Bipartisan effort arises to block billions in Medicaid cuts to hospitals

From left, U.S. Reps. Yvette Clarke, Dan Crenshaw, Diana DeGette, and Michael Burgess have sponsored a bill to block billions in Medicaid cuts to hospitals. (Photos: U.S. House of Representatives)

Safety-net hospitals have been warning that looming reductions of billions in Medicaid funding would be devastating, and a bipartisan group of lawmakers is working to avert the cuts.

Democratic and Republican House members have introduced a bill that would prevent $16 billion in funding to Medicaid’s disproportionate share hospital (DSH) program. The program is designed to aid hospitals that care for a high percentage of patients who rely on Medicaid.

Bruce Siegel, president and CEO of America’s Essential Hospitals, said in a statement that the legislation “would avert disastrous cuts to essential hospitals.”

“These planned cuts—two-thirds of all federal DSH dollars in fiscal years 2024 and 2025—would destabilize hospitals and local economies and threaten the well-being of millions of people,” Siegel said in a statement. “Essential hospitals rely on DSH. Without this vital support, the average essential hospital would operate in the red.”

U.S. Rep. Yvette Clarke, D-N.Y., is the prime sponsor of the bill, dubbed the Supporting Safety Net Hospitals Act (H.R. 2665). Other co-sponsors include U.S. Reps. Dan Crenshaw, R-Texas; Diana DeGette, D-Colo.; and Michael Burgess, R-Texas.

“Medicaid DSH payments are critical for hospitals that provide care to millions of Americans, where they serve a disproportionate number of low-income and uninsured patients,” Clarke said in a statement. In her New York district alone, hospitals could lose hundreds of millions in aid if the cuts take place.

On the opposite side of the aisle in Congress, Crenshaw said in a statement he’s looking to prevent cuts for hospitals in Houston. “This bill will ensure access to care for our most vulnerable patients and the hospitals who serve them,” he said.

Unless Congress acts, on Oct. 1, health systems are looking at an $8 billion cut in the DSH program. The program is supposed to be cut by $8 billion annually through 2027.

America’s Essential Hospitals has been pressing Congress and President Biden’s administration to preserve aid for the DSH program.

The program was slated to lose funding under the Affordable Care Act, due to the projection that hospitals would see fewer patients without insurance. But hospital advocates say coverage levels haven’t met expectations, and health systems are caring for many on Medicaid, and many could be losing coverage as some states pull back on Medicaid coverage.

The American Hospital Association has also sent a letter in support of the legislation to the sponsors. The association notes that hospitals have suffered financially in the COVID-19 pandemic, and hospitals that rely on the DSH program are ill-equipped to lose more aid.

“Hospitals are dealing with financial instability due to the long-lasting impact of the COVID-19 pandemic as well as the increased inflationary costs they have incurred for the staffing, supplies, drugs and equipment necessary to be able to serve their communities,” the association said in the letter.

Other groups, including the Greater New York Hospital Association and the Healthcare Association of New York State, are supporting the legislation.

“Securing a delay of the severely harmful Medicaid DSH cuts scheduled to occur in October is critical to the survival of our financially struggling safety net hospitals,” Kenneth E. Raske, President of the Greater New York Hospital Association, said in a statement.

While Siegel is looking to prevent the reductions to the DSH program, he also called for lawmakers and the administration to do more to aid hospitals that care for those with low incomes.

“We must stop these cuts and, instead, consider ways to ensure federal safety net support reaches hospitals that care for low-income and marginalized populations,” Siegel said.

Other healthcare organizations have been calling on congressional leaders to ensure funding continues for the DSH program.