The Affordable Care Act required the CMS to cut Medicaid DSH funds by $43 billion between fiscal 2018 and 2025. The cuts build year over year, starting at $2 billion in fiscal 2018 and ending at $8 billion in fiscal 2025.
The House committee on Monday proposed eliminating the fiscal 2018 reductions. It will offset the cost of delaying the cuts by extending DSH reductions through FY2026 and FY2027.
Hospitals would face a $16 billion cut over those two fiscal years, according to the House plan.
Although hospitals said they were pleased with the short-term delay, they expressed concern at the eventual, large cuts that loom a decade away.
"A one-year delay paired with even deeper cuts in later years will make it harder to find a sustainable solution to uncompensated care and will prolong the uncertainty that threatens essential hospitals and the communities they serve," said Dr. Bruce Siegel, CEO of America's Essential Hospitals, which represents some 300 safety-net systems.
Siegel's organization and the American Hospital Association hope Congress will authorize a two-year delay of the DSH cuts, giving lawmakers time to find a permanent solution that will eliminate or soften the cuts.
More than 200 lawmakers from both parties also asked House Speaker Paul Ryan (R-Wis.) and Minority Leader Nancy Pelosi (D-Calif.) last week for at least a two-year pause on DSH cuts while they work toward a longer-term solution.
"This delay will ensure that hospitals can keep their doors open and, most importantly, continue to care for the most vulnerable among us," the lawmakers' letter stated.