Disproportionate Share Hospital Payments Research Articles

Association of Total Knee Replacement Removal From the Inpatient-Only List With Outpatient Surgery Utilization and Outcomes in Medicare Patients

Little is known about the association of total knee replacement (TKR) removal from the Medicare inpatient-only (IPO) list in 2018 with outcomes in Medicare patients. To evaluate (1) patient factors associated with outpatient TKR use and (2) whether the IPO policy was associated with changes in postoperative outcomes for patients undergoing TKR. This cohort study included data from administrative claims from the New York Statewide Planning and Research Cooperative System. Included patients were Medicare fee-for-service beneficiaries undergoing TKRs or total hip replacements (THRs) in New York State from 2016 to 2019. Multivariable generalized linear mixed models were used to identify patient factors associated with outpatient TKR use, and with a difference-in-differences strategy to examine association of the IPO policy with post-TKR outcomes relative to post-THR outcomes in Medicare patients. Data analysis was performed from 2021 to 2022. IPO policy implementation in 2018. Use of outpatient or inpatient TKR; secondary outcomes included 30-day and 90-day readmissions, 30-day and 90-day postoperative emergency department visits, non-home discharge, and total cost of the surgical encounter. A total of 37 588 TKR procedures were performed on 18 819 patients from 2016 to 2019, with 1684 outpatient TKR procedures from 2018 to 2019 (mean [SD] age, 73.8 [5.9] years; 12 240 female [65.0%]; 823 Hispanic [4.4%], 982 non-Hispanic Black [5.2%], 15 714 non-Hispanic White [83.5%]). Older (eg, age 75 years vs 65 years: adjusted difference, -1.65%; 95% CI, -2.31% to -0.99%), Black (-1.44%; 95% CI, -2.81% to -0.07%), and female patients (-0.91%; 95% CI, -1.52% to -0.29%), as well as patients treated in safety-net hospitals (disproportionate share hospital payments quartile 4: -18.09%; 95% CI, -31.81% to -4.36%), were less likely to undergo outpatient TKR. After IPO policy implementation in the TKR cohort, there were lower adjusted 30-day readmissions (adjusted difference [AD], -2.11%; 95% CI, -2.73% to -1.48%; P < .001), 90-day readmissions ( -3.23%; 95% CI, -4.04% to -2.42%; P < .001), 30-day ED visits ( -2.45%; 95% CI, -3.17% to -1.72%; P < .001), 90-day ED visits (-4.01%; 95% CI, -4.91% to -3.11%; P < .001) and higher cost per encounter ($2988; 95% CI, $415 to $5561; P = .03). However, these changes did not differ from changes in the THR cohort except for increased TKR cost of $770 per encounter ($770; 95% CI, $83 to $1457; P = .03) relative to THR. In this cohort study of patients undergoing TKR and THR, we found that older, Black, and female patients and patients treated in safety-net hospitals may have had lesser access to outpatient TKRs highlighting concerns of disparities. IPO policy was not associated with changes in overall health care use or outcomes after TKR, except for an increase of $770 per TKR encounter.

Variation And Changes In The Targeting Of Medicaid Disproportionate Share Hospital Payments.

Little is known about how Medicaid disproportionate share hospital payments, which are intended to support hospitals that serve low-income patients, are allocated or whether allocation patterns have changed over time. We employed alternative definitions of targeting, or the degree to which allocations were made in a manner consistent with the statutory goals and intent of the program, to examine disproportionate share hospital payment allocations in forty-nine participating states. The most recent data indicate that 57.2percent of acute care hospitals received disproportionate share hospital payments, totaling more than $14.5billion, in 2015. The majority of payments went to hospitals with Medicaid shares above the state-specific median (89.1percent), hospitals with uncompensated care shares above the state-specific median (60.6percent), or hospitals deemed as disproportionate share per statutory definitions (64.6percent). However, among all hospitals receiving these payments, up to 31.6percent of payments were allocated to hospitals that did not meet a given definition, and 3.2percent went to hospitals that met none of them. These findings suggest that although the majority of the payments were targeted to hospitals serving low-income patients, opportunities exist to better align allocation with statutory goals and intent or to revise applicable statute.

