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MACPAC Issues Annual DSH Analysis

In its March report to Congress, the Medicaid and CHIP Payment and Access Commission (MACPAC) examines the relationship between Medicaid disproportionate share hospital (DSH) allotments, uncompensated care costs, and services for low-income, uninsured populations.

MACPAC found the number of uninsured increased by 1.1 million from 2018 to 2019, the second annual increase since the Affordable Care Act (ACA) was enacted. The commission also found hospitals had $40.7 billion in charity care and bad debt as reported on the fiscal year 2018 Medicare cost report — a 7 percent increase from the previous year.

The report outlines early effects of the COVID-19 pandemic on hospital finances and chronicles provider relief funding in 2020. The commission also includes state-specific projections of the ACA-mandated Medicaid DSH allotment, which were delayed until fiscal year (FY) 2024 and extended through FY 2027 by the Consolidated Appropriations Act of 2021. MACPAC found state impact will vary, with estimated reductions ranging from 5.5 to 90 percent of unreduced allotments.

The report also includes chapters on countercyclical Medicaid financing, postpartum coverage expansion, the burden of Medicaid estate recovery, and coordinated care for individuals dually eligible for Medicare and Medicaid.

Contact Senior Director of Policy Erin O’Malley at  eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Julie Kozminski is a senior policy analyst at America's Essential Hospitals.

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