House Members Urge Pelosi to Limit DSH Payment Cuts

In a letter that was organized by Reps. Reyes (D-TX), Lewis (D-GA) and Schakowsky (D-IL), 104 members of the House urged Speaker Pelosi to ensure that the final health reform bill does not lower Medicaid and Medicare Disproportionate Share Hospital (DSH) payments more than in the House-passed bill, which already is too much. “To retain our health care safety net’s stability, we believe that future DSH payments must continue to recognize financial losses sustained by these providers due to Medicaid reimbursement shortfalls and uncompensated care,” they wrote. The House bill would cut DSH payments by $20 billion over 10 years, while the Senate bill would cut $43 billion, approximately 25% of what otherwise would be paid. The rationale for lowering DSH payments is that more patients will be insured. But half or more of them will have incomes low enough to qualify for Medicaid, even at the Senate’s eligibility level of 133% of poverty (the House bill calls for 150%). And it’s because the costs of caring for low-income patients are so high that DSH now subsidizes hospitals that provide a lot of it. So the last thing anyone should want to do is cut DSH as more poor patients are brought into the system.

Who would be most hurt? The map below shows the amount of DSH paid by Medicare on behalf of poor patients in the various counties, expressed as DOLLARS per POOR POPULATION (individuals below the poverty level). Note: orange is the most, dark blue is next, pale blue is least. Areas with the densest concentrations of poverty, such as in the south, northeast and California, receive the most, and they will lose the most. The northwest and upper-Midwest win again. Of course, the Dartmouth Atlas tells us that these latter regions are “efficient” and deserve to be rewarded. That’s malarkey! Paying for health care reform on the backs of the poor is poor social policy.

Map by Matthew Cooper

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