Structural Racial Disparities in the Allocation of Disproportionate Share Hospital Payments

This cross-sectional study examines the allocation of Medicare and Medicaid Disproportionate Share Hospital payments by race.

Association Between Cancer Center Accreditation and Compliance With Price Disclosure of Common Oncologic Surgical Procedures.

Cancer center accreditation status is predicated on several factors that measure high-value healthcare. However, price transparency, which is critical in healthcare decisions, is not a quality measure included for accreditation. We reported the rates of price disclosure of surgical procedures for 5 cancers (breast, lung, cutaneous melanoma, colon, and prostate) among hospitals ranked by the American College of Surgeon's Commission on Cancer (ACS-CoC). We identified nonfederal, adult, and noncritical access ACS-CoC accredited hospitals and used the commercial Turquoise Health database to perform a cross-sectional analysis of hospital price disclosures for 5 common oncologic procedures (mastectomy, lobectomy, wide local excision for cutaneous melanoma, partial colectomy, prostatectomy). Publicly available financial reporting data were used to compile facility-specific features, including bed size, teaching status, Centers for Medicare & Medicaid wage index, and patient revenues. Modified Poisson regression evaluated the association between price disclosure and ACS-CoC accreditation after adjusting for hospital financial performance. Of 1,075 total ACS-CoC accredited hospitals, 544 (50.6%) did not disclose prices for any of the surgical procedures and only 313 (29.1%) hospitals reported prices for all 5 procedures. Of the 5 oncologic procedures, prostatectomy and lobectomy had the lowest price disclosure rates. Disclosing and nondisclosing hospitals significantly differed in ACS-CoC accreditation, ownership type, and teaching status. Hospitals that disclosed prices were more likely to receive Medicaid disproportionate share hospital payments, have lower average charge to cost ratios (4.53 vs 5.15; P<.001), and have lower net hospital margins (-2.03 vs 0.44; P=.005). After adjustment, a 1-point increase in markup was associated with a 4.8% (95% CI, 2.2%-7.4%; P<.001) higher likelihood of nondisclosure. More than half of the hospitals did not disclose prices for any of the 5 most common oncologic procedures despite ACS-CoC accreditation. It remains difficult to obtain price transparency for common oncologic procedures even at centers of excellence, signaling a discordance between quality measures visible to patients.

The medicaid windfall: Medicaid expansions and the target efficiency of hospital safety-net subsidies

Federal hospital safety-net subsidy programs seek to defray costs of uncompensated hospital care, but eligibility criteria are based on Medicaid volume. Therefore, subsidies have poor “target efficiency”: hospitals that provide large amounts of uncompensated care may not receive subsidies (exclusion error), while hospitals that provide little uncompensated care may receive subsidies (inclusion error). Medicaid expansions may exacerbate poor targeting by increasing Medicaid patient volume while reducing uncompensated care. Using hospital administrative data from 2003 to 2019, I quantify the target efficiency of Medicare and Medicaid Disproportionate Share Hospital payments and the 340B drug discount program and quantify how changes in Medicaid eligibility affect safety-net subsidy receipt and target efficiency. I find that the ACA Medicaid expansion increased participation in Medicare DSH and 340B, especially among non-safety-net hospitals (inclusion errors) resulting in a shift of approximately $5B from safety-net to non-safety-net hospitals. I find the opposite for a Medicaid contraction in Tennessee in 2005. My results demonstrate an unintended consequence of Medicaid-based eligibility criteria: changes in Medicaid coverage affect the allocation of public subsidies for safety-net patients.

