Determinants of Community-Related Expenses of US Tax-Exempt Hospitals, 2013

CONTEXT

Tax-exempt hospitals in the United States are required to report community benefit expenses on their federal tax forms. Two categories of expenses critical to the public health mission of hospitals are the "community health improvement" and "community-building" expense categories. The community health improvement expenses formally qualify as a community benefit, whereas community-building expenses do not. Increasing both types of spending would be consistent with the growing evidence on the effects of social determinants on population health.

OBJECTIVE

To identify characteristics associated with the level of community health improvement and community-building expenses reported by tax-exempt hospitals.

DESIGN

The general acute care hospital is the unit of analysis. We utilize secondary data for all US general acute care hospitals that filed their own Internal Revenue Service Form 990 Schedule H for 2013 (n = 1508). We apply linear regression analysis to an explanatory model with 8 independent variables.

MEASURES

The primary dependent variables are percentage of operating expenses devoted to community health improvement and to community building. The independent variables include 4 hospital-level measures, 3 county-level measures, and a measure of state requirements for community benefit.

RESULTS

The level of community health improvement expenses is positively associated with bed size, system membership, profit margin, and urban location. In states where tax-exempt hospitals are required to demonstrate community benefit to the state, there is lower community health improvement spending. Teaching hospitals also demonstrate lower community health improvement spending. Results for community-building expenses mirror those for community health improvement except that teaching hospital status and per capita income lose significance and hospital competition gains significance in the negative direction.

CONCLUSIONS

Leaders among tax-exempt hospitals in community-related spending are hospitals that are larger, more profitable, members of systems, and located in urban areas and in states that do not have community benefit requirements.

Association of State Medicaid Expansion With Hospital Community Benefit Spending

IMPORTANCE

Medicaid expansion was widely expected to alleviate the financial stresses faced by hospitals by providing additional revenue in the form of Medicaid reimbursements from patients previously receiving uncompensated care. Among nonprofit hospitals, which receive tax-exempt status in part because of their provision of uncompensated care, Medicaid expansion could have released hospital funds toward other community benefit activities.

OBJECTIVE

To examine changes in nonprofit hospital spending on community benefit activities after Medicaid expansion.

DESIGN, SETTING, AND PARTICIPANTS

This cohort study used difference-in-differences analysis of 1666 US nonprofit hospitals that filed Internal Revenue Service Form 990 Schedule H detailing their community benefit expenditures between 2011 and 2017. The analysis was conducted from February to September 2019.

EXPOSURES

State Medicaid expansion between 2011 and 2017.

MAIN OUTCOMES AND MEASURES

Percentage of hospital operating expenditures attributable to charity care and subsidized care, bad debt (ie, unreimbursed spending for care of patients who did not apply for charity care), unreimbursed Medicaid spending, noncare direct community spending, and total community benefit spending.

RESULTS

Of 1478 hospitals in the sample in 2011, nearly half (653 [44.2%]) were small hospitals with fewer than 100 beds, and nearly 70% of hospitals (1023 [69.2%]) were in urban areas. Among the 1666 nonprofit hospitals, Medicaid expansion was associated with a decrease in spending on charity care and subsidized care (-0.68 [95% CI, -0.99 to -0.37] percentage points from a baseline mean [SD] of 3.6% [4.0%] of total hospital expenditures; P < .001) and in bad debt (-0.17 [95% CI, -0.32 to -0.01] percentage points). There was an increase in unreimbursed spending attributable to caring for Medicaid patients (0.85 [95% CI, 0.60 to 1.10] percentage points; P = .04), which canceled out uncompensated care savings from the expansion. Noncare direct community expenditures decreased overall (-0.24 [95% CI, -0.48 to 0.00] percentage points; P = .049). Direct community expenditures remained more stable in small hospitals (-0.07 [95% CI, -0.20 to 0.05] percentage points; P =.26) compared with large hospitals (-0.37 [95% CI, -0.86 to 0.12] percentage points; P = .14) and in nonurban hospitals (0.02 [95% CI, -0.09 to 0.14] percentage points; P = .70) compared with urban hospitals (-0.36 [95% CI, -0.73 to 0.01] percentage points; P = .06).

CONCLUSIONS AND RELEVANCE

In this study, Medicaid expansion was associated with a decrease in nonprofit hospitals' burden of providing uncompensated care, but this financial relief was not redirected toward spending on other community benefits.

