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Preventing $8 Billion in DSH Cuts

August 07, 2023

A bipartisan group of U.S. Senators―led by Bob Casey and supported by John Fetterman―is calling on their colleagues to prevent cuts to the Medicaid Disproportionate Share Hospital (DSH) program.

The Medicaid Disproportionate Share Hospital (DSH) program provides payments to hospitals that serve a high proportion of Medicaid beneficiaries and uninsured patients. The payments are essential for hospitals to offset their uncompensated care costs from treating low-income patients.

In a letter to Senate leaders published Friday, 51 U.S. Senators highlighted the value of the DSH program across the nation.

“Cuts of this magnitude could undermine the financial viability of hospitals, threatening access to care for the most vulnerable Americans,” the Senators wrote. “It is essential that we continue to protect those who have come to rely on the services provided by Medicaid DSH hospitals.”

Here’s what you need to know:

  • Background:  Starting during 2014, the Affordable Care Act required cuts to the DSH program, but coverage gains due to the law have not offset uncompensated care costs. 
  • The stakes:  The cuts, slated for October, would cost Pennsylvania hospitals $500 million annually and hospitals $8 billion nationally.
  • Taking action:  Lawmakers have passed bipartisan legislation several times during the past 11 years to avert these cuts and will need to do so again before October.
  • Quotable:  “The Medicaid DSH program keeps many hospitals financially viable and able to provide care to vulnerable individuals. Drastic cuts to this program could lead to a reduction in access to care for those who need it most,” the letter notes.

Earlier this year, more than 225 U.S. House lawmakers—including 11 from Pennsylvania’s congressional delegation—also wrote a call to action to their colleagues to prevent harmful cuts to the program.

HAP thanks Senators Casey and Fetterman for taking part in this important effort. The letter is available to review online.

For questions, contact John Myers, HAP’s vice president, federal advocacy.