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Essential Hospitals Rely on Medicaid DSH

Essential hospitals are at the heart of our health care safety net. They share a mission to ensure all people, especially the vulnerable, can access high-quality health care. They also ensure their communities have access to trauma care and other complex, lifesaving services, and they work outside their walls to influence social determinants of health and keep people well.

But that mission means high uncompensated and unreimbursed care and a critical need for federal support. So, to meet their mission, essential hospitals rely on a patchwork of supplemental funding, including Medicaid disproportionate share hospital (DSH) payments, which Congress created to keep these hospitals stable. Now, that stability is threatened. Medicaid DSH funding faces a $4 billion cut in fiscal year (FY) 2020 and $8 billion in FY 2021.

These crippling reductions would come on top of recent deep cuts to Medicare outpatient payments to essential hospitals and changes to immigration and other domestic policies certain to fuel a spike in uninsured patients.

Congress has shown strong bipartisan agreement to stop the DSH cuts:

  • In May, more than 300 bipartisan House members, led by Reps. Eliot Engel (D-NY) and Pete Olson (R-TX), sent House leaders a letter urging them to delay the cuts by at least two years.
  • In July, the House Committee on Energy and Commerce unanimously approved the Reauthorizing and Extending Community Health (REACH) Act (H.R. 2328), which would repeal $16 billion of DSH cuts: $4 billion in FY 2020, $8 billion in FY 2021, and $4 billion in FY 2022.
  • In September, President Trump signed a bipartisan continuing resolution that delayed the October 1 $4 billion cut until November 22.

America’s Essential Hospitals thanks the bipartisan supporters of action to stop the Medicaid DSH cuts. We strongly support H.R. 2328 and urge the full House and Senate to pass it before Nov. 22.

Read Our View – Essential Hospitals Rely on Medicaid DSH

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