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MACPAC Issues Annual DSH Analysis

The Medicaid and CHIP Payment and Access Commission (MACPAC) released its March 2020 Report to Congress, which includes the commission’s statutorily required annual analysis of Medicaid disproportionate share hospital (DSH) payments.

MACPAC’s analysis examines the relationship between DSH allotments and hospital uncompensated care costs and services for low-income, uninsured, and vulnerable populations. MACPAC found that the number of uninsured increased by 1.9 million from 2018 to 2017, the first statistically significant increase since the Affordable Care Act (ACA) was enacted. The commission also found that total hospital charity care and bad debt continued to increase from the previous year, as reported on the fiscal year 2017 Medicare cost report. A comparison of uncompensated care costs to previous years is not available due to changes in Medicare cost report definitions.

The DSH chapter includes state-specific projections of the ACA-mandated Medicaid DSH allotment reductions using the September 2019 allotment reduction methodology. MACPAC found that state impact will vary, with estimated reductions ranging from 3.5 to 56.9 percent of unreduced allotments.

Rounding out the DSH chapter, MACPAC explored obstetric services provided in DSH hospitals, highlighting disparities between urban and rural hospitals, and provided an update on California’s Global Payment Program, which allows the state to distribute DSH dollars as a global payment aimed at encouraging delivery system reforms.

The report also includes a chapter examining states’ readiness to report on mandatory Medicaid and CHIP core set quality measures and a chapter on improving Section 1115 demonstration waiver evaluations.

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

Gontscharow is a senior policy analyst for America's Essential Hospitals.

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