Medicaid DSH cuts nixed from Build Back Better Act

After receiving pushback from hospitals, the Senate scrapped plans to cut Medicaid disproportionate share hospital payments in 12 states from its version of President Joe Biden's $1.7 trillion social spending package.

Under the House-passed Build Back Better Act, the 12 states that haven't expanded their Medicaid programs faced a 12.5 percent reduction in Medicaid DSH allotments. The AHA said the cuts could be as much as $4.7 billion over 10 years. Under the House version, if a state chooses to discontinue its Medicaid expansion, its DSH allotments would be reduced as well.  

In early November, eight healthcare organizations argued that reductions in DSH allotments would be an "additional hardship for hospitals" in states that didn't expand Medicaid and would "make it difficult for hospitals in those states to continue to serve their patients and their communities."

Although the DSH cuts were scrapped, the Senate version keeps a provision to limit federal payments in states that didn't expand Medicaid for a separate uncompensated care pool.

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