Senate approves delay in planned DSH cuts

Dollar bill with a hole in Washington's face on it and the word "Medicaid" in its place
Earlier this week, the Centers for Medicare and Medicaid Services published a final rule laying out how it would implement the cuts. (zimmytws/GettyImages)

The Senate approved a delay in $4 billion in planned cuts to Medicaid disproportionate share hospital (DSH) payments set to go into effect in November.

With the approval of the continuing resolution that will allow the government to avoid a shutdown, Congress temporarily stopped the first of what will add up to be $44 billion in cuts through fiscal 2025.

Federal law requires that state Medicaid programs make DSH payments to qualifying hospitals that serve a large number of Medicaid and uninsured individuals. But anticipating lower rates of uninsured patients and lower levels of uncompensated care, the Affordable Care Act modified the amount of funding available to states under the Medicaid program. 

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Those cuts have previously been delayed.

RELATED: CMS finalizes rule on DSH cuts worth up to $8B annually through 2025

Earlier this week, the Centers for Medicare & Medicaid Services published a final rule laying out how it would implement the cuts. Under the rule, DSH payments will set cuts worth $4 billion in fiscal 2020 and $8 billion for the following five years. The cuts are set to start taking effect Nov. 22.

Hospital groups lauded the delay on Thursday saying it "underscores the threat this cut poses to communities" and called on President Donald Trump to sign the bill.

"We thank the Senate for acting today to forestall a devastating cut to vital support for the nation’s more than 300 essential hospitals and the vulnerable people and communities they serve," said Bruce Siegel, M.D., president, and CEO of America’s Essential Hospitals (AEH) in a statement. "The trajectory of the cuts—$44 billion over six years—simply would be unsustainable for essential hospitals, which already operate with no or narrow margins and high levels of uncompensated care.

The House Energy and Commerce Committee’s is considering a plan that would repeal the cuts in fiscal years 2020 and 2021 and cut in half the scheduled $8 billion cut in fiscal year 2022—a move AEH and the Federation of American Hospitals have both supported.