Deborah Bachrach Speaks on Medicaid DSH Payment Cuts

Deborah Bachrach Speaks on Medicaid DSH Payment Cuts

“Medicaid DSH Cuts Could Add to Financial Woes of Safety Net Hospitals”
Congressional Quarterly HealthBeat

June 4, 2012 – Manatt’s Deborah Bachrach , a special counsel in the firm’s Healthcare Division, spoke to Congressional Quarterly HealthBeat about cuts to Medicaid disproportionate share hospital (DSH) payments required by health reform.

As reported by Congressional Quarterly HealthBeat, Medicaid DSH payments, which provide funds to hospitals that treat large numbers of Medicaid and uninsured patients, will be reduced by a total of $18 billion between 2014 and 2020 under the health law. Cuts to DSH payments could leave safety net facilities unable to pay for necessary modernizations in healthcare delivery. In response, hospitals, including safety net facilities, are reducing admissions, forging partnerships with other providers, expanding primary care and care management, and entering into quality-based shared savings arrangements with payers.

Bachrach said, “The DSH cut is premised on the success of the [health overhaul].” If the law is completely successful, there will be 20 million to 26 million uninsured remaining, she added. Policymakers need to ensure that DSH funding is adequate to cover the cost of services to the remaining uninsured. She recommended allocating the funds along a sliding scale, based on actual services provided to patients.

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