Ongoing cuts to DSH payments will hurt hospitals in states where Medicaid expansion under the PPACA has been blocked, Clark said.
"One of the big issues in this one is going to be DSH reimbursement," he said of the proposed 2015 IPPS rules. "The assumption was the need for DSH payments was going to go down. CMS doesn't seem to be taking into account that the level of uncompensated care is not going down the way regulators, lawmakers and others had expected… For 2015, they're not making dramatic changes. It seems like they're going ahead with the existing formula."
The federal officials who drafted the PPACA expected states to expand Medicaid to more adults under a deal that has Washington paying 100 percent of the bill for the first three years. Federal support of Medicaid expansion is set to taper down to 90 percent in 2020.
"States that didn't expand Medicaid and already had a relatively sick population are really hurting," Clark said of states such as Georgia and Missouri, where hospitals are set to endure another round of double-digit cuts to DSH payments in 2015. "Struggling, marginal hospitals… the DSH payments may have been making them solvent. Those marginal ones are going to be in a bind."