Chapter 3 of the March 2022 report fulfills MACPAC’s annual, statutorily mandated obligation to report on Medicaid disproportionate share hospital (DSH) allotments to states for payments to hospitals that serve a high proportion of Medicaid beneficiaries and other low-income patients.
As in prior years, the Commission continues to find little meaningful relationship between state DSH allotments and the number of uninsured individuals; the amounts and sources of hospitals’ uncompensated care costs; and the number of hospitals with high levels of uncompensated care that also provide essential community services for low-income, uninsured, and vulnerable populations.
The COVID-19 pandemic has had substantial effects on hospital finances, but the full effects on safety-net and DSH hospitals may not be clear until after the public health emergency has ended. To help address financial challenges related to the pandemic, Congress authorized relief funding to support providers. But provider relief funds mostly targeted hospitals with high patient revenue, and there was no relationship between total hospital relief funding and the number of uninsured in the area. The American Rescue Plan Act of 2021 (ARPA, P.L. 117-2) increased DSH allotments for the remainder of the public health emergency by applying an enhanced federal medical assistance percentage to the total DSH funds available to states. We estimate that ARPA increased federal allotments by $1.5 billion for FY 2022. The Commission will continue to monitor the effects of the pandemic on safety-net providers as more data becomes available.
From: March 2022 Report to Congress on Medicaid and CHIP