Feds unveil plans for uncompensated-care fund cuts

Starting this October, the Centers for Medicare and Medicaid Services could begin cutting billions in federal funds meant to help hospitals with uncompensated-care costs (Source: “Billions in federal uncompensated-care funds to be cut starting in October,” Modern Healthcare, July 27, 2017).

The Affordable Care Act mandated that Medicaid disproportionate-share hospital funds be cut by $43 billion between fiscal 2018 and 2025. During negotiations over the ACA, hospital lobby groups acquiesced to the cuts under the assumption that expanded coverage from the healthcare reform law would reduce the need for the funding. 

Congress delayed the cuts, which were supposed to start in 2014, after hospitals complained that increased patient traffic wasn't outpacing uncompensated-care costs. The most recent extension expires Sept. 30.

The agency announced its plans in a proposed rulemaking Thursday. The cuts build year over year, starting at $2 billion in fiscal 2018, before making its way to $8 billion by fiscal 2025.