Safety Net Hospitals Raise Concerns on DSH Cuts

Under a preferred scenario, Feldpush says DSH payments would gradually decline each year as coverage expands. "Unfortunately when the ACA was being written, the Congressional Budget Office could not give a savings score to that implicit understanding of a natural decline in the need for DSH," Feldpush says.

"That is how we ended up with those direct cuts that are tied into the law. We would have said we don't need to put any DSH reductions into law at all because we will be gradually spending less on this program as coverage expands." 

The PPACA provides a framework but gives broad implementation powers to the Health and Human Services Secretary Kathleen Sebelius and the Centers for Medicare and Medicaid Services. Feldpush says NAPH is also asking them for a review of how DHS payments are distributed.

"In addition to cutting the shared total dollars there is going to be a redistribution of the DSH dollars," Feldpush says. "Our advocacy efforts are focused now on the implementation approach to make sure remaining DSH dollars are distributed to hospitals with the highest needs—that is those hospitals that really do take care of the disproportionate burden of the low-income patients."