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

Jun 11, 2021 | Press Releases

Washington, D.C. — U.S. Senator Marco Rubio (R-FL) reintroduced 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. The bill would update a metric used to determine how much each state is allotted, which has not been reformed since the early 1990s. It would also 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. Rubio first introduced the legislation in December 2018. U.S. Representative Gus Bilirakis (R-FL) reintroduced companion legislation in the House.
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 “The current metric used to determine funding is outdated and unfair to hospitals in Florida and across the country. 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.”
“I am proud reintroduce the House companion to the SAFE Hospitals Act because it will ensure that our safety net hospitals in Florida actually receive their fair share of federal healthcare funding,” Bilirakis said. “Our bill updates the current antiquated formula from the early 90s to reflect the true needs of each state. The bottom line is that this bill will enable states like Florida to obtain the funding needed to better serve our most vulnerable citizens.”
“Florida hospitals and health systems currently lose hundreds of millions of dollars in funding per year due to the outdated formula the federal government uses to distribute some of its funding under the Federal Medicaid Disproportionate Share program,” said Mary C. Mayhew, President and CEO of the Florida Hospital Association. “On behalf of the Florida Hospital Association’s more than 200 hospitals and health systems, I want to thank Senator Rubio for his efforts to bring equality to this program so Florida’s hospitals receive their fair share of this critical funding for some of our most vulnerable and uninsured.”
“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 hospital care provided to 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 over 30 years ago. 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 another state that chose not to expand Medicaid receives over 475 percent more funding for uninsured patient care than Florida.  And that Connecticut receives the same DSH allotment as Florida but has less than one-fifth the population and, in 2019, served only 0.8 percent the U.S. population at or below 100 percent of the federal poverty level, compared to Florida’s 5.9 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.
The SAFE Hospitals Act would: 

  • Gradually change 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 percent of the Federal Poverty Level (FPL).
  • Prioritize 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.
  • Expand 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.
  • Allow 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.