The Pennsylvania Department of Public Welfare has published a notice in the Pennsylvania Bulletin listing all hospitals eligible for Medicaid disproportionate share adjustments (Medicaid DSH) during the state’s 2013 fiscal year. See the Pennsylvania Bulletin notice here
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A bill that would delay implementation of Medicaid disproportionate share (Medicaid DSH) and Medicare DSH payment cuts for two years now has 46 co-sponsors in the U.S. House of Representatives.
H.R. 1920, the DSH Reduction Relief Act of 2103, would delay for two years the DSH cuts mandated by the Affordable Care Act.
The rationale underlying the proposal is that between some states choosing not to expand their Medicaid programs as the reform law envisioned and the delay in imposing the mandate for businesses to help their employees with health insurance, the expected rise in the rate of insurance will be slower than expected and hospitals that care for especially large numbers of low-income patients will have a greater need for DSH revenue than originally anticipated.
Because they serve so many more low-income patients than the typical acute-care hospital and Pennsylvania is not among the states planning to expand eligibility for Medicaid, the state’s safety-net hospitals are especially interested in this issue and have conveyed their support for the bill both to Congress and to the administration.
Read more about the proposed DSH delay bill and its prospects for passage in this CQ HealthBeat article presented by the Commonwealth Fund.
SNAP has asked Pennsylvania’s congressional delegation in Washington to support a bill before the House that would delay planned cuts in Medicare disproportionate share hospital payments (Medicare DSH) and Medicaid DSH for two years.
H.R. 1920, the DSH Reduction Relief Act of 2013, would delay cuts mandated by the Affordable Care Act.
SNAP’s letter to the delegation notes that
These DSH cuts are scheduled to begin…before the Affordable Care Act’s Medicaid and insurance expansion provisions can even begin to have an effect; as you know, moreover, there currently is no plan to expand Medicaid eligibility in Pennsylvania. In addition, the administration recently announced a one-year delay in the reform law’s employer health insurance mandate. Together, Medicare DSH and Medicaid DSH cuts will amount to millions of dollars worth of reductions in payments that safety-net hospitals like ours need to serve their communities, and they would be coming at a time of great ambiguity as implementation of this aspect of the Affordable Care Act gets under way.
Read SNAP’s letter to the PA congressional delegation here
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In response to a requirement in the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) has published a proposed regulation describing how it envisions reducing future Medicaid disproportionate share (Medicaid DSH) spending.
In response to that proposed regulation, SNAP has submitted a formal comment letter to CMS expressing support for some aspects of the proposal, offering recommendations for improving CMS’s proposed methodology, and conveying support for the administration’s budget proposal to delay all Medicaid DSH cuts for one year.
Read SNAP’s Medicaid DSH comment letter here.
Cuts in Medicare DSH and Medicaid DSH payments, scheduled to be take effect beginning in FY 2014, would be delayed for two years under a new bill proposed in Congress.
Under the DSH Reduction Relief Act of 2013, Affordable Care Act-mandated cuts in Medicare disproportionate share payments (Medicare DSH) and Medicaid disproportionate share payments (Medicaid DSH) would not begin until FY 2016, instead of in FY 2014, as the reform law requires.
The bill was proposed by Representative John Lewis (D-GA).
Read more about The DSH Reduction Relief Act in this article
from Becker’s Hospital Review.
The Pennsylvania Department of Public Welfare has published a notice detailing its final allocations for FY 2013 for Medicaid disproportionate share hospital payments (Medicaid DSH) for OB/neonatal intensive care services, trauma services, burn centers, academic medical centers, critical access hospitals, and selected other limited groups of providers.
Read the Pennsylvania Bulletin notice here.
The U.S. Government Accountability Office (GAO) is now reviewing audits of states’ Medicaid disproportionate share payments (Medicaid DSH) to hospitals and is raising questions about states’ compliance with federal requirements for those payments.
Based on its analysis of state Medicaid DSH audits, GAO found that states are making Medicaid DSH payments to hospitals that exceed those hospitals’ uncompensated care costs and are inaccurately calculating those hospital uncompensated care costs. The GAO also found that states are not always targeting their Medicaid DSH payments to the hospitals that provide the most uncompensated care.
States are required to submit audits and data as a condition of receiving Medicaid DSH funds from the federal government. Currently, the Centers for Medicare & Medicaid Services (CMS) is not acting on the information it receives but will begin doing so after a transition period that ends when 2014 audits are completed. In anticipation of that time, GAO is reviewing the information CMS receives for state compliance with six federal standards for Medicaid DSH payments.
This data also may eventually be used to help implement the Medicaid DSH payment reduction mandated under the Affordable Care Act.
According to the report, Pennsylvania did not provide some of the required data, so in several instances in which the document provides specific information about individual state performance, it has nothing about Pennsylvania. It does note, however, that in FY 2007, six hospitals in the state received Medicaid payments greater than their Medicaid costs.
Because Pennsylvania’s safety-net hospitals care for so many uninsured and low-income patients and receive higher Medicaid DSH payments than other hospitals, they are far more dependent on these payments than other hospitals and will need to watch this situation closely in the future.
Learn more about GAO’s examination of Medicaid DSH payments – why it is undertaking this review, what it found, and how its findings may be used in the future – in the report More Transparency of and Accountability for Supplemental Payments are Needed, which can be found here
, on GAO’s web site.
Hospitals across the country are worried about what will happen come 2014, when the Affordable Care Act’s individual insurance mandate and Medicaid expansion take effect and they lose funds they currently receive from the federal government to help with the cost of caring for their low-income and uninsured patients.
Hospitals that care for large numbers of such patients receive what are known as disproportionate share hospital payments, commonly referred to as “DSH,” from both Medicare and Medicaid. Under the 2009 health care reform law, however, those payments will be reduced drastically in anticipation of a significant decline in the number of uninsured Americans.
The leaders of these hospitals, however, believe that even the individual insurance mandate and Medicaid expansion will still leave them with many uninsured patients to treat, including illegal residents and those who decline to buy insurance despite the insurance mandate.
Historically, DSH funds have been vital to the financial health of Pennsylvania’s safety-net hospitals.
Read more about this situation, and the challenges hospitals believe they will face as a result, in this New York Times article
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The National Health Law Program has prepared a useful Q&A about how the Affordable Care Act and its Medicaid expansion will affect Medicare disproportionate share (Medicare DSH) and Medicaid disproportionate share (Medicaid DSH) payments, both of which are so important to Pennsylvania’s safety-net hospitals.
Download that summary here.
The Supreme Court has upheld the constitutionality of the 2009 Affordable Care Act – including the much-disputed mandate that everyone obtain health insurance.
The court’s only disagreement with the reform law was with its provision requiring states to expand Medicaid eligibility as a future condition of obtaining federal Medicaid matching funds. The court ruled that expanding Medicaid eligibility should be optional and that states that choose not to expand their Medicaid programs would still receive the federal matching funds to which they have always been entitled.
In the wake of this decision, SNAP is very concerned about the interplay between the loss of the mandated Medicaid expansion and the Affordable Care Act’s requirement that Medicare DSH and Medicaid DSH payments be cut significantly in the coming years. Those cuts were predicated on the Medicaid expansion adding as many as 20 million people to the ranks of the insured, which was expected to provide additional revenue to hospitals that would help offset a reduction in their Medicare DSH and Medicaid DSH revenue.
For now, all eyes will be on Pennsylvania state officials as they decide what to do in light of the greatly enhanced federal matching funds still available for states that choose to expand Medicaid eligibility.