Safety Net Hospitals -Left in the Lurch

A recent perspective piece highlights a new threat to safety-net hospitals (NEJM 2013; 369: 1675-77).

Safety-net hospitals are often referred to as Medicaid Disproportionate Share Hospitals (DSHs).  “Only 2% of acute care hospitals nationwide are safety-net facilities, but they provide 20% of uncompensated care to the uninsured.”  Currently, Medicaid allocates $11.5 billion to support these hospitals.  However, this money is provided to the states and many states including Georgia and Ohio spread these payments broadly rather than targeting these DSHs.

The newest threat:  “Because the Affordable Care Act (ACA) was expected to dramatically expand insurance coverage, safety-net hospitals were expected to need less DSH money…the ACA reduced Medicaid DSH funding by $1.8 billion between fiscal years 2014 and 2020.”  And, “because many states that won’t expand Medicaid currently receive large DSH payments, their safety hospitals will be hit hard when the DSH cuts kick in.”

There are several proposals that the Centers for Medicare and Medicaid Services (CMS) are reviewing to try to address this problem.  However, the authors note that it is unlikely that Congress will restore DSH funding to previous levels.

Bottomline: “If the state governments that refused to expand Medicaid also refuse to rethink their approach to allocating DSH funds, there will be little money left to sustain their safety-net hospitals.”

Related blog post:

Life in the balance (book) | gutsandgrowth

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