Congress created disproportionate share hospital (DSH) payments to sustain hospitals that care for large numbers of uninsured and underinsured patients and, as a result, incur high uncompensated care costs. Those hospitals include the more than 300 members of America’s Essential Hospitals, which provide nearly 17 percent of all uncompensated care nationally despite representing only about 5 percent of all U.S. hospitals.
On average, essential hospitals operate with a 3.2 percent margin compared with an average 7.4 percent operating margin for hospitals nationwide. Without DSH payments, our members would have suffered an unsustainable 3.6 percent loss in 2015.
Congress remains at odds over the future of health care in America, creating uncertainty for hospitals that depend on federal support to meet their mission of caring for the vulnerable. Medicaid DSH is a lifeline for these hospitals and cuts are now are scheduled to begin in FY 2018, with a $2 billion cut in the first year.
We ask Congress to postpone Medicaid DSH cuts until at least FY 2020, or until policymakers can reach a sustainable, permanent solution.