Senate votes to push back Medicaid DSH cuts

The U.S. Senate has approved a measure to delay $4 billion in cuts to Medicaid Disproportionate Share Hospital payments that would have begun Oct. 1, according to America's Essential Hospitals, an association representing U.S. safety-net hospitals.

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 uncompensated care costs would decline as the number of insured people increased when the ACA became law, the law 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 lawmakers have repeatedly delayed the federally required cuts.

Most recently, the Senate approved delaying the beginning of $4 billion in planned fiscal year 2020 cuts to Medicaid DSH payments through Nov. 21, from Oct. 1. The U.S. House also has approved  a measure to delay the fiscal year 2020 cuts.

The Senate's approval came after CMS issued a final rule Sept. 23 detailing how the $4 billion in cuts would be implemented. The final rule also details how $8 billion in cuts to Medicaid DSH payments each fiscal year from 2021 to 2025 would be implemented.

This summer, the House Energy and Commerce Committee approved a plan to repeal the $4 billion in cuts in fiscal year 2020 and $8 billion in cuts in fiscal year 2021 as well as reduce the cut in fiscal year 2022 from $8 billion to $4 billion. This means a total of $16 billion in cuts would be eliminated over the three fiscal years. However, a repeal of the cuts would still require full House and Senate approval.   


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