New York, a state that is more heavily dependent on DSH payments with its high numbers of uninsured, is expected be most dramatically affected by the cuts. But advocates are most worried about hospitals in states without Medicaid expansion.
For the 2014 fiscal year, which begins Oct. 1, CMS will begin to reimburse hospitals under its new formula for Medicare DSH payments, as outlined in the 2014 Hospital Inpatient PPS final rule released in April. Hospitals will begin to receive 25% less from Medicare for treating uninsured patients than they received previously.
"The 2014 cuts to DSH aren't necessarily going to be closing hospital doors, but the margins are so narrow that our hospital would have to look around to see areas where they are losing money and stop doing those things. There will probably be cuts to outpatient clinics, a reduction in community efforts, or ancillary services. But 2018 and 2019, when 5 to 6 billion will be cut to DSH payments, many of our hospitals simply aren't viable at this point," Gremminger said.