September 1, 2009

Text of H.R. 3200: Title VII - SEC. 1704. REDUCTION IN MEDICAID DSH

Text of H.R. 3200: America's Affordable Health Choices Act of 2009

SEC. 1704. REDUCTION IN MEDICAID DSH.
(a) Report -

(1) IN GENERAL- Not later than January 1, 2016, the Secretary of Health and Human Services (in this title referred to as the ‘Secretary’) shall submit to Congress a report concerning the extent to which, based upon the impact of the health care reforms carried out under division A in reducing the number of uninsured individuals, there is a continued role for Medicaid DSH. In preparing the report, the Secretary shall consult with community-based health care networks serving low-income beneficiaries.

(2) MATTERS TO BE INCLUDED- The report shall include the following:

(A) RECOMMENDATIONS- Recommendations regarding --

(i) the appropriate targeting of Medicaid DSH within States; and

(ii) the distribution of Medicaid DSH among the States.

(B) SPECIFICATION OF DSH HEALTH REFORM METHODOLOGY - The DSH Health Reform methodology described in paragraph (2) of subsection (b) for purposes of implementing the requirements of such subsection.

(3) COORDINATION WITH MEDICARE DSH REPORT- The Secretary shall coordinate the report under this subsection with the report on Medicare DSH under section 1112.

(4) MEDICAID DSH- In this section, the term ‘Medicaid DSH’ means adjustments in payments under section 1923 of the Social Security Act for inpatient hospital services furnished by disproportionate share hospitals.

(b) Medicaid DSH Reductions -

4(1) IN GENERAL - The Secretary shall reduce Medicaid DSH so as to reduce total Federal payments to all States for such purpose by $1,500,000,000 in fiscal year 2017, $2,500,000,000 in fiscal year 2018, and $6,000,000,000 in fiscal year 2019.

(2) DSH HEALTH REFORM METHODOLOGY - The Secretary shall carry out paragraph (1) through use of a DSH Health Reform methodology issued by the Secretary that imposes the largest percentage reductions on the States that --

(A) have the lowest percentages of uninsured individuals (determined on the basis of audited hospital cost reports) during the most recent year for which such data are available;

(B) do not target their DSH payments on --

(i) hospitals with high volumes of Medicaid inpatients (as defined in section 1923(b)(1)(A) of the Social Security Act (42 U.S.C. 1396r-4(b)(1)(A)); and

(ii) hospitals that have high levels of uncompensated care (excluding bad debt).

(3) DSH ALLOTMENT PUBLICATIONS -

(A) IN GENERAL- Not later than the publication deadline specified in subparagraph (B), the Secretary shall publish in the Federal Register a notice specifying the DSH allotment to each State under 1923(f) of the Social Security Act for the respective fiscal year specified in such subparagraph, consistent with the application of the DSH Health Reform methodology described in paragraph (2).

(B) PUBLICATAION DEADLINE- The publication deadline specified in this subparagraph is --

(i) January 1, 2016, with respect to DSH allotments described in subparagraph (A) for fiscal year 2017;

(ii) January 1, 2017, with respect to DSH allotments described in subparagraph (A) for fiscal year 2018;

(iii) January 1, 2018, with respect to DSH allotments described in subparagraph (A) for fiscal year 2019.

(c) Conforming Amendments -

(1) Section 1923(f) of the Social Security Act (42 U.S.C. 1396r-4(f)) is amended --

(A) by redesignating paragraph (7) as paragraph (8); and

(B) by inserting after paragraph (6) the following new paragraph:

‘(7) SPECIAL RULE FOR FISCAL YEARS 2017, 2018, AND 2019 -

‘(A) FISCAL YEAR 2017 - Notwithstanding paragraph (2), the total DSH allotments for all States for --

‘(i) fiscal year 2017, shall be the total DSH allotments that would otherwise be determined under this subsection for such fiscal year decreased by $1,500,000,000;

‘(ii) fiscal year 2018, shall be the total DSH allotments that would otherwise be determined under this subsection for such fiscal year decreased by $2,500,000,000; and

‘(iii) fiscal year 2019, shall be the total DSH allotments that would otherwise be determined under this subsection for such fiscal year decreased by $6,000,000,000.’.

(2) Section 1923(b)(4) of such Act (42 U.S.C. 1396r-4(b)(4)) is amended by adding before the period the following: ‘or to affect the authority of the Secretary to issue and implement the DSH Health Reform methodology under section 1704(b)(2) of the America’s Health Choices Act of 2009’.

(d) Disproportionate Share Hospitals (DSH) and Essential Access Hospital (EAH) Non -Discrimination -

(1) IN GENERAL - Section 1923(d) of the Social Security Act (42 U.S.C. 1396r-4) is amended by adding at the end the following new paragraph:

‘(4) No hospital may be defined or deemed as a disproportionate share hospital, or as an essential access hospital (for purposes of subsection (f)(6)(A)(iv), under a State plan under this title or subsection (b) of this section (including any waiver under section 1115) unless the hospital --

‘(A) provides services to beneficiaries under this title without discrimination on the ground of race, color, national origin, creed, source of payment, status as a beneficiary under this title, or any other ground unrelated to such beneficiary’s need for the services or the availability of the needed services in the hospital; and

‘(B) makes arrangements for, and accepts, reimbursement under this title for services provided to eligible beneficiaries under this title.’.

(2) EFFECTIVE DATE - The amendment made by subsection (a) shall be apply to expenditures made on or after July 1, 2010.

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