Capitol Correspondence - 06.03.19

DSH Payments Looked at in Congress and Courts

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ANCOR is sharing these items from Modern Healthcare and Poltico Pro because disproportionate share hospital (DSH) allotments help people with intellectual / developmental disabilities (I/DD) obtain greater access to healthcare. Currently, people with I/DD significantly lag behind their peers without disabilities in terms of access to proper and timely healthcare.

As shared by Modern Healthcare:

“The House Energy and Commerce Committee next week will consider a full repeal of the Medicaid disproportionate-share hospital cuts, a sign that hospitals are getting closer to securing the top lobbying priority for safety net providers and academic medical centers.

The committee will hold a hearing next Tuesday on proposed legislation from Rep. Eliot Engel (D-N.Y.), whose home state gets the single largest so-called Medicaid DSH allotment in the country. In fiscal 2018, New York received $1.8 billion of the roughly $12 billion in annual federal payments.


Medicaid DSH is the second-largest federal program to boost hospital Medicaid funding, representing about $12 billion in federal spending annually. It has been the subject of a political fight over proposed reforms to the program.

Last week, 300 of the 435 U.S. House of Representatives lawmakers sent a letter to the chamber’s leadership urging a two-year delay to the DSH cuts, and hinted that some in Congress believe the Medicaid DSH formulas need to be reconfigured, calling for a “sustainable, permanent” solution.”


As shared by Politico Pro:

“The Supreme Court today ruled that HHS should have sought public comment before changing the Medicare formula for reimbursing hospitals that treat a large number of low-income patients.

The justices, in the 7-1 decision, ordered HHS to vacate the rule.

‘If the government doesn’t like Congress’s notice-and-comment policy choices, it must take its complaints there,’ Justice Neil Gorsuch wrote in the court’s opinion.

The case, Azar v Allina Health Services, centered around CMS’ decision to factor Medicare Advantage patients into its disproportionate share, or DSH, payment calculations for fiscal 2012, without requesting public feedback. This lowered the reimbursement for hospitals, though the case doesn’t affect how HHS now calculates DSH payments, which is based on a formula that went through the formal rulemaking process.

HHS argued during oral arguments in January that a ruling for the hospitals could force rulemaking for ‘a broad swath that has never been done.’ Hospitals argued that the change was significant, and should have had a notice-and-comment period.

Justice Brett Kavanaugh, who ruled in favored of Allina Health Services in 2017 as an appellate judge, recused himself from the case. Justice Stephen Breyer was the only member of the court to side with HHS.”