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Members of Congress Urge Delay in Medicare DSH Cuts

Fifty-eight members of the House of Representatives have written to House leadership asking them to delay the continued implementation of Affordable Care Act-mandated Medicare disproportionate share (Medicare DSH) cuts.

The letter, to House Speaker John Boehner and minority leader Nancy Pelosi, notes that

…hospitals that qualify for Medicare DSH are, by definition, the very providers caring for the greatest numbers of low-income and low-income elderly patients.  In recent years, hospitals have incurred $270 billion in Medicare cuts, including reductions in their annual cost-of-living adjustments, penalties through Medicare’s value-based purchasing and readmissions reduction programs, reduced Medicare bad debt reimbursement, and continued cuts from sequestration.  Medicare DSH cuts at this time could jeopardize the health care safety net that our constituents and yours need and deserve.

US Capitol DomeMedicare DSH payments are vital to the nation’s private  safety-net hospitals, and the National Association of Urban Hospitals had been urging Congress to delay Medicare DSH cuts for the past three years.  Most recently, NAUH asked House members to sign onto a bill delaying Medicare DSH cuts for two years.

Read the entire congressional letter here.

NAUH Calls for Delay of Medicare DSH Cuts

The National Association of Urban Hospitals (NAUH) has asked members of the House of Representatives to sign onto a bipartisan letter from Representatives Adam Schiff (D-CA) and Devin Nunes (R-CA) asking House leaders to bring to the floor legislation to delay cuts in Medicare disproportionate share hospital payments (Medicare DSH) required by the Affordable Care Act.

In the letter, NAUH notes that

Affordable Care Act-mandated cuts in Medicare disproportionate share hospital payments (Medicare DSH) are hurting private, non-profit urban safety-net hospitals and other providers like them that care for especially large numbers of low-income, low-income elderly, and uninsured patients. Many hospitals are already struggling to accommodate the $270 billion in Medicare payment cuts imposed on them in recent years, and as they work to accommodate these cuts, they need protection from additional reductions like cuts in their essential Medicare DSH payments.

See NAUH’s message to House members here.

NAUH Testifies on Medicare DSH

NAUH has asked the House Ways and Means Committee to delay cuts in Medicare disproportionate share hospital payments (Medicare DSH).

In written testimony submitted to the committee as part of a public hearing on hospital-related Medicare issues, NAUH told the committee that Affordable Care Act-mandated cuts in Medicare DSH payments should be delayed

…to ensure that Americans have appropriate access to health care if and when they need it and to ensure that the fabric of the American health care safety net does not fray beyond repair.

NAUH LogoNAUH also told the committee that

… moving forward with the proposed cuts in the Medicare DSH program could hinder access to care for those who need it most – including residents of the predominantly low-income communities served by the nation’s private, non-profit urban safety-net hospitals. In hurting the hospitals that serve these patients, moreover, Medicare DSH cuts also could hurt the other patients these same hospitals serve – those covered by private insurance and those covered by Medicare.

Read NAUH’s complete testimony here.

Study Points to Risk of DSH Cuts

A new study suggests that future cuts in Medicare disproportionate share (Medicare DSH) and Medicaid DSH payments could pose problems for hospitals that serve large numbers of uninsured patients.

According to a new report in the journal Health Affairs,

Such cuts in government funding of uncompensated care could pose challenges to some providers, particularly in states that have not adopted the Medicaid expansion or where implementation of health care reform is proceeding slowly.

Medicare DSH and Medicaid DSH payments help underwrite the uncompensated care hospitals provide to their uninsured patients.  All private safety-net hospitals receive such payments.

health affairsEven after Affordable Care Act reforms take effect, 25 to 30 million Americans are expected to remain uninsured.  Medicare DSH payments are expected to decline $22.1 billion between now and 2019 and Medicaid DSH payments, temporarily delayed by two separate actions of Congress, are expected to decline $17.1 billion through 2020.

The new study supports The National Association of Urban Hospitals’ long-time position that Medicare DSH and Medicaid DSH cuts would be harmful to private, non-profit urban safety-net hospitals and should be delayed.   NAUH also has endorsed legislation calling for such a delay.

Learn more about the Health Affairs study in this Washington Post article and find the study itself here, on the web site of Health Affairs.

Some Hospitals Stand to Lose Medicaid Expansion, DSH Money

When the Supreme Court made Medicaid expansion optional rather than mandatory for states, its decision affected the delicate balance of one aspect of the Affordable Care Act.

Hospitals that serve large numbers of low-income and uninsured patients receive special supplemental payments from Medicare and Medicaid to help subsidize the care they provide to these patients:  disproportionate share payments, or DSH payments.

And because Medicaid expansion was expected to reduce the number of uninsured patients such hospitals serve, the Affordable Care Act calls for reducing over a period of years both the Medicare DSH and Medicaid DSH payments hospitals receive.

iStock_000005787159XSmallBut in states that choose not to expand their Medicaid programs, hospitals that qualify for Medicare DSH and Medicaid DSH payments will continue to serve similar numbers of low-income and uninsured payments but now face the prospect of doing so with smaller Medicare DSH and Medicaid DSH payments as the Affordable Care Act requirement begins reducing those payments.

This could prove especially troublesome for private safety-net hospitals located in states that do not expand their Medicaid program because such hospitals serve especially large numbers of low-income and uninsured patients.

The Wall Street Journal has taken a look at how this situation will affect hospitals in just one state that is not expanding its Medicaid program.  See its story here.