Examining the effects of the medicaid expansion on uncompensated care and DSH payments

OBJECTIVE: The study aimed to estimate the effect of the Affordable Care Act (ACA) Medicaid expansion on safety-net hospital uncompensated care. Data from a balanced panel of short-term, general, nonfederal, Medicare-certified hospitals were obtained from Medicare cost reports from 2011 to 2014. STUDY DESIGN: Difference-in-differences and logistic analyses were performed using hospitals in nonexpansion states as the control group. The dependent variable was hospital provision of uncompensated care. The data came from the National Bureau of Economic Research website. PARTICIPANTS: Medicaid-expanded and non-Medicaid-expanded population. INTERVENTION: Medicaid expansion. MAIN OUTCOME MEASURES: Improve fiscal measures on Disproportionate Share Hospitals (DSH) and understand the effects of Medicaid expansion on hospital operations. RESULTS: Medicaid expansion significantly reduced hospital provision of uncompensated care in 2014. In particular, within expansion states, DSH hospitals saw reductions beyond those experienced by non-DSH hospitals. CONCLUSIONS: This study indicates that the Medicaid expansion increased access to Medicaid insurance. Expanded states showed a decrease in uncompensated care in comparison to non-expanded states. However, although a decrease in uncompensated care is apparent, hospitals in expanded states did not decrease their costs, which raises further questions about whether Medicaid expansion had a direct effect on hospital service costs.