SRC-CDH S.B. 403 75(R)    BILL ANALYSIS


Senate Research CenterS.B. 403
By: Zaffirini
Health & Human Services
3-17-97
As Filed


DIGEST 

Currently, federal law requires state Medicaid programs to make special
payments to hospitals that serve a large or "disproportionate" number of
low-income patients based on the overall cost to those hospitals of
treating indigent patients, less any third-party reimbursements.  These
payments, called Medicaid disproportionate share hospital (DSH, or
"Dispro") payments, are matched by the federal government at approximately
a 2-to-1 rate.  A 1991 Texas law allowed the state to levy an assessment
on certain hospitals and hospital districts for the purpose of funding the
Medicaid disproportionate share hospital program.  In 1993, however, the
federal Health Care Financing Authority adopted regulations that
prohibited assessments on hospitals and hospital districts for the purpose
of funding the Dispro program.  Thus, the state Medicaid program developed
an alternate method of funding the program.  This legislation repeals the
obsolete 1991 Texas law in an effort to prevent payors from incorrectly
deducting an amount equal to the assessment from their payments to
providers.    

PURPOSE

As proposed, S.B. 403 repeals the Act establishing funding of the Medicaid
disproportionate share program through an assessment imposed against
certain hospitals and hospital districts.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Repealer:  Chapter 2, Acts of the 72nd Legislature, 1st Called
Session, 1991 (Article 4494q-2, V.T.C.S.) (Senate Bill No. 82).   

SECTION 2. Emergency clause. 
  Effective date:  upon passage.