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Without expanding Medicaid, health reforms will hurt hospitals helping uninsured

Updated: December 4, 2013 6:18AM



New reforms under the Affordable Care Act have hospitals that serve largely uninsured populations concerned about reduced cash flow.

The Center for Medicaid and Medicare Services ruled that hospitals receiving Medicaid Disproportionate Share Hospital, or DSH, payments will be cut by $18.1 billion nationwide from fiscal year 2014 to fiscal year 2020. These payments go to safety-net hospitals, which treat high volumes of patients who have low incomes.

Three area facilities, St. Catherine of East Chicago, St. Margaret in Hammond and Methodist Hospitals Northlake campus in Gary qualify as a safety-net hospitals.

The DSH funds would decrease as patients join the expanded Medicaid program set by the ACA, said Denise Dillard, a government consultant for Methodist Hospitals and Franciscan Alliance. In theory, the money would shift from once source to the other.

“The biggest thing with the safety-net hospitals is the lack of Medicaid expansion,” Dillard said. “Those hospitals are definitely dependent on those payments, because it’s not money that adds to the revenue, it directly subsidizes the care of underinsured people.”

Safety-net hospitals in states like Indiana that don’t expand Medicaid will continue to lose revenue, without the benefit of gains from newly enrolled Medicaid patients.



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