MACPAC proposes phasing in Medicaid DSH cuts, restructuring allotments

The Medicaid and CHIP Payment and Access Commission today recommended that Congress phase in the Affordable Care Act’s Medicaid Disproportionate Share Hospital reductions over a longer period and restructure the DSH allotment methodology based on the number of low-income individuals in a state. The commission also recommended that Congress require the Department of Health and Human Services to apply the reductions to unspent DSH allotments first. During the discussion, many commissioners expressed concern about the magnitude of the ACA DSH cuts and the effects on hospitals.
 
In a letter yesterday to the commission, AHA said it continues to urge Congress to delay the ACA’s Medicaid DSH reductions until more substantial coverage gains are realized. “While we appreciate MACPAC’s efforts to mitigate the impact of the DSH cuts beginning in fiscal year 2020 for hospitals and state Medicaid programs, we continue to believe eliminating the impending cuts is the better course of action,” AHA wrote. The association opposed the proposal to restructure the DSH allotment methodology based on the number of low-income individuals in a state, saying that a change of this magnitude “should not be made within the context of implementing the ACA DSH reductions as it requires more thoughtful deliberation and further analysis regarding its redistributive aspects.”
 
In other voting, the commission recommended that HHS establish process controls to certify that annual hospital upper payment limit demonstration data are accurate and complete, and to use these data in the review of claimed expenditures. The Commission also recommended that the Centers for Medicare & Medicaid Services make hospital UPL demonstration data and methods publicly available in a standard format that enables analysis. The recommendations will be included in MACPAC’s March report to Congress.