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1 1 (February 9, 2021)

handle is hein.crs/govecds0001 and id is 1 raw text is: C r~s W ~#se~src~h $ervii~ ~ ~ t~ 9 Updated February 9, 2021 Medicaid Disproportionate Share Hospital (DSH) Reductions The Medicaid statute requires states to make disproportionate share hospital (DSH) payments to hospitals treating large numbers of low-income patients. This provision is intended to recognize the dis advantaged financial situation of those hospitals becauselow-income patients are more likely to be uninsured or Medicaid enrollees. Hospitals often do notreceivepayment for services rendered to uninsured patients, and Medicaid provider payment rates are generally lower than the rates paid by Medicare and private insurance. (See CRS Report R42865, Medicaid Disproportionate Share Hospital Payments.) Whereas mostfederal Medicaid funding is provided on an open-endedb asis, federal Medicaid DSH funding is capped. Each state receives an annual DSH allotment, which is the maximum amount of federal matching funds that each state is permitted to claim for Medicaid DSH payments. In FY2019, federalDSH allotments totaled $12.6billion. DSH Allotment Reduction Arounts The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended)hasreducedthe numberofuninsured individuals in the United States through thehealth insurance coverage provisions (including the ACA Medicaid expansion). Built on the premise that with fewer uninsured individuals there should be less need for Medicaid DSHpayments, the ACA included aprovision directing the Secretary of the Department of Health and Human Services (HHS) to make aggregate reductions in Medicaid DSH allotments equalto $500 million in FY2014, $600 million in FY2015, $600 million in FY2016, $1.8 billion in FY2017, $5.0 billion in FY2018, $5.6 billion in FY2019, and $4.0 billion in FY2020. Despite the assumption that decreasing the number of uninsured individuals wouldreduce the need for Medicaid DSH payments, the ACA was written so that, after the specific reductions forFY2014 throughFY2020, DSH allotments would havereturnedto the amounts that states would have received without the enactment of the ACA. In other words, in FY2021, states' DSH allotments would have rebounded to their pre-ACA-reduced levels, with annual inflation adjustments for FY2014 to FY2021. The Medicaid DSH reductions have been amended by a number of laws since the ACA. The specific laws that have amended the Medicaid DSH reductions are the Middle Class TaxRelief and Job Creation Act of 2012 (P.L. 112-96); the American Taxpayer Relief Act of2012 (P.L. 112- 240); the Bipartis an Budget Act of2013 (P.L. 113-67); the Protecting Access to Medicare Act of 2014 (P.L. 113-93); the Medicare Access and CHIP Reauthorization Act of 2015 (P.L. 114-10); the Bipartisan BudgetActof2018 (BBA 2018; P.L. 115-123); the Continuing Appropriations Act, 2020, and Health Extenders Act of2019 (P.L. 116-59); the Further Continuing Appropriations Act, 2020, and Further Health Extenders Act of2019 (P.L. 116-69); the Further Consolidated Appropriations Act, 2020 (P.L. 116-94); the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136); the Continuing Appropriations Act, 2021, and Other Extensions Act (P.L. 116-159); the Further Continuing Appropriations Act, 2021, and Other Extensions Act (P.L. 116-215); and the Consolidated Appropriations Act, 2021 (P.L. 116- 260). Under current law, the Medicaid DSH reductions are to occur fromFY2024 through FY2027 (see Figure 1). The aggregate reductions to the Medicaid DSH allotments equal $8.0 billion for each of those years. https://crs repc

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