Identifying high-value care for Medicare beneficiaries: a cross-sectional study of acute care hospitals in the USA

ObjectivesHigh-value care is providing high quality care at low cost; we sought to define hospital value and identify the characteristics of hospitals which provide high-value care.DesignRetrospective observational study.SettingAcute care hospitals...

CORR Insights®: How Should We Measure Social Deprivation in Orthopaedic Patients?

CORR Insights®: How Should We Measure Social Deprivation in Orthopaedic Patients?

How Total Performance Scores of Medicare Value-Based Purchasing Program Hospitals Change Over Time.

The Medicare Value-Based Purchasing (VBP) program established performance-based financial incentives for hospitals. We hypothesized that total performance scores (TPS) would vary by hospital type. Value-Based Purchasing reports were collected from 2015 to 2017 and merged with the Centers for Medicare and Medicaid Services (CMS) Impact File data. A total of 3,005 hospitals were grouped into physician-owned surgical hospitals (POSH), accountable care organizations (ACO), Kaiser, Vizient, and General hospitals. Longitudinal linear mixed-effects models compared temporal differences of TPS and secondary composite outcome, process, patient satisfaction, safety, and cost efficiency measures between hospital types. Total performance scores decreased across all hospital types (p < .001). Physician-owned surgical hospitals had the highest TPS (59.9), followed by Kaiser (49.2), ACO (36.7), General (34.8), and Vizient (30.7) (p < .001). Hospital types differed significantly in size, geography, mean case-mix index, Medicare patient discharges, percent Medicare days to inpatient days, Disproportionate Share Hospital payments, and uncompensated care per claim. Scores improved in 84% of POSH and 14.6% of Kaiser hospitals using score reallocations. In comparison with General hospitals, the TPS was higher for POSH and Kaiser and lower for Vizient in part due to weighting reallocation and individual domain scores. Centers for Medicare and Medicaid Services scoring system changes have not addressed the methodological biases favoring certain hospital types.

Potential Winners and Losers: Understanding How the Oncology Care Model May Differentially Affect Hospitals.

With the introduction of the Oncology Care Model and plans for the transition to Oncology Care First, alternative payment models (APMs) are an increasingly important piece of the oncology care landscape. Evidence is mixed on the Oncology Care Model's impact on utilization and costs, but as policymakers consider expansion of similar models, it is critical to understand the characteristics of hospitals that may be differentially affected. We used 2007-2016 SEER-Medicare data to identify patients with breast and prostate cancer receiving chemotherapy, endocrine therapy (breast), or androgen deprivation therapy (prostate). For each hospital, we calculated 6-month expected mortality, emergency department (ED) visits, inpatient admissions, and costs, all commonly collected APM outcomes. After calculating observed-to-expected rates for each outcome by hospital, we estimated the association between observed-to-expected rates and characteristics of each hospital to understand hospital characteristics that might be associated with higher- or lower-than-expected rates of each outcome. Hospitals with > 15% rural patients had significantly higher-than-expected mortality (0.31 points higher, P < .001) and ED visit rates (0.10 points higher, P = .029) as well as significantly lower costs (0.06 points lower, P = .004). Hospitals unaffiliated with a medical school also experienced significantly higher-than-expected mortality and ED visits. Hospitals eligible for disproportionate share hospital payment experienced significantly higher ED visits but lower costs. For-profit hospitals experienced higher-than-expected mortality. Rural hospitals and those unaffiliated with a medical school may require special consideration as APMs expand in oncology care. Designated cancer centers and larger hospitals may be advantaged.

Review of “Medicare's Hospital Acquired Condition Reduction Program Disproportionately Affects Minority-Serving Hospitals: Variation by Race, Socioeconomic Status, and Disproportionate Share Hospital Payment Receipt” by Zogg CK, et al. Ann Surg 2020;271(6):985–993

Review of “Medicare's Hospital Acquired Condition Reduction Program Disproportionately Affects Minority-Serving Hospitals: Variation by Race, Socioeconomic Status, and Disproportionate Share Hospital Payment Receipt” by Zogg CK, et al. Ann Surg 2020;271(6):985–993

Texas Ruling Brings More ACA Uncertainty.

