COVID-19 Relief Bill Addresses Challenges For Medicaid Disproportionate Share Hospitals

Challenges for Medicaid disproportionate share hospitals ease during COVID-19 relief efforts due to new funding from Congress.

Due to the Coronavirus outbreak, there has been some relief for disproportionate share hospitals (DSH).  This is good news during a very challenging time, compared to the decrease in reimbursements to DSH facilities reported at the start of the year.

A report from the Congressional Research Service (CRS) sums up the situation known so well by leadership at facilities designated disproportionate share hospitals: “The Medicaid statute requires states to make disproportionate share hospital (DSH) payments to hospitals treating large numbers of low-income patients. This provision is intended to recognize the disadvantaged financial situation of those hospitals because low-income patients are more likely to be uninsured or Medicaid enrollees. Hospitals often do not receive payment for services rendered to uninsured patients, and Medicaid provider payment rates are generally lower than the rates paid by Medicare and private insurance.”

And we are now seeing more relief for these DSH hospitals due to the Coronavirus Bill and consequent funding being dispersed. Generally, CMS reported in March that it will temporarily waive or modify certain Medicare, Medicaid, and CHIP requirements. CMS will also issue several blanket waivers listed on the website below, and the CMS Regional Offices will review other provider-specific requests. These waivers provide continued access to care for beneficiaries. For more information on the waivers CMS has granted, visit: CMS has also prepared a 26 page factsheet for healthcare providers (PDF).

Meanwhile Becker’s Hospital Review has reported specific details from the $2 trillion COVID-19 relief package — the largest economic stimulus bill in U.S. history — 880-page legislation. Major take-aways include:

  1. The legislation creates a $100 billion emergency fund to reimburse healthcare providers for expenses or lost revenues related to the COVID-19 pandemic.
  2. The stimulus package would eliminate $8 billion in Medicaid Disproportionate Share Hospital payment cuts.
  3. The AHA — American Hospital Association — said it supports the legislation, calling it “an important first step.”

Richard Pollack, President and CEO of the AHA, noted in a release that “This bill includes important provisions that will help us respond, including the creation of an emergency fund grant program, additional support for taking care of COVID-19 patients and relief from spending cuts, among other provisions. This support will help those hospitals from rural and urban communities that are in dire financial need due to this devastating pandemic.”

It is good to see rural hospitals, many classified as DSH, being taken care of because they provide so much care for the low income demographic. Attorneys for law firm Holland & Knight, writing at JDSUPRA, report that “Notably, the bill extends funding for several healthcare programs (currently set to expire on May 22, 2020), including Medicaid Disproportionate Share Hospital (DSH), National Health Service Corps, Community Health Centers, and Teaching Health Centers that operate Graduate Medical Education (GME) programs through Nov. 30, 2020.”

Of course things can change — and they have changed quite a bit since our last article on DSH hospitals we released a couple of months ago, reporting reimbursement cuts to DSH facilities. It is also noted that Section 3813 of the bill, on Delay of Disproportionate Share Hospital (DSH) reductions through Nov. 30, 2020, will have cuts beginning on Dec. 1, 2020 — if Congress does not intervene. We will have to keep watch to see how Congress reacts to the situation later in the year.