Association of Nonprofit Hospitals' Charitable Activities With Unreimbursed Medicaid Care After Medicaid Expansion

IMPORTANCE

In the United States, nonprofit hospitals receive tax-exempt status with the expectation that they provide a high level of benefit to local communities. Prior work has shown that Medicaid expansion reduced hospital spending on uncompensated care.

OBJECTIVE

To measure the association of tax-exempt hospital spending with community benefit and changes in uncompensated care after Medicaid expansion.

DESIGN, SETTING, AND PARTICIPANTS

This cohort study was performed using a difference-in-differences analysis (ie, a pre-post treatment-control design) to estimate changes in reported charitable categories associated with Medicaid expansion. Data from Internal Revenue Service form 990, Schedule H, tax filings for 2253 tax-exempt hospitals in the United States from 2012 to 2016 were used. Data were analyzed from June to November 2019.

EXPOSURE

The proportion of the hospital's tax filing that spanned the period after Medicaid expansion.

MAIN OUTCOMES AND MEASURES

Hospital-reported spending on uncompensated care, unreimbursed Medicaid expenses, and other community benefit spending categories.

RESULTS

Across 2253 hospitals, mean (SD) uncompensated care costs between 2012 and 2016 were $4.20 million ($8.80 million) and unreimbursed Medicaid expenses were $7.60 million ($18.62 million). Compared with tax-exempt hospitals in states that did not expand Medicaid, those in states that did expand Medicaid reported mean reductions in their provision of uncompensated care of $1.11 million (95% CI, $0.35 million to $1.87 million; P < .001), representing a mean change of -2% (95% CI, -6% to 2%; P < .001). These reductions have been offset by mean reported increases in the provision of unreimbursed Medicaid expenses of $1.63 million (95% CI, $0.31 million to $2.94 million; P = .02), representing a mean increase of 2% (95% CI, 1% to 4%; P = .01). Tax-exempt hospitals in states that expanded Medicaid reported no statistically significant mean increase in spending on other community benefit activities.

CONCLUSIONS AND RELEVANCE

In this study, large decreases in uncompensated care among tax-exempt hospitals associated with Medicaid expansion were not accompanied by increases in other reportable categories of community health benefit spending. Instead, they were accompanied by increased spending on unreimbursed Medicaid expenses.

Comparing the Affordable Care Act's Financial Impact on Safety-Net Hospitals in States That Expanded Medicaid and Those That Did Not

ISSUE

Safety-net hospitals play a vital role in delivering health care to Medicaid enrollees, the uninsured, and other vulnerable patients. By reducing the number of uninsured Americans, the Affordable Care Act (ACA) was also expected to lower these hospitals’ significant uncompensated care costs and shore up their financial stability.

GOAL

To examine how the ACA’s Medicaid expansion affected the financial status of safety-net hospitals in states that expanded Medicaid and in states that did not.

METHODS

Using Medicare hospital cost reports for federal fiscal years 2012 and 2015, the authors compared changes in Medicaid inpatient days as a percentage of total inpatient days, Medicaid revenues as a percentage of total net patient revenues, uncompensated care costs as a percentage of total operating costs, and hospital operating margins.

FINDINGS AND CONCLUSIONS

Medicaid expansion had a significant, favorable financial impact on safety-net hospitals. From 2012 to 2015, safety-net hospitals in expansion states, compared to those in nonexpansion states, experienced larger increases in Medicaid inpatient days and Medicaid revenues as well as reduced uncompensated care costs. These changes improved operating margins for safety-net hospitals in expansion states. Margins for safety-net hospitals in nonexpansion states, meanwhile, declined.