Texas ruling and other legal challenges raise questions about the ACA's future even as enrollment holds steady.

Medicare's Hospital Acquired Condition Reduction Program Disproportionately Affects Minority-serving Hospitals: Variation by Race, Socioeconomic Status, and Disproportionate Share Hospital Payment Receipt.

To assess whether a hospital's percentage of Black patients associates with variations in FY2017 overall/domain-specific Hospital Acquired-Condition Reduction Program (HACRP) scores and penalty receipt. Differences in socioeconomic status and receipt of disproportionate share hospital payments (a marker of safety-net status) were also assessed. In FY2015, Medicare began reducing payments to hospitals with high adverse event rates. Concern has been expressed that HACRP penalties could adversely affect minority-serving hospitals, leading to reductions in resources and exasperation of disparities among hospitals with the greatest need. 100% Medicare FFS claims from 2013 to 2014 identified older adult inpatients, aged ≥65 years, presenting for 8 common surgical conditions. Multilevel mixed-effects regression determined differences in FY2017 HACRP scores/penalties among hospitals managing the highest decile of minority patients. A total of 695,775 patients from 2923 hospitals were included. As a hospital's percentage of Black patients increased, climbing from 0.6% to 32.5% (lowest vs highest decile), average HACRP scores also increased, rising from 5.33 to 6.36 (higher values indicate worse scores). Increases in HACRP penalties did not follow the same stepwise increase, instead exhibiting a marked jump within the highest decile of racial minority-serving extent (45.7% vs 36.7%; OR [95% CI]: 1.45[1.42-1.47]). Similar patterns were observed for high disproportionate share hospital (OR [95% CI]: 1.44 [1.42-1.47]; absolute difference: +7.4 percentage-points) and low socioeconomic status-serving (1.38[1.35-1.40]; +7.3% percentage-points) hospitals. Restricted analyses accounting for the influence of teaching status and severity of patient case-mix both accentuated disparities in HACRP penalties when limiting hospitals to those at the highest known penalty-risk (more residents-to-beds, more severe), absolute differences +13.9, +20.5 percentage-points. Restriction to high operative volume, in contrast, reduced the penalty difference, +6.6 percentage-points. Minority-serving hospitals are being disproportionately penalized by the HACRP. As the program continues to develop, efforts are needed to identify and protect patients in vulnerable institutions to ensure that disparities do not increase.

Refining the Definition of US Safety-Net Hospitals to Improve Population Health

Safety-net hospitals (SNHs) in the United States provide care for individuals and families regardless of their ability to pay.1 Since 1986, SNHs have received supplemental federal compensation through Medicare Disproportionate Share Hospital (DSH) payments. These payments have historically been calculated based on the proportion of hospital days accounted for by Medicare Supplemental Security Income plus Medicaid, non-Medicare inpatient days. The Affordable Care Act (ACA) modified this definition and reduced DSH payments to offset a growing insured, low-income population.2

Comparison of 3 Safety-Net Hospital Definitions and Association With Hospital Characteristics

