CA Congressional Delegates Urge Delay of Medicaid DSH Cuts

On May 13, 2019, forty-eight California congressional delegates were among more than 300 House members who sent a letter urging House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy to delay nearly $500 million in Medicaid Disproportionate Share Hospital (DSH) program cuts to California’s safety net hospitals starting in October 2019. Further Medi-Cal DSH reductions of about $950 million annually are slated for fiscal years 2021-2025.

Federal Medicaid DSH funding provides more than $1.2 billion to California’s safety net hospitals, including community safety net, public and district hospitals that serve a disproportionate share of low-income and uninsured Californians. The Medicaid DSH cuts would result in about $156 million in Medi-Cal DSH reductions to California’s community safety net hospitals this year.

Medicaid DSH funding is critical to California’s safety net hospitals and helps offset low Medi-Cal payments and the cost of providing uncompensated care to their low-income communities. California’s community safety net hospitals provide an average of 88 percent of their care to low-income Medi-Cal, Medicare and uninsured patients, and depend on Medicaid DSH funds to invest in innovative partnerships and programs with partner clinics and community-based organizations to ensure their vulnerable communities receive more coordinated, higher value care in the right setting.