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Association Comments on Proposed DSH Allotment Reductions

In an Aug. 28 letter, America’s Essential Hospitals responded to the Centers for Medicare & Medicaid Services’ (CMS’) proposed methodology for disproportionate share hospital (DSH) reductions set to go into effect on Oct. 1.

The DSH health reform methodology outlines how CMS will calculate states’ reductions, with an emphasis on encouraging states to provide a disproportionate share of remaining DSH payments to hospitals caring for the most low-income patients.

In its comments, America’s Essential Hospitals recommended that CMS:

  • finalize its proposal to use total hospital costs to determine the High Level of Uncompensated Care Factor;
  • implement a reduction cap methodology to protect state DSH allotments from total elimination;
  • monitor the effects of DSH audit data limitations;
  • ensure that DSH allotment reductions be allocated equitably to institutions for mental disease;
  • identify the states to which the budget neutrality factor (BNF) will be applied in the allotment reduction calculation; and
  • clarify the amount excluded under the BNF calculation.

Contact Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Rachel Schwartz is a former policy associate at America's Essential Hospitals.

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