The Impact of the ACA's Medicaid Expansion on Hospitals' Uncompensated Care Burden and the Potential Effects of Repeal

ISSUE: By increasing health insurance coverage, the Affordable Care Act's Medicaid eligibility expansion was also expected to lessen the uncompensated care burden on hospitals. The expansion currently faces an uncertain future. GOAL: To compare the change in hospitals' uncompensated care burden in the 31 states (plus the District of Columbia) that chose to expand Medicaid to the changes in states that did not, and to estimate how these expenses would be affected by repeal or further expansion. METHODS: Analysis of uncompensated care data from Medicare Hospital Cost Reports from 2011 to 2015. FINDINGS AND CONCLUSIONS: Uncompensated care burdens fell sharply in expansion states between 2013 and 2015, from 3.9 percent to 2.3 percent of operating costs. Estimated savings across all hospitals in Medicaid expansion states totaled $6.2 billion. The largest reductions in uncompensated care were found for hospitals in expansion states that care for the highest proportion of low-income and uninsured patients. Legislation that scales back or eliminates Medicaid expansion is likely to expose these safety-net hospitals to large cost increases. Conversely, if the 19 states that chose not to expand Medicaid were to adopt expansion, their uncompensated care costs also would decrease by an estimated $6.2 billion.

Medicaid Program; Disproportionate Share Hospital Payments--Treatment of Third Party Payers in Calculating Uncompensated Care Costs. Final rule

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under section 1923(g)(1)(A) of the Social Security Act (Act), and the application of such limitation in the annual DSH audits required under section 1923(j) of the Act, by clarifying that the hospital-specific DSH limit is based only on uncompensated care costs. Specifically, this rule makes explicit in the text of the regulation, an existing interpretation that uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for payments made to hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals. As a result, the hospital-specific limit calculation will reflect only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source.

Defining the activities of publicness for Korea's public community hospitals using the Delphi method

This study aims to identify which activities of a public community hospital (PHC) should be included in their definition of publicness and tries to achieve a consensus among experts using the Delphi method. We conduct 2 rounds of the Delphi process with 17 panel members using a developed draft of tentative activities for publicness including 5 main categories covering 27 items. The questions remain the same in both rounds and the applicability of each of the 27 items to publicness is measured on a 9-point scale. If the participants believe government funding is needed, we ask how much they think the government should support each item on a 0% to 100% scale. After conducting 2 rounds of the Delphi process, 22 out of the 27 items reached a consensus as activities defining the publicness of the PHCs. Among the 5 major categories, in category C, activities preventing market failure, all 10 items were considered activities of publicness. Nine of these were evaluated as items that should be compensated at 100% of total financial loss by the Korean government. Throughout results, we were able to define the activities of the PCH that encompassed its publicness and confirm that there are "good deficits" in the context of the PCHs. Thus, some PCH deficits are unavoidable and not wasted as these monies support a necessary role and function in providing public health. The Korean government should therefore consider taking actions such as exempting such "good deficits" or providing additional financial aid to reimburse the PHCs for "good deficits."

Association Between the 2014 Medicaid Expansion and US Hospital Finances

IMPORTANCE

The Affordable Care Act expanded Medicaid eligibility for millions of low-income adults. The choice for states to expand Medicaid could affect the financial health of hospitals by decreasing the proportion of patient volume and unreimbursed expenses attributable to uninsured patients while increasing revenue from newly covered patients.

OBJECTIVE

To estimate the association between the Medicaid expansion in 2014 and hospital finances by assessing differences between hospitals in states that expanded Medicaid and in those states that did not expand Medicaid.

DESIGN AND SETTING

Observational study with analysis of data for nonfederal general medical or surgical hospitals in fiscal years 2011 through 2014, using data from the American Hospital Association Annual Survey and the Health Care Cost Report Information System from the US Centers for Medicare & Medicaid Services. Multivariable difference-in-difference regression analyses were used to compare states with Medicaid expansion with states without Medicaid expansion. Hospitals in states that expanded Medicaid eligibility before January 2014 were excluded.

EXPOSURES

Medicaid expansion in 2014, accounting for variation in fiscal year start dates.

MAIN OUTCOMES AND MEASURES

Hospital-reported information on uncompensated care, uncompensated care as a percentage of total hospital expenses, Medicaid revenue, Medicaid as a percentage of total revenue, operating margins, and excess margins.

RESULTS

The sample included between 1200 and 1400 hospitals per fiscal year in 19 states with Medicaid expansion and between 2200 and 2400 hospitals per fiscal year in 25 states without Medicaid expansion (with sample size varying depending on the outcome measured). Expansion of Medicaid was associated with a decline of $2.8 million (95% CI, -$4.1 to -$1.6 million; P < .001) in mean annual uncompensated care costs per hospital. Hospitals in states with Medicaid expansion experienced a $3.2 million increase (95% CI, $0.9 to $5.6 million; P = .008) in mean annual Medicaid revenue per hospital, relative to hospitals in states without Medicaid expansion. Medicaid expansion was also significantly associated with improved excess margins (1.1 percentage points [95% CI, 0.1 to 2.0 percentage points]; P = .04), but not improved operating margins (1.1 percentage points [95% CI, -0.1 to 2.3 percentage points]; P = .06).

