This bill modifies how Medicaid compensates safety-net hospitals—those that serve large numbers of low-income and uninsured patients—through payments called Disproportionate Share Hospital (DSH) adjustments. The legislation expands which patients count toward these hospitals' eligibility for increased payments by including individuals who have insurance from other sources (like Medicare or private plans) but still rely on Medicaid coverage after those other benefits are exhausted. The bill also allows states to use any unused federal Medicaid funds from previous years (dating back to 2021) to increase payments to hospitals that treated low-income patients, provided they do so before completing their annual financial audit. These changes take effect immediately for new Medicaid payment years, while states have until their audit deadline to retroactively adjust previous years' payments. The legislation aims to increase federal support for struggling hospitals that disproportionately serve vulnerable populations.
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