Hospitals in California, New York and Texas would see dramatic cuts in their federal disproportionate share hospital allocations under proposals floated by President Barack Obama to decrease public funding as insurance enrollment grows, a new analysis shows.
Between 2013 and 2019, California and New York hospitals would lose more than $13 billion in DSH funding using estimated 2013 funding rates, and Texas would lose $9.4 billion. California and New York would each see cuts of about 13%, while Texas would lose 8.9%. No other state would lose more than 5%, and the average cut among the 50 states would be about 2%, according to an analysis provided by the Texas Hospital Association.
Obama has proposed reducing Medicare and Medicaid payments by $313 billion, including a 75% reduction in DSH payments between 2013 and 2019. That equals about $106 billion in DSH cuts, which the president said would be conducted through a new mandatory mechanism to better target payments to hospitals for unreimbursed care remaining after coverage increases.