"Payments to Medicaid Disproportionate Share Hospitals"

In the Balanced Budget Act of 1997, Congress established limits on payments to the states for Disproportionate Share Hospitals (DSH). In the case of many states, there was a precipitous decline in dollars available over the five-year period. Institutions that are critical to providing services to low-income Medicaid beneficiaries and uninsured persons have already absorbed reductions in funding. Public hospitals, children’s hospitals, and private hospitals serving large numbers of Medicaid and uninsured people cannot weather additional reductions that are slated to take effect.

This Committee recognized in legislation that passed two years ago that this decline in available dollars had to be stopped. We passed legislation that stopped the decline at the level established for FY 2000, and applied inflationary factors for the next two fiscal years and beyond. Unfortunately, when the final legislation was enacted, we ended up with only a two-year fix, and an intention to resolve the problem before the original precipitous decline otherwise scheduled for FY 2003 could occur.

We are at the point now where we must act. The situation is even more dire than we might have anticipated. States are struggling with budget shortfalls. The effect of unemployment, loss of revenue because of Federal tax changes, and increasing health care costs have all put tremendous pressure on state budgets.

This legislation is a first step, but the relief it provides is not enough.

We believe that the Committee should continue to build on the level of funds we established in the legislation of 2000. To do anything less would have a devastating effect on these critical DSH institutions and on all the people who depend on them.

We also believe we should address the issue of "low-DSH" states to enable them to provide adequate funding to their facilities that serve as a critical safety net for poor and uninsured individuals.

Finally, while we are pleased that the Committee has decided to take a first step toward addressing the reductions in DSH payments, we are concerned that the Committee has neglected other important matters with respect to Medicaid. In particular, there is bipartisan support in the House for giving states the option to cover legal immigrant children and pregnant women under Medicaid and the Children’s Health Insurance Program as well as permanently extending the transitional medical assistance program (TMA) which provides health insurance coverage as families transition to the workforce from welfare. Assistance for low-income Medicare beneficiaries with incomes between 120% and 135% of poverty is set to expire this year and should be reinstated as well. Nearly a million children risk losing health insurance coverage unless issues within the Children’s Health Insurance Program are addressed this year. This program was passed out of this Committee with bipartisan support in 1997 and has a funding shortfall of $3 billion over three years, as well as a formula for redistributing state allotments which expires at the end of 2002. The Committee should act to preserve the gains in coverage made under this program.

Due to the offering of Committee Prints on separate subjects amendments offered by Members were ruled out of order as being nongermane. This is something, however, that we believe the Committee and Congress as a whole should take up this year.

John D. Dingell
Sherrod Brown
Henry A. Waxman
Rick Boucher
Edolphus Towns
Gene Green
Frank Pallone, Jr.
Mike Doyle
Karen McCarthy
Tom Barrett
Chris John
Bobby L. Rush
Ted Strickland
Anna G. Eshoo
Lois Capps
Peter Deutsch
Eliot L. Engel
Bart Stupak
Ralph M. Hall
Jane Harman
Tom Sawyer
Diana DeGette
Bart Gordon