- The American Hospital Association (AHA) is asking the CMS to delay proposed cuts to Medicaid’s Disproportionate Share Hospital (DSH) allotments.
- In a letter this week to CMS Administrator Seema Verma, AHA stated the data and methods for calculating how much individual hospitals receive in DSH payments are flawed and should be reworked.
- The association said it does support the CMS proposal to cap DSH payment reductions at 90% of a state’s allotment.
The reduction in DSH payments is mandated by the Affordable Care Act (ACA), and has already been delayed once (from 2014 to 2018). The idea was, as the ACA progresses, hospitals would see higher patient volume as the rate of people with insurance climbed. But AHA says that provision in the ACA didn't anticipate some states would not expand Medicaid, or that complications would result in less participation in ACA marketplace plans.
More specifically, AHA says the data CMS proposes to use to determine a hospital’s DSH payment aren't transparent and are not accurate enough.
AHA has consistently decried the cut, noting the DSH payments go to hospitals that treat the most vulnerable populations and provide important services for their communities. These hospitals are less likely to survive a funding cut. The proposed rule would decrease payments by $43 billion from 2018 to 2025.
The CMS plans to implement the payment reduction next year, but the current trend of decreasing patient volume isn’t expected to abate. Hospitals are bracing for more uncompensated care funding cuts and changes, some of which they are still fighting.
Another concern is Republicans' fixation on cutting Medicaid funds. The GOP has recently proposed a cut of $800 billion, and President Donald Trump’s budget cuts $600 billion. Health policy experts say funding decreases of those magnitudes would devastate the Medicaid program, and providers would feel the pain.
A recent Urban Institute report found hospitals in states that expanded Medicaid saw increased revenue and $3.2 million less in uncompensated care costs. Conversely, shrinking the Medicaid rolls would have negative financial impacts for providers.
Small and rural hospitals would be hit the hardest, Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities recently told Healthcare Dive. “There are questions about whether those hospitals will be viable,” he said. “That could be the death knell for those hospitals over the long run as a result.”