WEST CHESTER, PA — Chester County Hospital has been deemed eligible to receive funding under Pennsylvania’s 2026 Tobacco Settlement Program, according to findings released by the Pennsylvania Department of the Auditor General. The determination comes after a state review verified the hospital’s reported claims and inpatient data related to uncompensated care for uninsured patients.
The audit, conducted under the Tobacco Settlement Act of 2001, examined the hospital’s claims and days data for the fiscal year ending June 30, 2024. Of 23 extraordinary expense claims submitted by Chester County Hospital, 11 were verified as eligible for reimbursement under the state’s extraordinary expense method. These claims reflect cases in which the hospital absorbed the full cost of care for uninsured patients whose treatment expenses exceeded twice the facility’s average claim cost.
The review also substantiated the hospital’s reported 78,534 inpatient days for the prior fiscal year and identified minor reporting discrepancies related to Medicaid fee-for-service and out-of-state insurance days. The Auditor General’s office instructed the hospital to correct these entries in its self-verification process to ensure eligibility for final payment.
The state’s Tobacco Settlement Program, funded through proceeds from the 1998 national tobacco litigation settlement, provides annual subsidies to hospitals that deliver uncompensated or extraordinary care to uninsured patients. Chester County Hospital, part of the University of Pennsylvania Health System, qualifies under the extraordinary expense approach, which rewards facilities for absorbing high-cost cases without third-party reimbursement.
After all hospital reviews are finalized statewide, the Department of Human Services will calculate subsidy entitlements and distribute payments to eligible facilities. Hospitals qualifying under both the extraordinary expense and uncompensated care methods will be permitted to select the option most beneficial to their operations.
The Auditor General’s report emphasizes that accuracy in claims reporting is critical, as failure to remove ineligible or duplicate claims may result in disqualification. Chester County Hospital has until October 31, 2025, to submit any additional verified claims for consideration in the 2026 payment year.
The full report is available through the Pennsylvania Department of the Auditor General’s website at www.PaAuditor.gov.
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