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Providers that care for disproportionate numbers of disadvantaged patients tend to perform less well than other providers on quality measures commonly used in pay-for-performance programs. This can lead to the undesired effect of redistributing resources away from providers that most need them to improve care. We present a new pay-for-performance scheme that retains the motivational aspects of standard incentive designs while avoiding undesired effects. We tested an alternative incentive payment approach that started with a standard incentive payment allocation but then "post-adjusted" provider payments using predefined patient or provider characteristics. We evaluated whether such an approach would mitigate the negative effects of redistributions of payments across provider organizations in California with disparate patient populations. The post-adjustment approach nearly doubled payments to disadvantaged provider organizations and greatly reduced payment differentials across provider organizations according to patients' income, race/ethnicity, and region. The post-adjustment of payments could be a useful supplement to paying for improvement, aligning the goals of disparity reduction and quality improvement.

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State Medicaid programs make Medicaid disproportionate share hospital (DSH) payments to hospitals to help offset costs of uncompensated care for Medicaid and uninsured patients. Unlike most Medicaid spending, annual DSH allotments for each state are capped. Under the Patient Protection and Affordable Care Act of 2010 (ACA), DSH payments will decrease starting in fiscal year (FY) 2014 and continuing through FY 2020. This paper describes the proposed rule for reducing these federal allotments, which was released on May 15, 2013, by the Centers for Medicare & Medicaid Services (CMS). Comments on the proposed rule are due July 12, 2013.

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Neuro-ophthalmology is facing a serious human resource issue. Few are entering the subspecialty, which is perceived as being poorly compensated compared with other subspecialties of ophthalmology. The low compensation comes from the fact that 1) non-procedural encounters remain undervalued, 2) efforts that benefit other medical specialists are not counted, and 3) the relatively low expenses of neuro-ophthalmologists are not factored into compensation formulas. Mission-based budgeting, which forces academic departments to be financially accountable without the expectation of fiscal relief from medical schools or practice plans, has exacerbated the compensation issue. Solutions must come from within neuro-ophthalmology, academic departments, medical schools, and medical practice plans. They include 1) providing educational resources so that neuro-ophthalmologists need not spend so much time teaching the basics, 2) factoring into compensation the impact of neuro-ophthalmologists in teaching and on revenue generation by procedure-based specialists, 3) improving the efficiency of neuro-ophthalmologists in their consultative practices by providing ample clerical support and other measures, 4) providing contractual salary compensation by departments such as neurosurgery to recognize the contributions made by neuro-ophthalmologists, and 5) reorganizing the academic clinical effort as multidisciplinary rather than departmental.

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OBJECTIVE: To examine the influence of state strategies aimed at increasing federal Medicaid matching dollars on the design of states' Medicaid managed care programs. STUDY DESIGN: Data obtained from the 1996-1997 case studies of 13 states to examine how states have adapted the design of their Medicaid managed care programs in part because of maximization strategies, to accommodate the many roles and responsibilities that Medicaid has assumed over the years. PRINCIPAL FINDINGS: Our study showed that as states made the shift to managed care, some found that the responsibilities undertaken in part through maximization strategies proved to be in conflict with their Medicaid managed care initiatives. Among other things, the study revealed that most states included provisions that preserved the health care safety net, such as adapting the managed care benefit package and promoting the participation of safety net providers in managed care programs. In addition, most of the study states continued to pay special subsidies to safety net providers, including hospitals and clinics. CONCLUSIONS: States have made real progress in moving a large number of Medicaid beneficiaries into managed care. At the same time, many states have specially crafted their managed care programs to accommodate safety net providers and existing funding mechanisms. By making these adaptations states, in the long run, may compromise the central goals of managed care: controlling costs and improving Medicaid beneficiaries' access to and quality of care.

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The Colorado Medicaid Program in years past relied on disproportionate share hospital (DSH) payment programs to increase access to hospital care for Colorado citizens, ensure the future financial viability of key safety-net hospitals, and partially offset the state's cost of funding the Medicaid program. The options to finance Medicaid care using DSH payments, however, recently have been severely limited by legislative and regulatory changes. Between 1991 and 1997, a creative Medicaid refinancing strategy called the major teaching hospital (MTH) payment program enabled $131 million in net payments to be distributed to the two major teaching hospitals in Colorado to provide enhanced funding related to their teaching programs and to address the ever-expanding healthcare needs of their low-income patients. This new Medicaid payment mechanism brought the state $69.5 million in Federal funding that otherwise would not have been received.

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