CMS Wants Billions in Hospital DSH Cuts

Starting this October, CMS could begin cutting billions in disproportionate-share hospital payments. The ACA mandated that Medicaid DSH funds be cut by $43 billion between fiscal years 2018 and 2025. On July 27th, CMS proposed to move forward with the mandated cuts beginning on Oct. 1st. The cuts would build year over year, starting at $2 billion in fiscal 2018, and growing to $8 billion by fiscal 2025. In an attempt to lower the impact, CMS states in the proposal that the formula used for these cuts would be geared toward ensuring that DSH funds reach those providers with the greatest need for financial support. Among other things, the rule would impose a smaller cut in low DSH states. Larger cuts would be felt in states that have the lowest percentage of uninsured, states that do not target DSH payments for hospitals with high Medicaid volumes, and states that do not target DSH payments on hospitals with high levels of uncompensated care. Click here for the rule.