The healthcare industry is bracing itself for potential cuts to Medicaid disproportionate share hospital (DSH) payments, with nine hospital groups sending a letter to Congress urging them to prevent $8 billion in cuts that could begin as early as October 1. The groups, including the Association of American Medical Colleges and America’s Essential Hospitals, argue that the Medicaid DSH program is "vital" in assisting hospitals that serve high numbers of Medicaid and uninsured patients.
The Affordable Care Act had previously reduced payments to the Medicaid DSH program, but according to the hospital groups, uncompensated care costs have not decreased as healthcare coverage increased. Tens of millions of Americans remain uninsured, and safety-net hospitals that serve low-income populations could suffer from the cuts.
The Medicaid DSH program provides funding to hospitals that serve high numbers of Medicaid and uninsured patients. The program helps these hospitals cover the costs of uncompensated care, such as emergency room visits, surgeries, and other medical treatments that are provided to patients who cannot afford to pay for them.
The American Hospital Association (AHA), which was one of the nine groups that signed on to the letter, has also called on Congress to reject any payment cuts that "do not recognize legitimate differences among provider settings … as well as policies that restrict patient access to certain sites of care." The AHA has previously pressed Congress for additional relief for facilities still facing revenue shortfalls due to the COVID-19 pandemic.
The COVID-19 pandemic has put a spotlight on the importance of safety-net hospitals in providing care for vulnerable populations. The pandemic has disproportionately affected low-income and uninsured individuals, and safety-net hospitals have played a critical role in treating these patients. However, safety-net hospitals have also faced financial challenges during the pandemic, as many elective procedures were delayed or canceled, leading to revenue shortfalls.
The potential cuts to the Medicaid DSH program would compound these financial challenges, putting safety-net hospitals at risk of closure. This would be a devastating blow to the communities they serve, reducing access to care for vulnerable populations.
Congress has previously delayed the cuts in a bipartisan manner, and the hospital groups are urging lawmakers to do so once again.
If you have any questions or concerns about the potential impact of cuts to DSH spending on your organization, don't hesitate to reach out.