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Health, Science, Environment

Hospitals get reprieve from cuts in some Medicaid reimbursements

This article first appeared in the St. Louis Beacon, April 12, 2013 - Missouri hospitals are expected to avoid about $27 million in cuts in federal reimbursements.

The Obama administration's next budget eliminates about $500 million nationally in what’s known as disproportionate share payments, or DSH, to hospitals under Medicaid. These payments are made to certain urban and rural hospitals that treat large percentages of poor patients lacking health insurance. Ozark Medical Center in West Plains, Mo., was among rural hospitals concerned about the cuts. It was set to lose more than $600,000 in DSH payments, starting in the next federal fiscal year, beginning on Oct. 1.

The administration had assumed that hospitals would treat fewer uninsured patients because the patients would be covered by an expanded Medicaid program under the Affordable Care Act. But only half the states have agreed to expand Medicaid. More than a dozen have decided against expansion, and the rest, including Missouri, are still debating whether to expand.

The Missouri Hospital Association, the Missouri Primary Care Association, and Gov. Jay Nixon have been urging the legislature to vote to expand Medicaid in Missouri.

Dave Dillon, spokesperson for the hospital group, says the group welcomes the administration’s decision, but he added that the DSH issue represented “a small blip on the screen” of the cuts to Missouri hospitals under ACA.

He estimates that cuts in other programs will cost Missouri hospitals nearly $4 billion over several years. The big cuts, he says, are in programs such as Medicare.

The administration’s move only affects cuts for the next fiscal year when hospitals were expected to lose 5.1 percent of their DSH payments. That translates into about $27 million for Missouri hospitals, he says. In the 2015 fiscal year, hospitals will lose another 5.9 percent of DSH payments. By fiscal year 2017, hospitals are to lose lose 17.1 percent. By 2019, cuts in DSH payments are projected to rise to 50.9 percent.

Dillon said that “increasing the 2014 DSH by $27 million doesn’t come anywhere close to all of the other cuts that are being made for hospitals under the ACA.”

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