CONCLUSIONS AND RELEVANCE

The hospitals located in the 19 states that implemented the Medicaid expansion had significantly increased Medicaid revenue, decreased uncompensated care costs, and improvements in profit margins compared with hospitals located in the 25 states that did not expand Medicaid. Further study is needed to assess longer-term implications of this policy change on hospitals' overall finances.

Charity at the Deathbed: Impacts of Public Funding Changes on Hospice Care

A core hospice value is caring for dying individuals regardless of their ability to pay. Historically, a stable source of government funding has provided the financial cushion necessary to extend care to indigent patients. Recently however, 2 factors have challenged the charitable-care value. First, financial reserves have been constrained by regulatory actions limiting admissions, lengths of stay, and reimbursement levels. Second, the number of uninsured individuals has increased. This study of hospices in 17 states found that hospices (1) remain committed to indigent care despite deep concerns about inadequate financial resources, (2) are encountering increased demand for services from indigent patients, (3) are currently covering indigent-care costs, but are pessimistic about their future ability to do so, and (4) are pursuing alternative funding with mixed results.

Impact of clinical pharmacy services on outcomes and costs for indigent patients with diabetes

OBJECTIVES

To provide a review of the outcomes and costs in patients seen by Clinical Pharmacy Specialist (CPS) Certified Diabetes Educators in ambulatory care for diabetes management.

STUDY DESIGN

A retrospective chart review.

METHODS

All patients discharged by a CPS for diabetes management between January 1, 2010, and December 31, 2013, were included.

RESULTS

A total of 915 patients were discharged from CPS services. The majority of patients had type 2 diabetes (98.7%) and were female (63.1%), Hispanic (53.3%), and on average, were aged 56 years. The patients were seen by the CPS for approximately 5.3 face-to-face visits, and by their provider for 1.9 face-to-face visits. The average difference from baseline for glycated hemoglobin was -2.6%, while the average systolic and diastolic blood pressures improved by -8 mm Hg and -3 mm Hg, respectively. The major lipid parameters also reported improvement, averaging -23 mg/dL for total cholesterol, -54 mg/dL for triglycerides, -15 mg/dL for low-density lipoprotein cholesterol, -23 mg/dL for non-high-density lipoprotein cholesterol (non-HDL-C), and +0.8 mg/dL for HDL-C. Overall, the average difference from baseline to final visit for the numbers and costs of medications and diabetes supplies per patient increased slightly. Medication adherence also improved each year in patients with diabetes.

CONCLUSIONS

The CPSs directly impact patient care through improvements in clinical outcomes. They help patients achieve disease-state goals for diabetes, hypertension, and dyslipidemia through a variety of clinical interventions and by promoting medication adherence. These data demonstrate the significant positive impact to the institution that clinical pharmacy services have in diabetes management.

HOSPITAL FINANCIAL PRESSURES AND THE HEALTH OF THE UNINSURED: WHO GETS HURT?

The increasing financial pressures of health care insurance coverage have become a key issue for advanced economies. This study tests whether hospital financial pressures have an effect on the health of the uninsured population. To do so, the author investigates the implications of managed care for the uninsured in the United States. Managed care penetration has increased financial pressures on hospitals, and previous work has shown that safety net hospitals have been affected more severely. The study results reveal that charity care patients concentrate in government hospitals in areas where financial pressures imposed by managed care are greater. In addition, the quality of care of these hospitals decreases more in areas where managed care penetration is stronger. Finally, the stronger financial pressures that managed care diffusion imposes have a negative effect on the quality of care the uninsured and those admitted to government hospitals receive.

Built for the road ahead

Henry Ford Health System in Detroit is seeking new ways to lower and cover costs for the large, low-income population it serves in southeastern Michigan. Employing a strategy that couples the federal 340B Drug Pricing Program with a prescription assistance program of its own creation, Henry Ford has seen improvement in the following areas: Increased medication adherence. Reduced readmissions. Cost savings that are sufficient to expand services where expansion otherwise would not have been feasible.

