Crs Report for Congress - Medicaid Disproportionate Share Payments: January 10, 2005 - 97-483 (Paperback)

The Medicaid statute requires that states make disproportionate share (DSH) adjustments to the payment rates of certain hospitals treating large numbers of lowincome and Medicaid patients -- recognizing the disadvantaged situation of those hospitals. Although the requirement was established in 1981, DSH payments did not become a significant part of the program until after 1989 when they grew from just under $1 billion to almost $17 billion by 1992. During that time states' Medicaid budgets were facing a number of upward pressures while states were learning about financing techniques that made it easier to collect increased DSH payments from the federal government. In 1991 Congress intervened to control the growth of DSH payments by limiting the amounts available to each state and setting national limits. The new law was successful. After 1992 DSH payment growth slowed considerably, although the level of national DSH payments remains high -- just over $15.9 billion in 2002. Today, as a result of amendments contained in the Balanced Budget Act of 1997 (BBA-1997) and further changes in the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA 2000), a state's DSH payments may not exceed an allotment amount set in the law ...