Over 230 House Reps Join Fight Against Medicaid DSH Cuts

Enacting scheduled cuts to Medicaid Disproportionate Share Hospital (DSH) payments would leave the most vulnerable patients and providers open to more access to care problems, a bipartisan group of over 230 House Representatives is telling top lawmakers.

In a letter to Speaker of the House Kevin McCarthy and Democratic Leader Hakeem Jeffries, the group led by Representatives Yvette Clarke (D-NY), Dan Crenshaw (R-TX), Diana DeGette (D-CO), and Michael Burgess (R-TX) are seeking to stop the $8 billion annual cut from starting on October 1st. Lawmakers have already postponed the cuts through 13 pieces of legislation since 2013.

"If the proposed cuts go into effect, rural and urban safety net hospitals will lose critical funding that enables them to keep their doors open and treat the most vulnerable Americans," the letter stated.

The upcoming Medicaid DSH payment cut is equivalent to more than two-thirds of annual federal DSH spending, the group explained. The cut will also occur annually through the 2027 fiscal year and impact some states more than others.

"In fact, some states, according to the Medicaid and CHIP Payment and Access Commission (MACPAC), will face cuts of 90 percent of their current DSH allotments," the group said in the letter.

"Our nation's rural and urban safety net hospitals cannot sustain losses of this magnitude, leaving our constituents and communities without access to the medical care they depend on and need."

The group of Congressional leaders urged each party's leader to consider H.R. 2665, the Supporting Safety Net Hospitals Act, which was recently introduced to eliminate Medicaid DSH cuts for the fiscal years 2024 and 2025.

"This legislation is a reasonable and responsible path to take in order to avoid the disastrous consequences to our safety net hospitals if the Medicaid DSH cuts were to take effect," the letter stated. "It is imperative we continue to protect access to Medicaid beneficiaries who heavily rely on the essential services provided through Medicaid DSH program."

The American Hospital Association (AHA) backs H.R. 2665 and encourages lawmakers to enact it to prevent Medicaid DSH payment cuts.

“The AHA appreciates the bipartisan leadership of Reps. Clarke, Crenshaw, DeGette and Burgess, and the overwhelming support of so many House members, for the Medicaid DSH program, which allows many hospitals across the country to continue to serve their patients and communities during challenging financial times,” Stacey Hughes, AHA’s executive vice president, said in response to the letter authored by Congressional leaders.

The bill has also received support from the Federation of American Hospitals (FAH), America’s Essential Hospitals, and several state-level hospital associations.

“When patients on Medicaid need care, they need to know hospitals will be there for them. H.R. 2665 will prevent major cuts to Medicaid Disproportionate Share Hospital (DSH) payments that would make it more difficult for hospitals to ensure that the most vulnerable patients have access to necessary services. We appreciate the Energy and Commerce Committee’s laser focus on moving this legislation, and commend sponsors Reps. Clarke, Crenshaw, DeGette, and Burgess for garnering bipartisan support on this urgent matter from more than 200 Members of Congress,” Chip Kahn, FAH’s president and CEO, said in a statement for the group of Representatives.

MedPAC recently told Congress in its March 2023 report that it “is concerned that the magnitude of cuts (54 percent in FY 2024) in DSH allotments under current law may disrupt the financial viability of some safety-net hospitals.” The group recommended that should the payment reductions take effect, they should be phased in gradually to mitigate disruptions to safety-net hospital finances.

In FY 2021, allotments to states for DSH payments totaled $14.3 billion, with state-specific allotments ranging from $15 million to $1 billion to share with safety-net hospitals.