More than 100 hospitals have sued the Department of Health and Human Services, arguing that the manner in which the Centers for Medicare & Medicaid Services calculates their Medicare disproportionate share payments shortchanges hospitals that care for especially large numbers of low-income patients – the very hospitals Medicare DSH payments were created to help.

According to the hospitals, CMS’s Medicare DSH payment methodology undercounts the number of low-income patients hospitals serve, thereby reducing the Medicare DSH payments yielded under the Medicare DSH payment calculation formula adopted in 2023.

Medicare DSH payments are a vital tool for helping community safety-net hospitals like those that are part of the Alliance of Safety-Net Hospitals and others like them that care for the residents of communities with large numbers of low-income patients.  These community safety-net hospitals are the primary providers of care for many Americans in such communities and they rely heavily on Medicare DSH for support in providing that care.

Learn more about how the suing hospitals believe CMS is undercounting their low-income patients and shortchanging their Medicare DSH payments from the Becker’s Hospital Review article “131 hospitals sue HHS over DSH cuts:  5 notes.”