Medicaid disproportionate share hospital (DSH) payments are statutorily required Medicaid payments to hospitals that serve high numbers of low-income patients. They supplement regular Medicaid payments for hospital services and are intended to improve the financial stability of safety net hospitals to preserve access to necessary services for low-income patients.
In anticipation of decreased uncompensated care costs from expanded coverage under the Affordable Care Act, the law established a series of Medicaid DSH allotment reductions currently scheduled to begin in FY 2018. Congress directed MACPAC to report annually on DSH allotments and their relationship to uninsured individuals, uncompensated care, and hospitals that provide essential community services.
The draft of the Commission’s first report, reviewed at the October meeting, provides the context for an ongoing analysis of Medicaid DSH policy, and the data challenges to achieving a complete understanding of how Medicaid DSH payments support care for low-income patients. The final report will contain a recommendation calling on the Secretary of the U.S. Department of Health and Human Services to collect and report hospital-specific data on all types of Medicaid payments for all hospitals that receive them. The recommendation also calls for the Secretary to collect and report data on the sources of non-federal share necessary to determine net Medicaid payment at the provider level.