Funding, coverage, and access under Thailand's universal health insurance program: an update after ten years

BACKGROUND

In 2001, Thailand implemented a universal coverage program by expanding government-funded health coverage to uninsured citizens and limited their out-of-pocket payments to 30 Baht per encounter and, in 2006, eliminated out-of-pocket payments entirely. Prior research covering the early years of the program showed that the program effectively expanded coverage while a more recent paper of the early effects of the program found that improved access from the program led to a reduction in infant mortality.

OBJECTIVE

We expand and update previous analyses of the effects of the 30 Baht program on access and out-of-pocket payments.

DATA AND METHODS

We analyze national survey and governmental budgeting data through 2011 to examine trends in health care financing, coverage and access, including out-of-pocket payments.

RESULTS

By 2011, only 1.64 % of the population remained uninsured in Thailand (down from 2.61 % in 2009). While government funding increased 75 % between 2005 and 2010, budgetary requests by health care providers exceeded approved amounts in many years. The 30 Baht program beneficiaries paid zero out-of-pocket payments for both outpatient and inpatient care. Inpatient and outpatient contact rates across all insurance categories fell slightly over time.

CONCLUSIONS

Overall, the statistical results suggest that the program is continuing to achieve its goals after 10 years of operation. Insurance coverage is now virtually universal, access has been more or less maintained, government funding has continued to grow, though at rates below requested levels and 30 Baht patients are still guaranteed access to care with limited or no out-of-pocket costs. Important issues going forward are the ability of the government to sustain continued funding increases while minimizing cost sharing.

Supporting Family Caregivers

(1) About 8,000 baby boomers reach age 65 every day. (2) Nearly 70 percent of people over age 65 will need some form of long-term services and supports in their lives. (3) AARP estimates the value of uncompensated care provided by family caregivers to be more than $450 billion annually.

Medicaid program; disproportionate share hospital payments--uninsured definition. Final rule

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under the Social Security Act (the Act). Under this limitation, DSH payments to a hospital cannot exceed the uncompensated costs of furnishing hospital services by the hospital to individuals who are Medicaid-eligible or "have no health insurance (or other source of third party coverage) for the services furnished during the year.'' This rule provides that, in auditing DSH payments, the quoted test will be applied on a service-specific basis; so that the calculation of uncompensated care for purposes of the hospital-specific DSH limit will include the cost of each service furnished to an individual by that hospital for which the individual had no health insurance or other source of third party coverage.

Charity care in nonprofit urban hospitals: analysis of the role of size and ownership type in Washington State for 2011

Nonprofit hospitals are expected to serve their communities as charitable organizations in exchange for the tax exemption benefits they receive. With the passage into law of the Affordable Care Act, additional guidelines were generated in 2010 to ensure nonprofit hospitals are compliant. Nonetheless, the debate continues on whether nonprofit hospitals provide adequate charity care to their patient population. In this study, charity care provided by 29 Washington State nonprofit urban hospitals was examined for 2011 using financial data from the Washington State Department of Health. Charity care levels were compared to both income tax savings and gross revenues to generate two financial ratios that were analyzed according to hospital bed size and nonprofit ownership type. For the first ratio, 97% of the hospitals (28 of 29) were providing charity care in greater amounts than the tax savings they accrued. The average ratio value using total charity care and total income tax savings of all the hospitals in the study was 6.10, and the median value was 3.46. The nonparametric Kruskal-Wallis test results by bed size and nonprofit ownership type indicate that ownership type has a significant effect on charity care to gross revenue ratios (p = .020). Our analysis indicates that church-owned hospitals had higher ratios of charity care to gross revenues than did the other two ownership types--government and voluntary--in this sample. Policy implications are offered and further studies are recommended to analyze appropriate levels of charity care in nonprofit hospitals given new requirements for maintaining a hospital's tax-exempt status.

Free heart failure clinic aims to cut readmissions

Mountain State Health Alliance opened a free heart failure clinic after determining that patients' inability to get a timely follow-up appointment and financial issues were the cause of many readmissions. The clinic is in a convenient location, across the street from the hospital. The nurse practitioner who runs the program sees many of the patients while they are still in the hospital to inform them about the clinic. Interventions include help signing up for medication assistance, education for patients and family members, and ongoing support.

