How health systems are fighting for higher DSH payments
Read Article: Modern Healthcare
Article Summary: Hospitals are suing the U.S. Department of Health and Human Services (HHS) over changes to the Medicare Disproportionate Share Hospital (DSH) payment formula, which exclude Medicare Advantage patients. They argue that this change has led to significant financial losses for hospitals serving low-income populations. The lawsuits seek billions in back payments, but the legal battle introduces uncertainty for hospital budgets and long-term financial planning. Safety-net and rural hospitals, which rely heavily on DSH payments, are particularly vulnerable to financial strain if the policy remains unchanged.
The Risk:
Reduced Hospital Reimbursements Due to DSH Rule Changes: Hospitals argue that changes to the Medicare DSH payment formula, which exclude Medicare Advantage patients, have resulted in lower reimbursement rates. This financial shortfall particularly affects hospitals that rely on DSH payments to support care for low-income patients.
Legal and Financial Uncertainty from DSH Lawsuits: Hospitals are suing HHS over past underpayments, with billions of dollars at stake. The outcome of these lawsuits could reshape hospital reimbursement policies, but legal battles create uncertainty and potential financial instability for affected providers.
Financial Strain on Rural and Safety-Net Hospitals: Safety-net and rural hospitals, which depend heavily on DSH payments, may face significant financial distress if the lawsuits fail or if payment changes are not reversed. This could lead to budget cuts, service reductions, or even hospital closures.