aamc.org does not support this web browser.
  • Washington Highlights

    MACPAC Releases Report on Medicaid DSH Payments

    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The Medicaid and CHIP Payment and Access Commission (MACPAC) Feb. 1 released its first Report to Congress on Medicaid Disproportionate Share (DSH) Hospital Payments. The report calls for better targeting of Medicaid DSH payments to hospitals with a high share of low-income patients and high levels of uncompensated care.

    The Protecting Access to Medicare Act of 2014 (P.L. 113-93) requires MACPAC to report annually on Medicaid DSH payments and to provide state-specific analyses of the following data elements: changes in the number of uninsured individuals, the amount and sources of hospitals’ uncompensated care costs, and the number of hospitals with high levels of uncompensated care that also provide access to essential community services for low-income, uninsured, and vulnerable populations. The report finds there is little meaningful relationship between state DSH allotments and any of these factors.

    The report also finds that more than one-third of Medicaid DSH payments are made to hospitals that do not meet the statutory criteria for receiving these payments. As such, the commission calls for targeted DSH payments and greater transparency in how hospitals are paid.

    The commission specifically recommends, “The Secretary of the U.S. Department of Health and Human Services should collect and report hospital-specific data on all types of Medicaid payments for all hospitals that receive them. In addition, the Secretary should collect and report data on the sources of non-federal share necessary to determine net Medicaid payment at the provider level.”

    In 2014, Medicaid made $18 billion in Medicaid DSH payments to provide support to safety-net hospitals by helping to offset uncompensated care costs for Medicaid and uninsured patients. Medicaid DSH allotments are scheduled to be reduced by 16 percent beginning in fiscal year (FY) 2018 with reductions increasing to 55 percent by FY 2025.