Medicaid disproportionate share hospital (DSH) payments offset hospital uncompensated care costs for Medicaid-enrolled and uninsured patients. During economic recessions, Medicaid enrollment and the number of people who are uninsured increases. During the 2020 economic recession, Congress implemented countercyclical Medicaid policy by temporarily increasing the federal medical assistance percentage (FMAP) for Medicaid spending. However, doing so had the effect of lowering total DSH funds available to states to pay for uncompensated care.
This presentation provided background information on previous congressional efforts to increase federal DSH allotments during economic recessions. It also summarized countercyclical DSH policy issues gathered from interviews with states and hospitals during the COVID-19 pandemic.