TN hospitals get $80 million under special DSH waiver

Tennessee hospitals received $80 million this week from the Centers for Medicare & Medicaid Services (CMS) to help cover indigent care services.

Tennessee is the only state that does not receive ongoing funding from the Disproportionate Share Hospital (DSH) payment program, the Memphis Business Journal reported. That's a legacy from the creation of the TennCare Medicaid program 20 years ago--the Volunteer State gave up participation in DSH payments because legislators thought TennCare would cover the entire cost of care for uninsured residents. Although TennCare was dissolved in 2005, the legislature never restored DSH participation.

CMS will scale back DSH payments by more than $1 billion over the next couple of fiscal years. The cuts are based on the presumption that expansion of Medicaid under the Affordable Care Act would reduce the number of uninsured and their related costs to hospitals. However, Tennessee and two dozen other states have declined to expand Medicaid eligibility, which means hospitals in those states must weather the DSH cuts with few other alternatives to cover low-income patients.

Tennessee hospitals have received a special payment for the past four years as part of a waiver, according to the Business Journal. Lawmakers say they are trying to change that. "There's no reason in the world why Tennessee should be the only state without this kind of payment," Tennessee Sen. Lamar Alexander (R) told the Associated Press.

Among the recipients of the federal largesse is Erlanger Medical Center in Chattanooga, which will receive $30 million. It's the first-ever payment to the hospital under the waiver, according to the AP. Erlanger officials say the payments will help restore accrued paid time off and provide more overall financial stability, according to Erlanger provides nearly $90 million a year in uncompensated care.

The Regional Medical Center at Memphis has received $12 million annually for the past several years, according to the Business Journal.

To learn more:
- read the Memphis Business Journal article
- here's the AP article
- check out the article