UPDATE Aug. 15, 2023: The Centers for Medicare and Medicaid Services (CMS) recently unveiled its final Inpatient Prospective Payment System (IPPS) rule for FY 2024, which results in a $957 million cut to DSH hospitals. This astronomical loss threatens hospitals’ ability to continue providing essential services to underserved communities, at a time when millions are losing Medicaid coverage due to the end of the Medicaid continuous enrollment provision (enacted specifically for the COVID-19 pandemic). For more information on the rule and its consequences for our healthcare system, read here.
Payments to the Medicaid Disproportionate Share Hospitals (DSH) program are set to be reduced by $8 billion on October 1.
Why It Matters: Since its inception in the early 1908s, the Medicaid Disproportionate Share Hospitals (DSH) program has provided critical support to hospitals serving the nation’s most vulnerable patients, including children, the elderly, people with disabilities, and the impoverished.
It works by apportioning greater financial assistance to “safety net” hospitals with a high number of low-income patients, uninsured patients, and patients with healthcare coverage that is insufficient to meet their healthcare needs.
The Medicaid DSH program’s value to countless communities across the nation cannot be overstated. Without this assistance, access to quality healthcare is threatened for those who need it most.
How It Happened: With the passage of the Affordable Care Act in 2010, Congress agreed to a reduction in future Medicaid DSH payments, reasoning that hospitals would care for less uninsured Americans as health coverage expanded. Thirteen years later, coverage increases have yet to be realized — and Medicaid DSH payments are still on the chopping block.
In addition to the fact that tens of millions of Americans still do not have health insurance, hospitals are now facing profound financial challenges in the wake of the COVID-19 pandemic. Soaring inflation rates have increased labor and drug expenses, and unprecedented workforce shortages continue to weaken hospital systems.
Now is not the time to reduce Medicaid payments to the hospitals that rely on them.
A Potential Solution: A bipartisan group of representatives recently introduced the Supporting Safety Net Hospitals Act, legislation that would delay pending Medicaid DSH cuts for two years and secure access to healthcare for millions of Americans, regardless of their ability to pay.
To learn more about the Medicaid DSH program and the Supporting Safety Net Hospitals Act, see here.