Supplemental Hospital Offset Payment Program (SHOPP)

The Supplemental Hospital Offset Payment Program (SHOPP) is a fee paid by certain hospitals in Oklahoma. The funds are then pooled, matched with federal dollars, and redistributed first to critical access hospitals and then to other hospitals in the state to support their operations. 

Some hospitals are exempt from paying the fee, including hospitals operated by state, Tribal, or federal governments, hospitals that mainly provide certain services like obstetric care or cancer treatment, and long term acute care, children’s, and critical access hospitals. For hospitals that are subject to the fee, it is calculated as a percentage of the hospital’s net patient revenue. Notably, hospitals are prohibited from charging patients any part of the fee.  

The fee was initially set at 2.5 percent of each hospital’s revenue when SHOPP was first enacted in 2011. In 2021, lawmakers passed Senate Bill 1045 that mandated a phased increase in the SHOPP fee. The fee will gradually increase to four percent in calendar year 2024, and will remain at that level in subsequent years. Though not expressly outlined in the bill, it is understood that increased SHOPP revenues will be used to cover the state’s share of Medicaid expansion costs in future years.