Overview of Medicaid Policy on Disproportionate Share Hospital Payments

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March 2016

Medicaid disproportionate share hospital (DSH) payments provide substantial support to safety-net hospitals. In 2014, Medicaid made a total of $18 billion in DSH payments. Although most DSH payments go to hospitals that serve a particularly high share of Medicaid and other low-income patients, known as deemed DSH hospitals, analysis presented in Chapter 1 of the March 2016 Report to Congress on Medicaid and CHIP shows that more than one-third of DSH payments are made to non-deemed hospitals that may not have the greatest need.

Chapter 1 was originally published online in February 2016 as part of the freestanding Report to Congress on Medicaid Disproportionate Share Hospital Payments. The chapter outlines the evolution of DSH payment policy, the variation in DSH allotments and spending, and concludes with an overview of scheduled reductions in DSH allotments, which the Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) originally scheduled beginning in fiscal year (FY) 2014 but are now slated to begin in FY 2018.

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