PAOLI, PA — Paoli Hospital has been identified as eligible to receive state funding through Pennsylvania’s 2026 Tobacco Settlement Program following a financial review by the Department of the Auditor General. The report, released in September, verified the hospital’s data submissions related to uncompensated care provided to uninsured patients.
Under the Tobacco Settlement Act of 2001, hospitals may qualify for annual payments from the Pennsylvania Department of Human Services (DHS) based on either uncompensated care totals or extraordinary expense claims. The extraordinary expense approach compensates facilities for high-cost cases in which uninsured patients received care exceeding twice the hospital’s average claim cost.
The Auditor General’s office reviewed 14 potential extraordinary expense claims submitted by Paoli Hospital for the fiscal year ending June 30, 2024. Of these, eight were verified as eligible, meeting the program’s requirements for uninsured patient care and cost thresholds. Six claims were disqualified due to insurance coverage, payment by Medical Assistance, or active billing status.
The audit also confirmed the hospital’s inpatient and Medicaid day counts for the fiscal year ending June 30, 2023, showing no discrepancies between reported and verified data. Accurate reporting is essential, as it determines eligibility and payment amounts under the program.
The findings position Paoli Hospital—part of Main Line Health—to receive subsidy consideration under the extraordinary expense method for 2026. DHS will finalize subsidy entitlements for all qualifying hospitals once statewide verifications are complete. Facilities meeting criteria under both the uncompensated care and extraordinary expense methods will be allowed to choose the calculation most beneficial to their operations.
Paoli Hospital has until October 31, 2025, to submit any additional eligible claims for review, provided they exceed the facility’s threshold of $146,094 in total charges. Failure to update ineligible claims during the self-verification process could impact final payment eligibility.
The full report is publicly available through the Pennsylvania Department of the Auditor General’s website at www.PaAuditor.gov.
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