Disproportionate Share Hospital

DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS

What are DSH Payments?

Many rural and safety net hospitals provide care for a large number of uninsured and underinsured patients and receive funding to help offset the uncompensated costs of care. These funds are called Disproportionate Share Hospital (DSH) payments.

Why Do They Matter?

DSH funding is critical for hospitals in rural and low-income areas to maintain the level of service they provide to their communities.

DSH hospitals have a low number of patients with private insurance, so they cannot shift these losses to insurance providers.

Without DSH funding, these hospitals would be forced to reduce services, lay off staff, or close entirely—all devastating options for the communities they operate in.

DSH is a Medicaid program. The federal Centers for Medicare and Medicaid Service (CMS) provides this funding and states provide matching funds.

In New York, hospitals rely on $3.9 billion in DSH payments annually, more than any other state, according to KFF analysis.

Threats To DSH Funding

  • 2017

    2017

    CMS threatened to reduce New York’s DSH allocation by $330 million in 2018, with annual reductions increasing until they reach nearly $1 billion.

  • 2021

    2021

    Congress passed a rule to reduce potential overpayments, limiting hospitals’ abilities to combine government and private funds to cover a service, and causing up to $8 billion in losses over four years.

  • 2024

    2024

    The federal reduction of DSH allotments is delayed through 2028. The delay of the $8 billion annual cut provides a more stable funding environment for hospitals.