Expanding on an article in Health Affairs, the Brookings Institution published a report outlining an innovative approach to financing the Medicaid Disproportionate Share Hospital Program (DSH). This approach would link future state DSH allotments to the number of people who are uninsured and the number of people enrolled in Medicaid.

From the report:

In future years, state allotments would be linked to more direct measures of uncompensated care volume as they become available. This approach would produce more gradual spending reductions over time relative to current legislation and would explicitly avoid funding “cliffs” that could subject providers of safety-net care to additional financing pressures. Further, it would recognize the critical role that Medicaid will continue to play in expanding insurance coverage through health care reform and the ongoing reliance by many institutions on relatively low Medicaid reimbursements.

Full report: Update: Reforming the Medicaid Disproportionate Share Hospital Program (PDF | 362 KB)