The Alliance of Safety-Net Hospitals has developed a dynamic proposal for fostering greater equity in health care through the introduction of new Medicare and Medicaid health equity payments for community safety-net hospitals that play the greatest role in caring for communities across the country with the greatest needs.

A growing consensus has emerged that Americans today do not enjoy equitable access to quality health care.  One of the major factors driving this inequity is who pays for care.  When Medicare and Medicaid pay they generally do so poorly, driving some providers out of medically vulnerable communities and leaving those who remain with inadequate resources, consigning them to struggle unendingly with older and often outdated infrastructure, limited access to modern medical technologies and treatments, and patients who also need non-medical community and social supports and services for which no payment system, public or private, will ever reimburse them.

The cumulative impact of these and other factors on low-income communities can be seen in the poor health status of their residents:  people who are more likely to suffer from heart problems, hypertension, diabetes, asthma, and other medical problems – problems heavily influenced by social determinants of health.  Over the years, state and federal governments have attempted to respond to this problem by supplementing their inadequate Medicare and Medicaid payments.  These supplemental payments, such as Medicare disproportionate share payments (Medicare DSH), Medicaid disproportionate share payments (Medicaid DSH), and others, have helped – but not enough. The problem remains.

Now, ASH has developed its own proposal for addressing this problem:  new, supplemental Medicare and Medicaid payments targeted to communities with the greatest needs.  This new approach introduces new, data-based concepts, too, such as “Health Opportunity Zones,” “Composite Health Disparity Scores,” and “Critical Community Partner Hospitals.”

ASH’s proposed supplemental Medicare payments – one inpatient and one outpatient payment – are based first on identifying the specific communities where the needs are greatest; then, identifying the individual hospital or hospitals that play outsized roles in serving the disadvantaged residents of those communities; and finally, directing supplemental payments to those community safety-net hospitals based on their service to those individuals.  Such communities would be identified based not on county or city or hospital market area but on individual zip codes and the health care utilization and health status of their residents based on data that in the past was not available on such a granular level.

In addition, ASH proposes a new supplemental Medicaid payment to be made only to community safety-net hospitals that meet federal standards for being “deemed” a Medicaid disproportionate share hospital or that provide more than 35,000 days of care to Medicaid-eligible individuals annually.  In this manner, these federal resources would be much more finely targeted to the communities facing the greatest challenges and with the greatest needs rather than being administered so broadly to so many recipients that they fail to achieve their policy objectives.

In 2023 ASH will vigorously advocate its new health equity payments for community safety-net hospitals among leaders in the administration and Congress and other advocacy groups.  Read ASH’s “Proposal to Advance Health Equity.”