No consensus exists on how to define safety-net hospitals (SNHs) for research or policy decision-making. Identifying which types of hospitals are classified as SNHs under different definitions is key to assessing policies that affect SNH funding. To examine characteristics of SNHs as classified under 3 common definitions. This cross-sectional analysis includes noncritical-access hospitals in the Healthcare Cost and Utilization Project State Inpatient Databases from 47 US states for fiscal year 2015, linked to the Centers for Medicare & Medicaid Services Hospital Cost Reports and to the American Hospital Association Annual Survey. Data were analyzed from March 1 through September 30, 2018. Hospital characteristics including organizational characteristics, scope of services provided, and financial attributes. Definitions of SNH based on Medicaid and Medicare Supplemental Security Income inpatient days historically used to determine Medicare Disproportionate Share Hospital (DSH) payments; Medicaid and uninsured caseload; and uncompensated care costs. For each measure, SNHs were defined as those within the top quartile for each state. The 2066 hospitals in this study were distributed across the Northeast (340 [16.5%]), Midwest (587 [28.4%]), South (790 [38.2%]), and West (349 [16.9%]). Concordance between definitions was low; 269 hospitals (13.0%) or fewer were identified as SNHs under any 2 definitions. Uncompensated care captured smaller (200 of 523 [38.2%]) and more rural (65 of 523 [12.4%]) SNHs, whereas DSH index and Medicaid and uncompensated caseload identified SNHs that were larger (264 of 518 [51.0%] and 158 of 487 [32.4%], respectively) and teaching facilities (337 of 518 [65.1%] and 229 of 487 [47.0%], respectively) that provided more essential services than non-SNHs. Uncompensated care also distinguished remarkable financial differences between SNHs and non-SNHs. Under the uncompensated care definition, median (interquartile range [IQR]) bad debt ($27.1 [$15.5-$44.3] vs $12.8 [$6.7-$21.6] per $1000 of operating expenses; P < .001) and charity care ($19.9 [$9.3-$34.1] vs $9.1 [$4.0-$18.7] per $1000 of operating expenses) were twice as high and median (IQR) unreimbursed costs ($32.6 [$12.4-$55.4] vs $23.6 [$9.0-$42.7] per $1000 of operating expenses; P < .001) were 38% higher for SNHs than for non-SNHs. Safety-net hospitals defined by uncompensated care burden had lower median (IQR) total (4.7% [0%-9.9%] vs 5.8% [1.2%-11.2%]; P = .003) and operating (0.3% [-8.0% to 7.2%] vs 2.3% [-3.9% to 8.9%]; P < .001) margins than their non-SNH counterparts, whereas differences between SNH and non-SNH profit margins generally were not statistically significant under the other 2 definitions. Different SNH definitions identify hospitals with different characteristics and financial conditions. The new DSH formula, which accounts for uncompensated care, may lead to redistributed payments across hospitals. Our results may inform which types of hospitals will experience funding changes as DSH payment policies evolve.

Medicaid Innovations and the Role of Academic Health Centers.

Although they represent less than 8% of all U.S. hospitals, academic health centers (AHCs) deliver almost 40% of the inpatient care for Medicaid beneficiaries. However, because of low Medicaid reimbursement rates, AHCs have had to rely on supplemental funding sources, such as disproportionate share hospital (DSH) payments and upper payment limit (UPL) payments. Recent legislative efforts and changes to payment structures have made these sources vulnerable to severe reductions. For instance, DSH payments are scheduled to be cut by $8 billion by 2021, and UPL payments are a diminishing resource for many states because the program is based on a fee-for-service model and most states are moving to managed care.In this Invited Commentary, the authors argue that cuts to supplemental funding sources would harm AHCs. They advocate instead for restructuring traditional supplemental payments to accommodate novel reimbursement models. They cite Medicaid's Delivery System Reform Incentive Payment program as an example of work to leverage supplemental payments to transform the delivery of care for Medicaid beneficiaries. AHCs should be at the epicenter of such innovations in population health for Medicaid beneficiaries. To that end, the authors encourage AHCs to build new partnerships with community-based primary care physicians and community health centers to balance the specialty composition of their faculty providers to assume the risk for Medicaid beneficiaries and other vulnerable populations.

The U.S. Medicare Disproportionate Share Hospital program and capacity planning

U.S. Medicare's Disproportionate Share Hospital (DSH) program provides financial assistance to hospitals that serve low-income populations. Statutory formulas determine the DSH payments made to hospitals; however, the formulas applied to “large” urban hospitals (at least 100 beds) are more generous than those used for “small” urban hospitals (less than 100 beds). The purpose of this study is to determine if the DSH program's 100-bed threshold influences bed capacity planning. We find that the threshold drives a significant discontinuity in the distribution of urban hospital bed capacities, with hospitals tending to maintain just enough beds to qualify for higher DSH payments. The magnitude of the discontinuity is greatest in hospitals with strong incentives to manage bed capacity; and, compared to government and not-for-profit hospitals, for-profit hospitals are more likely to manage capacity to meet the 100-bed threshold. Our findings highlight the potential for regulatory institutions to have unintended influence on capacity planning decisions.

