CMS finalizes $4B in cuts to DSH program

CMS has finalized a proposed rule to the Medicaid Disproportionate Share Hospital (DSH) program that will result in $4 billion in payment cuts in 2020.

Medicaid programs are required to make DSH payments to qualified hospitals that serve a high number of patients on Medicaid or who are uninsured. The amount of funding for DSH hospitals was increased under the Affordable Care Act.

In 2020, payments will be cut by $4 billion, followed by $8 billion in cuts for the next five years. The new rule will take effect November 22.

The cuts, which were first introduced in 2017, have been delayed over the past few years after the American Hospital Association along with other doctor and hospital groups criticized payment calculations. The payment cuts would be based on new data calculations called the DSH Health Reform Methodology, according to CMS.

See the finalized rule here.