DSH Cuts are set to expire...again.
By Cody Smart
February 27, 2024
As the hands of the legislative clock tick down to a nerve-wracking deadline, Disproportionate Share Hospital (DSH) payments are once again at the heart of debate in Washington. Or so we're told anyway. And after all, we've seen this film before.
With the Republican-led House tangled in internal strife and the Senate swiftly rallying support, a resolution looms that could continue the perpetual postponement of the DSH Cuts. But with the current extension expiring on March 8th, and myriad budget priorities facing Congress, even the most fervent skeptics should beg the question: will DSH cuts actually happen this time?
The atmosphere in the Republican-led House reflects deep-seated divisions, with a segment of GOP representatives advocating for significant reductions in government spending. In November, we got a temporary resolution maintaining 2023 funding levels for various programs, including DSH, into early 2024. But what now?
The Disproportionate Share Hospital program, crucial funding so many Hospital systems serving low-income populations, is yet again facing $8 billion in annual cuts. These reductions, initially prescribed by the Affordable Care Act to counterbalance the costs of expanded coverage, have been endlessly postponed. This hesitance underscores an ongoing reluctance to diminish support amid persistent healthcare challenges, such as the aftermath of the pandemic. As the latest March 8th deadline nears, the healthcare finance industry remains either tuned in, or just tired from so many false alarms.
With Senate leaders Chuck Schumer and Mitch McConnell endorsing another compromise, and the White House ready to approve, we're hoping to secure yet another temporary reprieve for DSH funding. Yet, this pattern of last-minute rescues prompts vital questions regarding the sustainability of this kind of fiscal strategy and its long-term effects on the stability of the healthcare finance system.
As Congress races against the clock, the healthcare sector watches with bated breath. Or do we? Eventually it becomes a lot easier to ignore the boy who cries wolf.
Either way, the decisions made in the coming days will be crucial in determining whether DSH cuts will be deferred once more or if hospitals must abruptly prepare for what will be unthinkable to some hospital systems.
