On Thursday, CMS resurrected the ACA mandated cuts, which were delayed by Congress last summer; federal agency now proposes $2 billion in cuts in FY 2018 increasing to $8 billion by FY 2025.
Hospitals throughout the country, especially those serving rural populations, rely on the DSH program for essential financial assistance.
The cuts, mandated by the Affordable Care Act, were included in the legislation under the assumption that as uninsured rates fell due to increased access, the costs of uncompensated care would fall.
According to the Medicaid and CHIP Payment and Access Commission (MACPAC), a non-partisan legislative branch agency that provides recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services Tom Price and state agencies, Arizona’s DSH spending was 1.6 percent of the state’s total Medicaid benefit spending in 2015. State Medicaid programs are required to make DSH payments to hospitals that serve a high proportion of Medicaid beneficiaries and other Americans with low income.
Read the brief from Healthcare Dive
Read the proposed rule from CMS
Health Leaders offers its own reporting
Read full coverage from Modern Healthcare
Here’s the annual breakdown of the reductions in DSH allotments from 2018 to 2025, from MACPAC
FY $ Reduction
2018: $2 B
2019: $3 B
2020: $4 B
2021: $5 B
2022: $6 B
2023: $7 B
2024: $8 B
2025: $8 B
In MACPAC’s March 2017 report to Congress on Medicaid and CHIP it concluded that while America’s debate on the Affordable Care Act made it unable to evaluate the merits of pending DSH cuts, the commission was concerned about way DSH funds are distributed among the states.
In the Commission’s view, Medicaid DSH payments should be better targeted to the states and hospitals that serve a disproportionate share of Medicaid beneficiaries and low income patients that have higher levels of uncompensated care, consistent with the original statutory intent.