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Modernizing Medicaid DSH: Ensuring Vital Support for Essential Hospitals

In a new white paper, America’s Essential Hospitals highlights the need to eliminate impending reductions to Medicaid disproportionate share hospital (DSH) state allotments and provides recommendations to modernize existing DSH policy.

Since 1981, hospitals have relied on Medicaid DSH funding to help cover the costs of providing care to Medicaid and low-income patients. The state of the health care delivery system, implications of the Affordable Care Act’s (ACA’s) DSH reductions, and current legislative activity related to health care reform have highlighted an opportunity to modernize Medicaid DSH policy.

In the white paper, the association recommends removing unnecessary regulatory barriers that prevent states from using DSH payments to support timely, state-based initiatives — such as promoting integrated, coordinated care. The paper also offers policy proposals to modernize the Medicaid DSH program to reflect the current state of the health care delivery system and the challenges faced by hospitals that care for the nation’s vulnerable populations.

Most importantly, the association notes that Congress must act now to prevent the Medicaid DSH allotment reductions from going into effect on Oct. 1.

Modernizing Medicaid DSH: Policy Options To Ensure Vital Support for Essential Hospitals


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