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On the Hill: Association Seeks Fix for Unintended DSH Cuts

The association is encouraging lawmakers to mitigate unintended cuts to disproportionate share hospital (DSH) payments that resulted from Section 203 of the Consolidated Appropriations Act of 2021.

Section 203 altered the definition of Medicaid shortfall for purposes of calculating the limit on Medicaid DSH payments. The new limit excludes costs and payments for Medicaid patients who are dually eligible for commercial or Medicare coverage, counting only the costs and payments for patients for whom Medicaid is the primary payer or who are uninsured. An exception to this policy was provided to hospitals that, based on their most recent cost report, fall in the 97th percentile of hospitals in either the number or percentage of inpatient days of Medicare patients eligible for supplemental security income. For these hospitals, their DSH cap would be the higher of the new policy provided in Section 203 or the policy in place as of Jan. 1, 2020 (when costs and payments for dual-eligible beneficiaries were included).

This policy change took effect Oct. 1, 2021. The Centers for Medicare & Medicaid Services (CMS) subsequently issued guidance indicating it would have to develop a new data set to identify hospitals eligible for the exception provided in Section 203.

Section 203, as enacted, might result in unintentional cuts to DSH payments for hospitals that incur significant uncompensated costs for low-income dually eligible Medicare patients and, in some unique circumstances, other third-party patients. Associations members tracking this issue should contact Jason Pray, vice president of legislative affairs, at

Biden Names Supreme Court Nominee

President Joe Biden nominated Judge Ketanji Brown Jackson as the 116th associate justice of the U.S. Supreme Court. This nomination is to fill the spot of Justice Stephen Breyer, who announced his retirement this year.

Jackson this week will begin meeting with senators, initiating the Senate confirmation process.

Congressional Schedule

The House Committee on Ways and Means will hold a March 2 hearing on substance use, suicide risk, and the U.S. health system.

The same day, the House Committee on Energy and Commerce Oversight and Investigations Subcommittee will hold a hearing on lessons learned on the front lines of COVID-19.

Register Now: Spring Policy Assembly

America’s Essential Hospitals invites you to join us online for our spring Policy Assembly, March 15–16. Attendees will learn about current legislation, hear a 2022 midterm election preview, and review the outlook for essential hospital advocacy priorities. Register today!


About the Author

Christina Fagnano is the legislative affairs associate at America's Essential Hospitals.

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