Medicaid Supplemental Pool Payments

The TennCare waiver provides funding authority for hospital supplemental pool payments that are designed to offset unreimbursed Medicaid, uninsured, and charity care costs.  Within the waiver, two funds are established – the Virtual DSH Fund and the Uncompensated Care Fund for Charity Care, referred to as the Charity Care Fund.

Funding in Virtual DSH, which includes the unique Statutory DSH allotment for Tennessee, is used to reimburse hospitals for uncompensated care.  The payment methodology used to distribute payments from this fund ensures payments are proportional to a hospital’s Medicaid volume, unreimbursed Medicaid costs, and charity care costs.  TennCare’s total spending authority for Virtual DSH is $508.9 million with $223 million distributed to hospitals.

The sub pools within Virtual DSH are:

  • Statutory DSH – federal allotment of $53.1 million
    • Total computable for SFY24 is $80 million
  • Virtual DSH pools – $127.7 million
    • Safety Net, Children’s, Other Acute, Psychiatric pools
  • Critical Access Hospital (CAH) Cost-based Reimbursement – $15 million

Certified Public Expenditure (CPE) authority ($240 million) is also included in the Virtual DSH fund. Currently, TennCare uses about $83 million from this sub pool.

Funds in the Charity Care Fund are used for healthcare costs to offset uncompensated medical care that is provided for low-income individuals that are uninsured.

The sub-pools in the Charity Care Fund are:

  • Uncompensated Charity & Self-Pay – $143 million
  • Research & Rehabilitation Pool – $3 million
  • Safety Net Charity Care pool – $35 million
  • Public Hospital Supplemental Pool (IGT) – $100 million
  • Meharry Medical College Pool – $10 million

The Charity Care Fund is currently authorized for $589.9 million.  In SFY24, $254.8 million is distributed to hospitals.

TennCare Supplemental Pools and the Joint Annual Report of Hospitals Webinar

This webinar was presented on June 8, 2023 by Amanda Newell, Vice President of Financial Policy. This recording displays the slides that were shown during the webinar and plays the sound of the presenters.

You may print out the presentation file (available below) and follow along with this recording, making notes.

Slides | Recording

Additional information is provided for hospitals to understand the methodology that will be used for the new FY 2024 Supplemental Pools, as discussed in the webinar.

SFY 2024 Supplemental Pool Eligibility