• Talking Points
  • October 24, 2019

Prevent the Medicaid DSH Cuts

Without congressional action, devastating cuts to the Medicaid Disproportionate Share Hospital (DSH) payment program will go into effect later this year. Medicaid DSH payments are vital to children's hospitals and impact their ability to care for all children.

  • Medicaid DSH payments are critical to children's hospitals. Congress created the Medicaid DSH program to provide financial help to hospitals that treat a large number of Medicaid and uninsured patients. The program has and will continue to play an important role for children's hospitals in addressing Medicaid underpayment.
  • Medicaid is the single largest health insurer for children in the United States. Millions of children are provided coverage through Medicaid (37 million) and the Children's Health Insurance Program (CHIP) (9 million). Medicaid, along with CHIP, is the foundation of America's commitment to providing coverage and access to care for children.
  • Children's hospitals are major Medicaid providers. Although they account for less than 5 percent of hospitals, children's hospitals care for almost one half of children admitted to hospitals. The majority of patients in a children's hospital (59 percent of inpatient days on average) are covered by Medicaid.
  • Medicaid DSH payments are important for the viability of children's hospitals and their ability to care for all children. Medicaid DSH payments supplement inadequate Medicaid reimbursement to children's hospitals. Including DSH payments, Medicaid reimburses children's hospitals an average of only 80 percent of the costs of providing care. But Medicaid reimbursement to children's hospitals would fall even lower without needed DSH payments. DSH payments help children's hospitals sustain specialized pediatric care services and pediatric training programs that benefit all patients.
  • Children's hospitals' need for Medicaid DSH payments persists. Medicaid DSH payments to children's hospitals are needed until each state's Medicaid program payments cover the cost of care.

Children's hospitals ask Congress to prevent the Medicaid DSH cuts from going into effect.