But when the Supreme Court last year gave states the ability to reject that level of expansion, it meant that hospitals in some states would probably continue to treat high numbers of uninsured patients, and would continue to need DSH subsidies.
"The Affordable Care Act's disproportionate share hospital reductions are neither justified nor sustainable—especially in light of the Supreme Court's decision on Medicaid expansion," said Beth Feldpush, Senior Vice President for Policy and Advocacy for the National Association of Public Hospitals and Health Systems in a prepared statement.
"We must delay these cuts until we fully understand how the court's decision will affect the number of uninsured and levels of uncompensated care. We appreciate that CMS, with its rule today, appears to share this concern by proposing a reduction methodology for only 2014 and 2015," she said.
Rick Pollock, American Hospital Association Executive Vice President, said in a statement that the AHA thinks the cuts "should be delayed for two years in order to better ascertain whether coverage expansions have been implemented. Today's proposed rule on implementation of the Medicaid DSH reductions, which were congressionally-mandated, appears to have been accomplished in a responsible way based upon our preliminary analysis.
"CMS also recognized that since some states have yet to decide whether to expand Medicaid, this proposed rule will not discourage expansion, nor will it penalize hospitals in those states that have yet to make a decision. We also believe limiting the proposed reductions to two years opens the door for coverage expansions to be more fully realized."