Improved Rates of Immediate Breast Reconstruction at Safety Net Hospitals

Substantial federal resources have been directed toward ensuring the delivery of high-quality care at safety net hospitals. Although disparities in receipt of breast reconstruction persist at the patient level, the extent to which hospital factors contribute to these differences remains unclear. The rates of immediate breast reconstruction across safety net and non-safety net hospitals were investigated. Women 21 years and older with breast cancer or increased risk of breast cancer undergoing immediate post-mastectomy reconstruction were identified in the Nationwide Inpatient Sample database. Safety net hospitals were defined as hospitals with the highest tertile of Medicaid disproportionate share hospital payment adjustments. Adjusted odds ratios of undergoing reconstruction were calculated. Thirty-one percent of patients (n = 10,910) at safety net hospitals underwent immediate reconstruction compared with 46 percent of patients (n = 14,619) at non-safety net hospitals (p < 0.001). Logistic regression revealed that women at non-safety net hospitals were significantly more likely to undergo reconstruction (OR, 1.89; 95 percent CI, 1.65 to 2.16). However, analysis by study year revealed that rates of reconstruction at safety net hospitals increased over time. After accounting for sociodemographic factors, women undergoing mastectomies at safety net hospitals remain less likely to undergo immediate breast reconstruction. However, the differences in rates of reconstruction between safety net and non-safety net hospitals have narrowed over time. The availability of immediate reconstruction lessens the psychological trauma of mastectomy, and it is critical to continue redirecting federal efforts toward this valuable component of breast cancer care. Risk, II.

Excess Deaths Among the Uninsured Before the Affordable Care Act (ACA), and Potential Post-ACA Reductions.

Despite implementation of the Affordable Care Act (ACA), as of 2015, about 25.8 million working-age Americans remained uninsured and vulnerable to premature death because of poor health care access. The ACA-mandated phasing out of disproportionate share hospital payments that supported charity care may aggravate care access for the residual uninsured. To estimate excess deaths among the uninsured and the potential ACA impact on the basis of a recent cohort's mortality experience. We hypothesized a higher uninsured mortality risk than the available pre-2000 estimate because of worsening of care disparities owing to technology-driven advances in life-saving care. We conducted a retrospective cohort study of the 1999 to 2002 National Health and Nutrition Examination Survey respondents observed through 2011. We estimated (a) weighted Cox proportional mortality hazard of uninsured working-age adults adjusted for demographics, comorbidity, and lifestyle behaviors, (b) weighted mortality rates among the uninsured and insured within age and comorbidity strata, and (c) excess deaths because of uninsurance using the Institute of Medicine methodology. Noninstitutionalized US population. Adults aged 20 to 64 years. Mortality. Of 7274 study-eligible respondents, 20.6% were uninsured and 478 died during follow-up, for an adjusted uninsured mortality hazard ratio of 1.57 (95% confidence interval, 1.12-2.21) versus privately insured, translating to 48 529 excess deaths among the population aged 25 to 64 years in 2011 (7.8% of total deaths in this age group). The estimated proportion of excess deaths was 52% higher than the pre-2000 cohort study. The mortality disparity increased with age and comorbidity. Findings support our hypotheses, and indicate that post-ACA, a residual 4.7% excess mortality among working-age adults will continue, about 30 428 excess deaths annually. Restoration of disproportionate share hospital supports and continued advocacy for universal health care coverage are needed to reduce avoidable deaths.

