Medicare's disproportionate share adjustment and the cost of low-income patients
This study investigates whether or not hospitals have higher costs for inpatient care provided to low-income Medicare patients, after controlling for other cost differences already accounted for by Medicare payments. Differences were estimated in Prospective Payment System-adjusted costs and outlier-adjusted length of stay for low-income patients relative to matching non-low-income cases from the same hospital in 85 high-volume diagnosis-related groups. Low-income Medicare patients do not have costlier hospital stays, although their stays are 2.5% longer. The authors conclude that disproportionate share payments are not justified on grounds of higher treatment costs.