated Accrued Payments FY 2005 Hospital reported data Data from 2003 Hospital Financial Survey Cash Payments

5. Presented to Board of Community Health January 13, 2005 Hospital-Specific DSH Limits Uninsured Loss Calculation FY 2004 Hospital reported data Data from 2001 Hospital Financial Survey Estimated Accrued Payments FY 2005 Hospital reported data Data from 2003 Hospital Financial Survey Cash Payments

6. Presented to Board of Community Health January 13, 2005 Hospital-Specific DSH Limits Hospital Financial Surveys subject to state audit DCH contracts with Georgia Department of Audits for audits All surveys subject to desk reviews On-site reviews for – Hospitals with the largest DSH limits – Hospitals with unusual changes in data

7. Presented to Board of Community Health January 13, 2005 Hospital Eligibility for DSH Participation Federal Criteria (MUST MEET BOTH) Ability to provide obstetric services to Medicaid members Medicaid inpatient utilization rate of at least 1 percent

8. Presented to Board of Community Health January 13, 2005 Hospital Eligibility for DSH Participation State Criteria (MUST MEET AT LEAST ONE) Medicaid inpatient hospital utilization exceeds certain level Low-income inpatient utilization rate exceeds 25 percent of revenue Total Medicaid charges exceed 15 percent of revenue Non-state hospital with the largest number of Medicaid admissions in its MSA.

9. Presented to Board of Community Health January 13, 2005 Hospital Eligibility for DSH Participation State Criteria (continued) (MUST MEET AT LEAST ONE) Children’s hospital Designated regional perinatal center Medicare rural referral center/Medicare DSH provider Board of Regents teaching hospital Small, rural, public hospital with Medicaid inpatient utilization of at least 1 percent

10. Presented to Board of Community Health January 13, 2005 DSH Allocation Methodology Information Needed Amount of Federal DSH funds available Hospital-Specific DSH Limits Rural or Urban Designation for Hospitals Public or private status of hospital

11. Presented to Board of Community Health January 13, 2005 DSH Allocation Methodology Policies No hospital receives more than their hospital- specific DSH limit Intergovernmental transfers from public facilities are used to match federal DSH funds and make DSH payments – For large private or urban private hospitals, the allocation is capped at 50% of the hospital specific DSH limit

12. Presented to Board of Community Health January 13, 2005 DSH Allocation Methodology Policies The Department calculates an initial and secondary DSH allocation based on available funds. – In the initial allocation, small, rural hospitals receive 100% of their hospital-specific DSH limits. – The secondary allocation distributes the rest of the available DSH funds to all other, eligible hospitals.

13. Presented to Board of Community Health January 13, 2005 FY2005 DSH Summary FY 2004FY 2005 Aggregate DSH Limits$751,535,617$866,775,780 Available DSH Funding$424,724,498$419,237,251 Number of Eligible Hospitals 96102 Number of Hospitals Newly Eligible in FY2005 13 Number of Hospitals Ineligible in FY 2005 that participated in FY 2004 7

14. Presented to Board of Community Health January 13, 2005 FY2005 Interim DSH Payments Based on 75% of preliminary FY 2005 allocation 15% Stop Loss and Stop Gain applied based on FY 2004 allocations – No more than 90% of FY 2005 allocations would be made for hospitals subject to Stop Loss provisions Intergovernmental Transfers requested by January 18, 2005 Payments made by January 24, 2005

15. Presented to Board of Community Health January 13, 2005 Next Steps Interim Payments in January 2005 ICTF Advisory Committee Review of Audit Standards Additional On-Site Audits – Hospitals with more than 25% change in their FY 2005 DSH allocations when compared to FY 2004 – Safety Net Hospitals – Newly Eligible for DSH in FY 2005 Remaining DSH payments paid after audits completed – Subject to approved primary care plans