Safety-net hospitals push for 2-year delay in DSH cuts

America’s Essential Hospitals has announced a new advocacy and advertising campaign seeking a delay in cuts to Medicaid Disproportionate Share Hospital (DSH) payments, which are set to be reduced by $2 billion in the current fiscal year.

The payments had been set to be reduced as part of the Affordable Care Act (ACA), with policy makers reasoning at the time that increased insurance coverage meant uncompensated care would decrease. The cuts were then delayed several times, but finally went into effect for fiscal year 2018. The $2 billion cut would increase by $1 billion each year through 2023, maxing out at $8 billion each in 2024 and 2025.

“The $2 billion cut in the current fiscal year undermines vital support for hospitals that care for many uninsured and underinsured patients,” America’s Essential Hospitals said in a press release.

Hospital groups have advocated for another delay to the cuts, to no avail. The America’s Essential Hospitals’ push hopes to insert such a provision in the government funding legislation which will need to be passed later this month to avert a shutdown.

The group’s president and CEO Bruce Seigel, MD, MPH, has previously said the repeal of the ACA’s individual mandate will only exacerbate the problems for their member facilities, potentially leading to services being scaled back or hospitals being closed altogether.

Similar warnings have come from financial analysts predicting a “wave” of bankruptcies among hospitals. The long-delayed DSH cuts would be a major factor, with Winston & Strawn partner David Neier telling Bloomberg it would “single-handedly throw hospitals into immediate financial distress.”