Hospitals plead with Congress to avert $8 billion in cuts in Medicaid funding

By Ashley Murray / September 18, 2023

WASHINGTON — Health care representatives from across the United States are urging Congress to halt cuts to funding that helps hospitals care for uninsured or low-income patients who rely on Medicaid.

More than 250 hospitals and health systems appealed to House and Senate leadership in a letter Thursday asking the lawmakers to avert or delay a forthcoming $8 billion cut to “America’s health care safety net.”

The reduction to the Medicaid disproportionate share hospital funding is scheduled for Oct. 1, as mandated under the Patient Protection and Affordable Care Act.

The deadline comes as Congress faces partisan roadblocks to fund the government and renew a number of expiring federal programs by the end of the fiscal year, or Sept. 30.

“Not only does Medicaid DSH ensure access to care for millions of people, it enables our hospitals to provide essential services to their communities, including top-level trauma, burn, and neonatal intensive care. The need for DSH funding is even greater now, as hospital expenses per patient have increased significantly since the pandemic,” read the letter sent by the advocacy organization America’s Essential Hospitals.

The fund compensates hospitals that treat a disproportionate number of uninsured patients or low-income patients whose government-provided Medicaid coverage pays a lower rate than private insurance or Medicare.

The ACA provision, written under the premise that rates of uninsured people would continue to decrease, requires $8 billion per year in cuts from 2024 to 2027.

Higher rates of insurance coverage “have not materialized,” Dr. Bruce Siegel, president and CEO of America’s Essential Hospitals, wrote in a statement accompanying the letter.

The offices of GOP House Speaker Kevin McCarthy and Democratic House Minority Leader Hakeem Jeffries did not respond to a request for comment on the letter.

The impending cuts have also been a concern for senators on both sides of the aisle. Over the last decade, Congress has stopped reductions to the fund that were required under the ACA.

In a bipartisan letter from August to Majority Leader Chuck Schumer and Minority Leader Mitch McConnell, 20 senators wrote that “(c)uts of this magnitude could undermine the financial viability of hospitals, threatening access to care for the most vulnerable Americans.”

“It is essential that we continue to protect those who have come to rely on the services provided by Medicaid DSH hospitals. We ask you to act as soon as possible to address the Medicaid DSH cuts to ensure our nation’s hospitals can continue to care for every community,” the senators wrote in the Aug. 3 letter co-led by Bob Casey, a Pennsylvania Democrat, and James Lankford, a Republican from Oklahoma.

Neither Schumer’s nor McConnell’s office responded to requests for comment on either letter.

New health coverage data

According to Census Bureau data released Thursday, uninsured rates dropped in 27 states in 2022 compared to 2021, with some changes attributed to increases in public insurance.

“For seven of the states with lower uninsured rates in 2022, the difference was driven by increased private coverage. For 10 states, the uninsured rate decrease was related to increased public coverage. In three particular states —Missouri, New York, and Virginia — the decline in the uninsured rate was a result of increases in public coverage that outweighed decreases in private coverage,” David Waddington, chief of the Social, Economic, and Housing Statistics Division at the Census Bureau, said in a press release.

Maine was the only state where the uninsured rate increased, up to 6.6% in 2022, from 5.7% in 2021.