May 4, 2001

Small State Medicaid DSH Programs Would Benefit from New Legislation

House and Senate legislation has been introduced to help 15 states with small Medicaid Disproportionate Share Hospital (DSH) programs. Sponsored by Senators Jeff Bingaman (D-N.M.), Michael Enzi (R-Wyo.) and Max Baucus (D-Mont.) and Representatives Bill Barrett (D-Wis.) and Heather Wilson (R-N.M.), the "Medicaid Safety Net Improvement Act of 2001" allows states with DSH programs totaling less than three percent in overall Medicaid spending to increase their federal DSH allotment to three percent of total Medicaid spending.

S.776/H.R. 1604 would help 15 states: Arkansas, Delaware, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Wisconsin, and Wyoming.

The Balanced Budget Act of 1997 froze spending at a low fixed amount for many of these small DSH states. Last year, the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) attempted to address the unique circumstances faced by these states by providing some relief. Under BIPA, states that had DSH programs that totaled less than one percent of their overall Medicaid spending had their federal DSH allotment increase to one percent of the state's total Medicaid spending.

The AAMC supports this legislation, as it would give small DSH states access to greater resources to help their safety net hospitals.

Information: Lynne L. Davis or Christiane Mitchell, AAMC Office of Governmental Relations, 202-828-0526.