The Centers for Medicare & Medicaid Services (CMS) released a final rule to implement statutorily required Medicaid disproportionate share hospital (DSH) allotment reductions that are currently scheduled to begin in FY2020. The rule finalizes a methodology to calculate the annual reductions for FY2020 through FY2025 outlined in the table below. The methodology includes five factors outlined in 1923(f) of the Social Security Act, which include the uninsured percentage factor (UPF), high volume of Medicaid inpatients factor (HMF), high level of uncompensated care factor (HUF), low DSH adjustment factor (LDF), and budget neutrality factor (BNF). CMS will calculate individual states’ DSH reductions using each respective year’s preliminary DSH allotment as currently calculated under statue.
DSH Reduction Schedule for FY2020-2025
| Fiscal Year (FY) | Aggregate Reduction Amount |
|---|---|
| 2020 | $4,000,000,000 |
| 2021 | $8,000,000,000 |
| 2022 | $8,000,000,000 |
| 2023 | $8,000,000,000 |
| 2024 | $8,000,000,000 |
| 2025 | $8,000,000,000 |
For Technical Assistance related to Medicaid DSH Reductions, please contact Richard.Cuno@cms.hhs.gov or Stuart.Goldstein@cms.hhs.gov.
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