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  • Washington Highlights

    MACPAC Releases March 2019 Report to Congress, Including Recommendation for DSH Allotments to States

    Andrew Amari, Hospital Policy and Regulatory Specialist

    The Medicaid and CHIP (Children’s Health Insurance Program) Payment and Access Commission (MACPAC) March 15 released its March 2019 Report to Congress on Medicaid and CHIP. The Commission made recommendations on restructuring disproportionate share hospital (DSH) allotment reductions in current law and upper payment limit (UPL) oversight. Additionally, MACPAC included its annual analysis of DSH allotments to states.

    In its annual analysis of DSH allotments to states, MACPAC reported that $12.6 billion in federal DSH funds were allotted to states in fiscal year (FY) 2019. These allotments are scheduled to be reduced in fiscal FY 2020, with cuts continuing through FY 2025. If Congress chooses to proceed with these impending reductions, MACPAC recommends the reductions be phased in gradually and applied first to states with projected unspent allotments.

    Under current law, the allotments would be reduced by $4 billion in FY 2020 and $8 billion a year in FYs 2021–2025, but MACPAC recommends phasing the reductions in by $2 billion in FY 2020, $4 billion in FY 2021, $6 billion in FY 2022, and $8 billion a year in FYs 2023–2029. In addition, the Commission recommends that Congress develop a new reduction distribution methodology based on the number of nonelderly, low-income individuals in a state, after adjusting for differences in hospital costs in different geographic areas [see Washington Highlights, Jan. 25].

    Moreover, MACPAC recommends that the Department of Health and Human Services (HHS) establish process controls to ensure accurate and complete annual hospital UPL data. The Commission also recommends HHS make hospital-specific UPL data and methods publicly available in a standard format. Both recommendations were made to address discrepancies in UPL data.