Disproportionate share hospital (DSH) payments help cover the uncompensated costs of indigent care. The Affordable Care Act cut these payments, assuming coverage expansion would reduce uncompensated care. But various federal and state policy decisions and legal actions limited access to coverage and swelled the number of uninsured far beyond those optimistic forecasts. But the DSH cuts remain in law, even as uncompensated care grows dramatically.
Unless Congress acts, Medicaid DSH will be cut by $8 billion Oct. 1, 2023 — two-thirds of all annual program funding — and by $32 billion over the next four fiscal years.