The magnitude, share and determinants of unpaid care costs for home-based palliative care service provision in Toronto, Canada

With increasing emphasis on the provision of home-based palliative care in Canada, economic evaluation is warranted, given its tremendous demands on family caregivers. Despite this, very little is known about the economic outcomes associated with home-based unpaid care-giving at the end of life. The aims of this study were to (i) assess the magnitude and share of unpaid care costs in total healthcare costs for home-based palliative care patients, from a societal perspective and (ii) examine the sociodemographic and clinical factors that account for variations in this share. One hundred and sixty-nine caregivers of patients with a malignant neoplasm were interviewed from time of referral to a home-based palliative care programme provided by the Temmy Latner Centre for Palliative Care at Mount Sinai Hospital, Toronto, Canada, until death. Information regarding palliative care resource utilisation and costs, time devoted to care-giving and sociodemographic and clinical characteristics was collected between July 2005 and September 2007. Over the last 12 months of life, the average monthly cost was $14 924 (2011 CDN$) per patient. Unpaid care-giving costs were the largest component - $11 334, accounting for 77% of total palliative care expenses, followed by public costs ($3211; 21%) and out-of-pocket expenditures ($379; 2%). In all cost categories, monthly costs increased exponentially with proximity to death. Seemingly unrelated regression estimation suggested that the share of unpaid care costs of total costs was driven by patients' and caregivers' sociodemographic characteristics. Results suggest that overwhelming the proportion of palliative care costs is unpaid care-giving. This share of costs requires urgent attention to identify interventions aimed at alleviating the heavy financial burden and to ultimately ensure the viability of home-based palliative care in future.

Public hospitals in peril: factors associated with financial distress

As "safety net providers," public hospitals have played a major role in health care delivery, especially in serving the indigent and the uninsured. For several decades, public hospitals have been operating in a challenging environment, and some of them have experienced financial difficulties. The purpose of this study was to explore the organizational and environmental factors associated with public hospitals' financial distress. This study used a national sample of public hospitals based on longitudinal panel data from 1997 to 2009, resulting in a sample size of 7,257 hospital-year observations. The Altman Z-score method was applied to assess hospitals' financial condition. The significant findings from a random effects logistic regression model with state and year fixed-effects indicated that higher Medicare HMO penetration was associated with financial distress. Organizational variables such as health network, size, occupancy rate, and outpatient mix decreased the odds of financial distress; and membership in a multihospital system increased the odds of financial distress.

Medicaid program; state disproportionate share hospital allotment reductions. Final rule

The statute, as amended by the Affordable Care Act, requires aggregate reductions to state Medicaid Disproportionate Share Hospital (DSH) allotments annually from fiscal year (FY) 2014 through FY 2020. This final rule delineates a methodology to implement the annual reductions for FY 2014 and FY 2015. The rule also includes additional DSH reporting requirements for use in implementing the DSH health reform methodology.

Protecting uninsured patients from high hospital charges: lessons from California

Key findings. (1) In 1997, the amount California hospitals billed uninsured patients was more than twice the amount hospitals received from Medicare for the same services. By 2010, billed charges had grown to be five times what Medicare paid, which trans­lated into a gap of more than $10,000 per day in the hospital. (2) Five years after the passage of the state's Hospital Fair Pricing Act, most California hospitals had financial assistance policies in place to make care more affordable for the state's uninsured population. (3) As of 2011, 81 percent of California hospitals reported charging low-income uninsured patients prices that were at or below Medicare rates. (4) While not required by the law, nearly all California hospitals reported offering free care to uninsured patients with incomes at or below 100 percent of poverty.

CMS's proposed rule implementing the ACA-mandated Medicaid DSH reductions

State Medicaid programs make Medicaid disproportionate share hospital (DSH) payments to hospitals to help offset costs of uncompensated care for Medicaid and uninsured patients. Unlike most Medicaid spending, annual DSH allotments for each state are capped. Under the Patient Protection and Affordable Care Act of 2010 (ACA), DSH payments will decrease starting in fiscal year (FY) 2014 and continuing through FY 2020. This paper describes the proposed rule for reducing these federal allotments, which was released on May 15, 2013, by the Centers for Medicare & Medicaid Services (CMS). Comments on the proposed rule are due July 12, 2013.