Disproportionate Share Hospital (DSH) Program

The Kansas Health Policy Authority is proposing reforms to the current Medicaid Disproportionate Share Hospital (DSH) program which can provide as much as $25.7 M in federal matching funds annually to the state.  The goals of these reforms are to:

• Maintain the state’s support for the DSH program and devise a formula that always expends the maximum amount allowed by Federal regulations;
• Direct resources equitably towards hospitals that provide a high level of services to Medicaid beneficiaries and the uninsured by abandoning the existing two-formula strategy applied to LIUR and MIUR hospitals;
• Introduce dis-proportionality into the payment formula by increasing reimbursement for facilities that, relative to their size, incur a greater share of the burden of caring for Medicaid eligible individuals and the uninsured in the State of Kansas;
• Treat losses equally whether attributable to outpatient, inpatient, Medicaid, or uninsured services;
• Create more predictability and stability in DSH payments over time, lessening the payment “cliff” that faces marginal DSH hospitals.

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