CMS finalizes rule detailing Oct. 1 cuts to Medicaid DSH payments

CMS has issued a final rule detailing how $4 billion in cuts to Medicaid Disproportionate Share Hospital payments will be implemented beginning Oct. 1.

Under the Medicaid DSH program, hospitals that serve a large number of Medicaid and uninsured patients receive payments to help cover the costs of caring for them. Assuming that uncompensated care costs would decline as the number of insured people increased under the health law, the ACA lowered Medicaid payments to hospitals that serve a disproportionate share of low-income patients.

CMS issued a final rule in 2013 to implement cuts to DSH funding, but subsequent legislative efforts have delayed the federally required cuts.

A $4 billion reduction in DSH payments is scheduled for the start of fiscal year 2020.

Now, Congress again is considering a delay of the cuts. According to the American Hospital Association, the U.S. House has approved a resolution that would delay the cuts through Nov. 21, and the U.S. Senate is expected to take up the issue this month.

CMS said its final rule "delineates the methodology to implement" the cuts. 


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