Hospital Financing 101


Texas hospitals are lifesavers in their communities. Fair, stable and adequate payment is key to meeting this mission.

Hospitals operate under unique economic, legal and regulatory circumstances. They need revenue to provide necessary health care services, and also to invest in care advancements and new technologies for the future. Unfortunately, payment often fails to cover the full cost of care provided. And, by law, hospitals must treat anyone who seeks care in their emergency departments, regardless of a patient’s insurance status or ability to pay.

Understanding hospital financing is a key part of being an advocate for Texas hospitals and their patients.

THA’s Hospital Financing 101 Series breaks down the complex ways in which hospitals are paid.

Hospital Financing 101 Series

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.

Hospital Payment Sources

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

Graduate Medical Education

This white paper explains the importance of continued state and federal investment in physician training and provides an overview of the sources and limits of their investment. 

Medicaid Financing

This explainer breaks down the Texas Medicaid program’s vital role in how hospitals are paid.