Noteworthy News

Safety-Net Hospitals Await Medicaid DSH Cuts

Across the country, safety-net hospitals are bracing for major cuts in their Medicaid disproportionate share (DSH) payments starting in FY 2014, when a provision of the Affordable Care Act requiring such cuts takes effect.

Under the Affordable Care Act, the number of uninsured patients hospitals treat is expected to decline as health insurance becomes more affordable and accessible, theoretically reducing hospitals’ need for Medicaid DSH revenue.  Under the reform law, federal spending on Medicaid DSH will be slashed $18 billion over six years.

Historically, Medicaid DSH has been viewed as a program to help hospitals that treat especially large numbers of uninsured and Medicaid patients.  The cut will be implemented, however, before it is clear how many currently uninsured people will purchase health insurance – and at a time when the number of Medicaid patients safety-net hospitals serve is expected to rise significantly, not fall, when the Affordable Care Act’s new criteria for Medicaid eligibility take effect.

The scheduled cut in Medicaid DSH payments is of particular concern to private urban safety-net hospitals across the country.  The National Association of Urban Hospitals (NAUH) continues to urge members of Congress to revisit this aspect of the 2009 health care reform law.

Read more about the anticipated reduction of Medicaid DSH payments and its implications for safety-net hospitals in thisHealth Care Reform/Flag CQ report presented by the Commonwealth Fund.

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