As part of MACPAC’s ongoing work on Medicaid hospital payment policy, Chapter 2 of the June 2019 report to Congress will discuss the definition for Medicaid shortfall used for Medicaid disproportionate share hospital (DSH) payments. This presentation summarizes the chapter, which contains a recommendation approved by the Commission to change the definition of Medicaid shortfall to exclude costs and payments for all Medicaid-eligible patients for whom Medicaid is not the primary payer.