Hospital groups urge Congress to avoid DSH cuts
The groups maintained that additional cuts to Medicaid would only cause further difficulties on the heels of the COVID-19 pandemic.
Photo: John Baggaley/Getty Images
Nine hospital groups have written to Congressional leadership urging lawmakers to avoid the roughly $8 billion in cuts to Medicaid disproportionate share hospital payments, which could start as soon as October 1.
In the letter, the groups, which include the American Hospital Association, America's Essential Hospitals and the Association of American Medical Colleges, called the Medicaid DSH program "vital" in assisting hospitals that serve high numbers of Medicaid and uninsured patients.
"More than 2,500 hospitals in the U.S. receive DSH payments to address Medicaid underpayment and uncompensated care, which helps ensure patients have access to critical community services, including trauma, burn care and high-risk neonatal care, as well as be prepared for natural disasters and pandemic events," the groups wrote.
WHAT'S THE IMPACT
The Affordable Care Act reduced payments to the Medicaid DSH program under the assumption that uncompensated care costs would decrease as healthcare coverage increased. But the hospital groups said these coverage rates have not been realized, and tens of millions of Americans remain uninsured.
"This year the Medicaid program and its beneficiaries face a difficult transition, as states institute processes to determine which recipients remain eligible for the program when the maintenance of effort provisions related to the public health emergency expire," the letter read. "In addition, Medicaid underpayment continues to pose ongoing financial challenges for hospitals treating our nation's most vulnerable citizens, including millions of children."
Arguing that hospitals are facing financial hardships as the country emerges from the COVID-19 pandemic, the groups maintained that additional cuts to Medicaid would only cause further difficulties.
In a bipartisan manner, Congress has previously delayed the Medicaid DSH cuts. The hospital groups are asking lawmakers to do so once again.
Other groups signing onto the letter include Premier, Vizient, the Catholic Health Association of the United States, Children's Hospital Association, Federation of American Hospitals and National Association for Behavioral Healthcare.
THE LARGER TREND
The DSH program, run by the Centers for Medicare and Medicaid Services, is meant to subsidize care for low-income patients, but is falling short when it comes to supporting hospitals in traditionally disadvantaged Black communities, according to findings published in November in JAMA Network Open.
Medicare and Medicaid DSH payment programs allocate $24 billion to hospitals annually to subsidize care and improve outcomes for low-income patients. DSH allocations are based largely on measures of patient characteristics that reflect healthcare use for low-income patients, such as the proportion of inpatients enrolled in Medicaid.
But since racial and ethnic minority groups face sizable structural barriers to healthcare, they often have lower levels of use than non-minoritized racial and ethnic groups, conditional on having the same level of healthcare need.
Because DSH funding is partially allocated based on measures of healthcare use, the hypothesis posed by researchers was that hospitals in disproportionately Black counties received payments that failed to meet their financial needs and the needs of the populations they served.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
