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Essential Hospitals Rely on Medicaid DSH

Essential hospitals’ mission means they shoulder a disproportionate share of unreimbursed care. They constitute about 5 percent of all U.S. hospitals but provide more than a quarter of charity care nationally.1 This leaves them with an average operating margin of −8.6 percent compared with −1.4 for other U.S. hospitals. Due to this mission, essential hospitals rely on patchwork public support, including Medicaid disproportionate share hospital (DSH) payments, which Congress created to stabilize these financially fragile hospitals.

Now, unless Congress acts, $32 billion in DSH cuts over the next four years will undermine these hospitals and could push some to the brink. The scheduled DSH cuts include an $8 billion reduction on November 18, 2023 — more than two-thirds of all federal DSH spending annually.

America’s Essential Hospitals appreciates the strong precedent of bipartisan support for stopping the Medicaid DSH cuts. We urge Congress to act swiftly, before the November 18 deadline, to preserve this vital safety net support and eliminate the DSH reductions for fiscal years 2024 and 2025.

Read Our View: Essential Hospitals Rely on Medicaid DSH

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