A House health panel on Tuesday dove into a debate over whether Congress should use an upcoming deadline to overhaul the Medicaid disproportionate-share hospital funding formula.
In a House Energy and Commerce health subcommittee hearing, lawmakers discussed a proposed full repeal of the so-called Medicaid DSH cuts, which were mandated by the Affordable Care Act, as well as other health funding measures.
This total repeal of the cuts was proposed by Rep. Eliot Engel (D-N.Y.), whose state gets the highest annual DSH allotment in the country.
But a slew of mostly GOP lawmakers, including the panel's ranking member, Rep. Michael Burgess (R-Texas), pushed for overhauling the funding formula itself, which determines how much federal DSH money each state receives.
The allocations for the roughly $12 billion in annual federal payments has been mostly unchanged since the early 1990s. Momentum for a program update started late last year when Sen. Marco Rubio (R-Fla.), whose state gets a very low DSH payment, introduced draft legislation to base the Medicaid DSH payments on a state's share of the nation's poor.
Burgess echoed the sentiments of Rubio and other advocates for reform, that Congress has a rare opportunity this year to update the program. On Oct. 1, the government is slated to cut $4 billion from Medicaid DSH payments—a major decrease that hospitals and lawmakers alike are eager to avert. The entire DSH federal allotment is about $12 billion, and states also have to pay their share of the payment to hospitals.
Urging bipartisanship, Rep. Gus Bilirakis (R-Fla.) argued that both Democratic and Republican lawmakers should want to change the formula to better reflect states' needs, given that Democrats also represent states that don't fare well under the status quo.
"This is the time to get it done," Bilirakis said.
The push for a formula change was mostly led by Republicans at Tuesday's hearing, although Rep. Kurt Schrader (D-Ore.) also said he'd like to see an update. But he included the caveat that Medicid expansion states shouldn't be penalized if Congress decided on an overhaul.
"If we redo this formula we should take into account the states that stepped up and provided healthcare for the low-income people," Schrader said. "There should be no penalty to them."
The public call for reform in Congress generally has come from the GOP. Even Senate Finance Committee Chair Chuck Grassley (R-Iowa) has said he wants to take a look at the formula rather than simply delaying the cuts again.
It's unclear whether Democratic leadership would agree. House Speaker Nancy Pelosi (D-Calif.) told hospitals at the American Hospital Association's annual meeting this spring that she would support a DSH cut delay, but didn't indicate she would support a formula update.
"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?"
Although Congress included the cuts in the ACA on the assumption that Medicaid expansion would lessen states' need for the payments, states that have expanded Medicaid haven't showed any signs they'd be willing to give up any of their allotment.
