The regulation has already been finalized but hospitals continue to protest Medicare’s intention to reduce their Medicare disproportionate share (Medicare DSH) uncompensated care payments.

The cut, proposed at $115 million in April, when the Centers for Medicare & Medicaid Services proposed it, ended up just shy of $1 billion in the final regulation.  The major change, according to CMS, comes because the agency’s actuaries have projected a lower uninsured rate than when CMS proposed the $115 million cut in the spring.

Medicare DSH payments are intended to help hospitals that care for especially large numbers of uninsured patients with the cost of providing such care.

Protesting hospitals point to the end of the COVID-19 pandemic’s continuous Medicaid eligibility, which has already removed four million people from the Medicaid rolls, to support their continued need for Medicare DSH uncompensated care money.  CMS counters that many of those people will find alternative health insurance.

Even though CMS has already finalized the Medicare DSH cut, opponents of the cut maintain that the agency has the authority to reverse course in time for FY 2024.

The Alliance of Safety-Net Hospitals opposed even the smaller cut CMS proposed in April, writing in a June letter to the agency that it

cannot help but be disappointed to find that at the same time the federal government has so publicly focused greater attention and energy on addressing health equity challenges – including in this proposed rule – it also has proposed a cut of approximately $160 million in the Medicare DSH uncompensated care pool.

A cut of this size can only detract from the administration’s health equity efforts because it would, without question, hit hardest the same community safety-net hospitals – including ASH hospitals – that serve the most patients who are challenged by social determinants of health and the most patients who have suffered, and who continue to suffer, from inequitable access to care. The federal government should not reach out to a specific population with one hand while taking resources away from it with the other.

In the same letter, ASH wrote that it

…opposes the proposed $160 million cut in Medicare DSH uncompensated care funds. If anything, we believe this pool should be larger, not smaller, to meet the needs of community safety-net hospitals and others that expect to continue serving large numbers of uninsured and underinsured patients. This is especially true in the coming year, with the unwinding of continuous Medicaid eligibility that characterized the recently ended public health emergency and amid the expectation that somewhere between five million and 14 million Americans will lose their eligibility for Medicaid in the coming months.

Learn more about the hospital industry’s continued fight to reverse FY 2024 Medicare DSH cuts from the Axios article “Hospitals push back on safety-net payment cuts.”