Issue Brief 19-27
October 10, 2019

The Affordable Care Act (ACA) reduced Medicaid Disproportionate Share Hospital (DSH) allotments on the assumption that there would be fewer uninsured people and less uncompensated care with the expansion of health care coverage. These cuts—initially scheduled to begin in fiscal year (FY) 2014—have been delayed repeatedly but are effective in FY 2020. (The FY 2020 continuing resolution temporarily delayed the cuts until November 21, 2019; see Budget Brief 19-17.)

The Centers for Medicare & Medicaid Services (CMS) recently published a final rule that outlines the methodology for implementing the annual reductions, which total $4 billion in FY 2020. The final rule is the same as the proposed one—issued in July 2017—with minor technical changes.