Lutheran Medical Center

• Medicare and Medicaid DSH are vital tools for ensuring the ability of private, non-profit urban safety-net hospitals to serve the low-income residents of their communities. • Reducing these payments is based on the assumption that hospitals will not need as much DSH money once more people are insured through Medicaid expansion and access to affordable insurance through the health insurance exchanges. • But the Medicare and Medicaid DSH cuts are scheduled to begin before even a single person gets insurance through these two means and before there is any evidence that the financial responsibility urban safety-net hospitals shoulder caring for the low-income residents of their communities has diminished at all. • And they will amount to literally billions and billions of dollars worth of cuts in payments that safety-net hospitals truly need to serve their communities, and they would be coming at a time of great ambiguity and change as implementation of this aspect of the Affordable Care Act gets under way. • Safety-net hospitals like Lutheran Medical Center can’t afford these cuts at this time. • We therefore urge support of H.R. 1920, the DSH Reduction Relief Act of 2013, which delays any reductions to DSH until FFY 2016. The new formula proposed by CMS to re allocate 75% of Medicare DSH using Medicaid and SSI Medicare days, or “low income days” is a much better proxy for allocating scarce DSH dollars than using “uncompensated care” as reported in each Hospitals institutional cost report. However this formula does not include “low income share days”, or the proportion of low income days to total days generated by a hospital, which better demonstrates the burden a particular hospital faces in serving the medically indigent However any reduction to safety net hospitals DSH funding puts another hole in the safety net. At least Congressmen John Lewis’ bill, H.R. 1920, gives us time to be