House Speaker Nancy Pelosi told hospital leaders on Tuesday that she supports delaying $4 billion in cuts to disproportionate-share hospitals but stopped short of endorsing GOP efforts to change the DSH formula.
At the American Hospital Association's annual meeting, the California Democrat said that changing the DSH formula would harm Medicaid expansion states.
"We cannot support efforts that will reward states for not expanding Medicaid or simply take DSH money from some other state and give it to others," she said. "Who thought that was a good idea?"
Her comments are the latest sign that a nascent effort among Senate Republicans to reform the allotment won't take off.
Sen. Marco Rubio (R-Fla.) has suggested that a state's DSH payment needs to be based on the national share of adults living below the federal poverty level. The current payment formula is based on caps that Congress set back in 1992 and totals fluctuate wildly from state to state.
Sen. Chuck Grassley (R-Iowa), chairman of the Senate Finance Committee, also has been pushing for changing the formula.
"A half-dozen states receive nearly half of all the DSH funds," Grassley wrote in an op-ed last week for STAT News. "For nearly 30 years, the underlying percentage of these payments has not changed, leaving in place an unfair, grossly outdated and easily abused system."
Grassley told Modern Healthcare last month that while he wants a change to the formula, that doesn't appear to be likely.
The Medicaid and CHIP Payment Advisory Commission also recommended changing the formula during its March report to Congress. The influential board of advisers said that DSH payments would be better targeted at hospitals that serve a high share of Medicaid-enrolled and low-income uninsured patients.
MACPAC also said in the report that the ACA cuts should be phased in more slowly so that hospitals aren't hit all at once if they don't get a delay.
While Pelosi did not support a change to the DSH formula, she did call for a more permanent solution to the DSH cuts. The reductions were supposed to go into effect in 2014 but have been delayed multiple times by lawmakers.
"We are working with you to come up with some remedies for the DSH challenges," she told the crowd. "You are good at remedies aren't you?"
Meanwhile, AHA and other hospital groups are pushing Congress for a two-year delay to the cuts.
It remains unclear what the permanent solution would be and there remains bipartisan support for another delay, although another delay could come with a price for hospitals.
Hospital lobbyists say that the Senate Finance Committee may make other cuts to hospital revenue streams to help make up at least half of the money for the cuts.
Rep. Michael Burgess (R-Texas) also gave a dire warning to attendees during a panel discussion at the meeting that the cuts were coming.
"Watch out for that cliff that is just ahead in the windshield," he said.
