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MACPAC Releases Brief on Medicaid DSH Cuts

The Medicaid and CHIP Payment and Access Commission (MACPAC) has released an issue brief projecting planned Medicaid disproportionate share hospital (DSH) payment reductions by state for fiscal year 2018.

The brief provides projections of Medicaid DSH reductions under the Affordable Care Act (ACA), as well as under the House-passed American Health Care Act (AHCA). Cuts to states’ Medicaid DSH allotment under the ACA are scheduled to go into effect Oct. 1.

MACPAC notes that the effects of such cuts vary by state, with some allotments shrinking by more than 25 percent. Many states, regardless of expansion status, would experience DSH reductions greater than the reductions in uncompensated care costs in recent years. In addition, hospitals nationwide receiving DSH payments continue to report negative operating margins before DSH payments are taken into account.

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

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About the Author

Rachel Schwartz is a policy associate at America's Essential Hospitals.