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Coverage and Delivery Reform

Medicaid, administered by states and jointly funded by states and the federal government, is the largest health insurance program in the United States, providing coverage to nearly one-in-four Americans – more than 72 million beneficiaries. As part of their missions, AAMC-member teaching hospitals and their physician faculty care for a disproportionate number of these patients, despite low Medicaid reimbursement rates. While representing 5% of the nation’s hospitals, major teaching hospitals account for 25% of all Medicaid hospital care and provide 31% of all charity care. Medicaid disproportionate share hospital (DSH) payments help alleviate some of this burden, but this funding is at risk. Unless Congress acts, Medicaid DSH funding will be cut by $4 billion in FY 2020 and increase to $8 billion per year between FY 2021-2025. Cuts of this magnitude would devastate the health care safety net.

Medicaid also plays a critical role in funding graduate medical education (GME). Though not mandatory, 42 states and Washington, DC, currently contribute to Medicaid GME to help offset the higher costs associated with training residents in teaching hospitals. This funding allows more physicians to be trained in teaching institutions, which improves not only the number of physicians, but also cultural competence, coordination between health care and community organizations, and access for Medicaid beneficiaries. Due to state budget shortfalls and Medicaid managed care organizations, there are serious concerns that less Medicaid funds will be available to train future physicians.

News and Updates

Over 300 House Members Call for Delay of Medicaid DSH Cuts

May 17, 2019

Reps. Eliot Engel (D-N.Y.) and Pete Olson (R-Texas) May 13 led a bipartisan “Dear Colleague” letter urging House leadership to delay the scheduled Medicaid Disproportionate Share Hospital (DSH) cuts.

CMS Releases Final Rule on Drug Price Transparency

May 10, 2019

The Centers for Medicare and Medicaid Services (CMS) May 8 released a final rule requiring drug manufacturers to disclose drug prices in direct-to-consumer (DTC) television advertisements. This follows the Oct. 15, 2018, publication of the proposed rule [see Washington Highlights, Oct. 19, 2018].

MACPAC Makes Recommendations on Prescription Drug Policy, Treatment of Third-Party Payments in Medicaid Shortfall Definition

April 12, 2019

The Medicaid and CHIP Access and Payment Commission (MACPAC) April 11-12 met to vote on potential recommendations to Congress on both prescription drug policy and addressing third-party payments in the disproportionate share hospital (DSH) definition of Medicaid shortfall.

HHS Secretary Testifies Before Senate Appropriations Committee on President’s Budget Proposal

April 5, 2019

Health and Human Services (HHS) Secretary Alex Azar April 4 testified on the president’s fiscal year (FY) 2020 budget proposal [see Washington Highlights, March 15 and March 22] before the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies (Labor-HHS).

House Committee Advances Bills on Drug Pricing and Health Coverage

April 5, 2019

The House Energy and Commerce Committee April 3 held a markup to review and advance a series of bills related to prescription drug pricing and health insurance coverage.

On Government Affairs

Testimony and Correspondence

External Resources