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CMS Proposes Reduced Hospital DSH Cuts

Cheryl Clark, for HealthLeaders Media, May 14, 2013

A bill introduced earlier this month by Rep. John Lewis (D-GA), would delay the DSH cuts for two years, and Pollack says the AHA supports that bill.

By definition, a hospital eligible for disproportionate share funds has at least two obstetricians with staff privileges at the hospital who agree to provide obstetric services to Medicaid beneficiaries and must have a Medicaid inpatient utilization rate of at least 1%.

By another definition of PPACA, a hospital must document that more than 25% of its patients are low-income.

In the meantime, however, CMS is required by law to issue its proposed rule now in preparation for implementation Oct. 1.

The 2010 healthcare reform law established a schedule to reduce DSH payments starting this October and in every year though 2020. The schedule of reductions to states, which then would be passed on to DSH hospitals, is as follows, although the amounts for years 2016 to 2020 are now apparently in limbo:

  • FY 2014: $500 million
  • FY 2015: $600 million
  • FY 2016: $600 million
  • FY 2017: $1.8 billion
  • FY 2018: $5 billion
  • FY 2019: $5.6 billion
  • FY 2020: $4 billion
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