What are Intergovernmental Transfers (IGT) and Disproportionate Share Hospital (DSH) payments?

• A. IGT is transfers from state to federal programs to fund Medicaid payments; DSH payments provide additional funds to hospitals serving low-income populations.
• B. IGT are direct federal grants to hospitals; DSH payments are loan programs for hospitals.
• C. IGT funds private providers; DSH reduces payments to hospitals serving high-income populations.
• D. IGT is a municipal tax; DSH is a charity care adjustment.

Answer: (A)

Medicaid financing hinges on transfers between government levels and targeted hospital payments. Intergovernmental transfers are funds moved from state or local governments into the Medicaid program to enable the state to claim federal matching dollars for Medicaid payments. This mechanism helps states maximize the federal dollars they receive to support care for low-income populations. Disproportionate Share Hospital payments are additional payments to hospitals that treat a high share of low-income or uninsured patients, designed to help cover the costs of care that disproportionately burden those facilities.

So, intergovernmental transfers provide the state-supplied funds that the Medicaid program uses to obtain federal matching funds, and disproportionate share payments channel some of that support directly to hospitals serving low-income populations. The other options misstate who provides the funds, who receives them, or the purpose of these programs.