Hospital Financing 101: Understanding How Texas Hospitals Get Paid
  • Hospital Financing 101

    Understanding How Texas Hospitals Get Paid

Texas hospitals strive to provide the best care to their patients and meet the health care needs of their communities 24 hours a day, 7 days a week, 365 days a year. Fair, stable and adequate payment is key to meeting this mission. But getting paid can be difficult. Hospitals operate under unique economic, legal and regulatory circumstances. They need revenue to provide necessary health care services, but payment often fails to cover the full cost of care provided. And, by law, they must treat anyone who seeks care in their emergency departments, regardless of a patient’s insurance status or ability to pay.

With a growing aging population and advances in medical science, hospitals will remain an essential part of communities’ infrastructure. Understanding hospital financing is a key part of being an advocate not only for Texas hospitals but for patients as well. The Texas Hospital Association’s educational series on hospital financing breaks down the complex ways in which hospitals are paid.

The series will feature various whitepapers, explainer videos and infographics that clarify distinct facets of hospital finance. THA will add these pieces as they become available.


John Hawkins, senior vice president of advocacy and public policy, 512/465-1505

Jennifer Banda, vice president of advocacy, public policy and HOSPAC, 512/465-1046


Medicaid’s Role in Hospital Financing
The first whitepaper discusses Medicaid's role in hospital financing— through reimbursement and supplemental payments. Download

Value Based Payment
This whitepaper discusses the challenges and opportunities Texas hospitals experience to navigate state and federal requirements for specific value-based payment models. Download

Graduate Medical Education
This whitepaper explains the importance of continued state and federal investment in physician training and provides an overview of the sources and limits of their investment. Download

Local Provider Participation Funds in Texas
The local provider participation fund resource shows where LPPFs currently exist and the state legislation that authorizes them. Local hospital districts created LPPFs as a way to provide the non-federal share of Medicaid payments. Download

Rural Hospital Financing
This document, the fourth in the Texas Hospital Association’s series on hospital financing, examines the special financing arrangements in Medicaid and Medicare that target the unique needs and vulnerabilities of rural hospitals. Download

Hospital Payment Sources
This document provides an overview of the major sources of hospital payments and why reimbursement often is insufficient. Download