Analysis of Current and Future Disproportionate Share Hospital Allotments

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March 2016

Chapter 2 of the March 2016 Report to Congress on Medicaid and CHIP compares current and future disproportionate share hospital (DSH) allotments to three factors Congress asked MACPAC to study in the Protecting Access to Medicare Act: a hospital’s share of Medicaid and other low-income patients, its uncompensated care burden, and its delivery of essential community services. The analysis finds little relationship between the amount of DSH payments and these three benchmarks.

The chapter, which was originally published online in February 2016 as part of the freestanding Report to Congress on Medicaid Disproportionate Share Hospital Payments, also reviews early reports of the Patient Protection and Affordable Care Act’s effect on hospitals. Although available information suggests that the coverage expansions are improving hospital finances in general, it is not yet clear how hospitals that are particularly reliant on Medicaid DSH payments are being affected. In addition, because post-2014 data on all sources of hospital uncompensated care are not yet available, it is too early to evaluate how the pending DSH allotment reductions will affect these providers, especially because Medicaid shortfall may be increasing with increased Medicaid enrollment.

Publication Type: Reports to Congress

From: March 2016 Report to Congress on Medicaid and CHIP

Tags: Affordable Care Act, data, disproportionate share hospital (DSH) payment, financing, hospitals, payment, safety net providers, supplemental payments, uninsured