Delay Sought for DSH Cuts
Huang and Pryga say their associations have been pressing the Obama administration and the Department of Health and Human Services to postpone the DSH reimbursements because of the timing lag, and also because more than 10 states have rejected the Medicaid expansion, which negates the trade-off in states that reject Medicaid expansion.
"If your income is below 100% of the federal poverty line you are not eligible for any subsidies through the exchange and in many states the Medicaid eligibility level is like 30% – 40% of the federal poverty level," Pryga says. "You can have a pretty substantial gap between the Medicaid eligibility and the eligibility for subsidies through the exchange in the absence of Medicaid expansion."
Huang says DSH payments "prop up a lot of our hospitals."
"It doesn't cover 100% of the costs but it does a really good job of offsetting some of the uncompensated care that these hospitals take on. Given all of the uncertainty we think it makes sense for the DSH cuts to be delayed until the administration has data to see what that take up looks like. Even with the data limitations it is going to be a two- to three-year lag between fiscal 2014 and when the data will actually show fiscal 2014 performance."