Two VA hospitals could lose $500M in DSH payments

Two of Virginia's largest hospitals stand to lose a combined $500 million to provide care for uninsured patients between 2017 and 2022, the Richmond Times-Dispatch reported.

The facilities, VCU Medical Center and University of Virginia Medical Center are poised to lose the money due to cuts in the federal Disproportionate Share Hospital (DSH) program, coupled with the fact the state has yet to decide whether to expand Medicaid eligibility under the Affordable Care Act.

Sheldon M. Retchin, M.D., chief executive officer of VCU Medical Center, called the pending cuts "disastrous" and said their effects would make his facility look like Calcutta. "It's going to be bad," the Times-Dispatch reported. "I don't know how you get to $500 million."

Retchin testified in front of Virginia's Medicaid Innovation and Reform Commission, which will make recommendations as to whether the state should expand Medicaid eligibility. Although Virginia's statehouse is Republican-controlled and has objected to such an expansion, the state's governor-elect, Terry McAuliffe, is a Democrat and may be able to sway debate on the issue.

Altogether, Medicaid expansion could cover an additional 400,000 Virginians and could create as many as 30,000 jobs, according to the Washington Post. The federal government would pay 100 percent of the cost of expansion from 2014 through 2016, and 90 percent after that. The cost of expansion is estimated at about $2 billion per year, according to the Post.

Medicaid expansion has been a sore point of contention among states, who were given the option not to participate last year by the U.S. Supreme Court. As a result, about half of the states have decided not to expand Medicaid, placing additional pressures on their hospitals, which would continue to treat large numbers of uninsured patients while still trying to fill in gaps created by the planned cuts to DSH payments.

To learn more:
- read the Times-Dispatch article
- here's the Washington Post article

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