HHS Details Limits to Medicaid Expansion

"We continue to seek efficiencies and identify opportunities to reduce waste, fraud and abuse in Medicaid, and we want to work with Congress, states, and stakeholders to achieve those goals while expanding access to affordable health care," the memorandum states.

"The Supreme Court decision has made the higher matching rates available in the Affordable Care Act for the new groups covered even more important to incentivize states to expand Medicaid coverage. The Administration is focused on implementing the Affordable Care Act and providing assistance to states in their efforts to expand Medicaid coverage to these new groups."

 With respect to the reduction of disproportionate share payments for safety net hospitals that are scheduled to begin in 2014, HHS made it clear that it has heard the concerns raised by providers.

The memo states that "the law directs HHS to develop a methodology to reduce DSH funding over time in a way that is linked to reductions in the number of uninsured or how states target their funds. We have heard from states and healthcare providers about their concerns related to this change and are exploring all options. The Department will propose this methodology for public comment early next year."

Bruce Siegel, MD, president/CEO of the National Association of Public Hospitals and Health Systems, said in prepared remarks that he was "greatly encouraged" by the details in the memorandum, particularly as it relates to DSH payments and the "expansion of Medicaid consistent with the scope of the Affordable Care Act. The agency's guidance follows the letter and spirit of the law and takes an important step toward significantly reducing the ranks of the uninsured."