Noteworthy News

Some Hospitals Stand to Lose Medicaid Expansion, DSH Money

When the Supreme Court made Medicaid expansion optional rather than mandatory for states, its decision affected the delicate balance of one aspect of the Affordable Care Act.

Hospitals that serve large numbers of low-income and uninsured patients receive special supplemental payments from Medicare and Medicaid to help subsidize the care they provide to these patients:  disproportionate share payments, or DSH payments.

And because Medicaid expansion was expected to reduce the number of uninsured patients such hospitals serve, the Affordable Care Act calls for reducing over a period of years both the Medicare DSH and Medicaid DSH payments hospitals receive.

iStock_000005787159XSmallBut in states that choose not to expand their Medicaid programs, hospitals that qualify for Medicare DSH and Medicaid DSH payments will continue to serve similar numbers of low-income and uninsured payments but now face the prospect of doing so with smaller Medicare DSH and Medicaid DSH payments as the Affordable Care Act requirement begins reducing those payments.

This could prove especially troublesome for urban safety-net hospitals located in states that do not expand their Medicaid program because such hospitals serve especially large numbers of low-income and uninsured patients.

The Wall Street Journal has taken a look at how this situation will affect hospitals in just one state that is not expanding its Medicaid program.  See its story here.

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