Facing billions in Medicaid cuts, hospitals press Congress for help

As hospitals are looking at the possibility of the loss of billions of dollars in federal aid, they are calling on Congress to intervene.

Several healthcare organizations, including the American Hospital Association, America’s Essential Hospitals, and the Association of American Medical Colleges, sent a letter Monday to Congressional leaders.

Unless Congress acts, on Oct. 1, health systems are looking at the beginning of an $8 billion reduction in the Medicaid Disproportionate Share Hospital (DSH) program.

Health systems, including safety-net hospitals that treat a large number of Medicaid patients, rely on the DSH program. More than 2,500 hospitals nationwide receive support from the program to help offset the costs of treating patients who can’t pay.

“Medicaid underpayment continues to pose ongoing financial challenges for hospitals treating our nation’s most vulnerable citizens, including millions of children,” the letter states. “Now is not the time for additional cuts to Medicaid funding, as hospitals are facing continued financial hardships while the country emerges from the COVID-19 pandemic.”

• Read more: What hospitals hope to see from Washington in 2023

Beth Feldpush, senior vice president of policy and advocacy for America’s Essential Hospitals, told Chief Healthcare Executive® in a February interview that the cuts would be virtually catastrophic.

“Our members are heavily dependent on Medicaid,” she said.

While she said it’s difficult to predict the exact financial toll if the cuts move ahead as scheduled, Feldpush said, “These cuts are big enough they could cause hospitals to close.”

Hospitals also argue the timing is especially difficult this year, as states are redetermining eligibility for Medicaid as the federal COVID-19 Public Health Emergency ends this spring. States can begin recalculating eligibility in April.

​​The Medicaid DSH program is slated to see more cuts in the coming years. The program is scheduled to see reductions of $8 billion annually through 2027. The program is supposed to get less federal aid in the coming years, under the idea that there would be fewer people without insurance coverage under the Affordable Care Act.

Hospitals argue that millions remain uninsured, so health systems haven’t seen the anticipated reductions in uncompensated care.

Congress has delayed cuts to the DSH program previously, and hospitals are hoping that lawmakers will come through again.

“We urge you to once again address the pending Medicaid DSH cuts and protect access to care for our nation’s most vulnerable patients,” the letter states.

The hospitals sent the letter to the ranking members of the Senate and House: Senate Majority Leader Charles Schumer, D-N.Y., Senate Minority Leader Mitch McConnell, R-Ky., House Speaker Kevin McCarthy, R-Calif., and House Minority Leader Hakeem Jeffries, D-N.Y.

Other groups that signed the letter include the Catholic Health Association of the United States; the Children’s Hospital Association, the Federation of American Hospitals; the National Association for Behavioral Healthcare; Premier healthcare alliance; and Vizient, Inc.