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Rubio Introduces Bill to Modernize Medicaid DSH, Help Hospitals Providing Care to Low-Income Patients

Dec 18, 2018 | Comunicados de Prensa

Washington, D.C. – Today, U.S. Senator Marco Rubio (R-FL) introduced the State Accountability, Flexibility, and Equity (SAFE) for Hospitals Act, which would overhaul the Medicaid Disproportionate Share Hospital (DSH) program to create equity for all states by updating a metric used to determine how much each state is allotted, which has not been reformed since the early 1990’s. The SAFE Hospitals Act would resolve a longstanding disparity in Medicaid DSH allocations across the nation, including Florida, and prioritize funding for hospitals that provide the most care to Medicaid and low-income patients.
Over the course of 10-15 years, Florida hospitals could gain up to $600 million in annual DSH funding as a result of Rubio’s bill. A one-pager of the bill is available here.
“For far too long, Florida has not received its fair share of funding for hospitals that serve the most vulnerable patients,” Rubio said. “The Medicaid DSH program must be modernized, rather than relying on an outdated system that predominantly reflects state spending in 1992. My new bill would fix this disparity and update the system to create equity within the DSH program. I’m proud to introduce this proposal to reform Medicaid DSH, and it is my hope that this bill will become a framework for future reform.”
“The Florida Hospital Association commends Senator Rubio for his leadership in the effort to bring equity and fairness to the Federal Medicaid Disproportionate Share program. The SAFE Hospitals Act provides a more rational allocation of DSH funds and brings the DSH program closer to its original purpose. It prioritizes DSH payments for those hospitals that serve higher numbers of low income and uninsured patients,” Florida Hospital Association President Bruce Rueben said. 
“The Safety Net Hospital Alliance of Florida commends U.S. Sen. Marco Rubio for sponsoring the SAFE Hospitals Act, legislation that would provide Florida its fair share of federal funding for hospitals that serve a large number of Medicaid and uninsured patients. Now is the time to once and for all fix the federal formula for distributing Medicaid Disproportionate Share (DSH) payments to help hospitals cover the cost of uncompensated care. Under Rubio’s bill, the new formula would be based on the national standard poverty rate and use the latest census data, as opposed to the haphazard  state-by-state allocation that is still predominantly based on an antiquated formula created in the early 1990s. Sen. Rubio understands the importance of having a fair DSH formula for Florida and numerous other states that have received low DSH allocations for decades. The Safety Net hospitals are optimistic that Florida’s entire Congressional delegation will back the SAFE Hospitals Act to finally fix this problem so Florida gets our fair share. Florida’s Safety Net hospitals have long expressed frustration that Texas, another state that chose not to expand Medicaid, receives over 475 percent more funding for uninsured patients than Florida. Or that Connecticut receives the same DSH allotment as Florida but has less than one-fifth the population and, in 2016, served only 0.75 percent the U.S. population at or below 100 percent of the federal poverty level, compared to Florida’s 6.7 percent. I am hopeful that Congress will pass this legislation. It is a simple matter of fairness and should have bipartisan support,” Safety Net Hospital Alliance of Florida President Lindy Kennedy said of Rubio’s SAFE Hospitals Act.
What the SAFE Hospitals Act Does:

  • Gradually changes the DSH allocation formula so states’ allocations are based on the number of low-income earners living in the state, as a percentage, of the total U.S. population earning less than 100% of the Federal Poverty Level (FPL).
  • Prioritizes DSH funding to hospitals providing the most care to vulnerable patients, while providing states with the necessary flexibility to address the unique needs of hospitals in each state.
  • Expands the definition of uncompensated care to include costs incurred by hospitals to provide certain outpatient physician and clinical services, which is a change recommended by MACPAC.
  • Allows states to reserve some of their DSH funding allocations to be used in future years in order to give hospitals more certainty or consistency in the amount of DSH funding they can expect when planning for the future.