Which hospitals will be most affected by cuts in Medicaid DSH payments?

Disproportionate-share hospital (DSH) payments, a long-standing feature of the Medicaid program, are intended to partially offset the cost of providing uncompensated care to the uninsured. Between 2017 and 2024, federal DSH payments will decline by more than $35 billion under the Affordable Care Act. These reductions are in tandem with the expansion of insurance coverage through the Marketplaces, including for those newly eligible for Medicaid, which is expected to reduce hospital uncompensated care costs.

Evan S. Cole of Georgia State University and coauthors from Tulane University sought to identify the hospitals most likely to be affected. They found that 529 acute care hospitals may be significantly impacted by the Medicaid DSH cuts. Financial data showed that 225 of these hospitals are in a weak financial condition, which may affect their ability to provide vulnerable populations with access to care.

Research: Identifying Hospitals That May Be At Most Financial Risk From Medicaid Disproportionate-Share Hospital Payment Cuts, Evan S. Cole, Daniel Walker, Arthur Mora and Mark L. Diana, Health Affairs, doi: 10.1377/hlthaff.2014.0109, published November 2014.