Financial Loss for Inpatient Care of Medicaid-Insured Children

Medicaid payments tend to be less than the cost of care. Federal Disproportionate Share Hospital (DSH) payments help hospitals recover such uncompensated costs of Medicaid-insured and uninsured patients. The Patient Protection and Affordable Care Act reduces DSH payments in anticipation of fewer uninsured patients and therefore decreased uncompensated care. However, unlike adults, few hospitalized children are uninsured, while many have Medicaid coverage. Therefore, DSH payment reductions may expose extensive Medicaid financial losses for hospitals serving large absolute numbers of children. To identify types of hospitals with the highest Medicaid losses from pediatric inpatient care and to estimate the proportion of losses recovered through DSH payments. This retrospective cross-sectional analysis evaluated Medicaid-insured hospital discharges of patients 20 years and younger from 23 states in the 2009 Kids' Inpatient Database. The dates of the analysis were March to September 2015. Hospitals were categorized as freestanding children's hospitals (FSCHs), children's hospitals within general hospitals, non-children's hospital teaching hospitals, and non-children's hospital nonteaching hospitals. Financial records of FSCHs in the data set were used to estimate the proportion of Medicaid losses recovered through DSH payments. Hospital financial losses from inpatient care of Medicaid-insured children (defined as the reimbursement minus the cost of care) were compared across hospital types. For our subsample of FSCHs, Medicaid-insured inpatient financial losses were calculated with and without each hospital's DSH payment. The 2009 Kids' Inpatient Database study population included 1485 hospitals and 843 725 Medicaid-insured discharges. Freestanding children's hospitals had a higher median number of Medicaid-insured discharges (4082; interquartile range [IQR], 3524-5213) vs non-children's hospital teaching hospitals (674; IQR, 258-1414) and non-children's hospital nonteaching hospitals (161; IQR, 41-420). Freestanding children's hospitals had the largest median Medicaid losses from pediatric inpatient care (-$9 722 367; IQR, -$16 248 369 to -$2 137 902). Smaller losses were experienced by non-children's hospital teaching hospitals (-$204 100; IQR, -$1 014 100 to $14 700]) and non-children's hospital nonteaching hospitals (-$28 310; IQR, -$152 370 to $9040]). Disproportionate Share Hospital payments to FSCHs reduced their Medicaid losses by almost half. Estimated financial losses from pediatric inpatients covered by Medicaid were much larger for FSCHs than for other hospital types. For children's hospitals, small anticipated increases in insured children are unlikely to offset the reductions in DSH payments.

Linking Medicaid Expansion and Cuts to Disproportionate-Share Hospitals: Will Safety Nets Survive?

The predominant mechanism by which the health care reforms of the Patient Protection and Affordable Care Act of 2010 are to be financed is through the government's simultaneous defunding of major portions of Medicare and Medicaid, including the reduction of up to 75% of federal payments to disproportionate-share hospitals. The justification for curtailment of other public programs is that after Medicaid expansion under the Affordable Care Act, the decrease in the proportion of uninsured among the U.S. population will render disproportionate-share hospital payments extraneous and unnecessary. Such justification was reiterated in the recent American College of Obstetricians and Gynecologists Committee Opinion No. 627, entitled Health Care for Unauthorized Immigrants. Herein, the soundness of the Committee Opinion's proposed policy is evaluated by reviewing available literature on the potential effect of Medicaid disproportionate-share hospital cuts with and without concomitant Medicaid expansion. Limitations of Medicaid expansion efforts before and under the Affordable Care Act, the disproportionate-share hospital payment program, and other legislation providing safety net hospitals with (some) relief of financial burdens related to uncompensated care are explicated. Findings raise concern that acceptance of cuts of up to 75% of federal disproportionate-share hospital funds on the premise that nationwide state expansion of Medicaid will offset the difference may be overly optimistic. Indeed, foregoing disproportionate-share hospital payments undercuts the otherwise laudable intent of Committee Opinion No. 627, namely to advocate for universal health care for all women, including undocumented immigrants.