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Hospitals to gain in Senate budget deal

The two-year budget deal reached by Republican and Senate leaders Feb. 7 includes some of the main priorities of hospital groups — a delay in cuts to facilities with large numbers of Medicaid patients and an extension of additional Medicare funds for rural hospitals that expired last fall, a Senate aide confirmed.

The provisions were also included in the stopgap spending bill approved by the House of Representatives on Feb. 6. According to The Hill, the longer-term Senate measure may be approved later Feb. 7, but it is unclear if it will pass the House before a potential government shut down on Feb. 9.

Disproportionate share hospitals, or DSH, had faced the cuts under the Affordable Care Act under the assumption that the 2010 healthcare law would mean facilities would have to treat fewer uninsured people. But not as many people got insurance as expected to offset the cuts, which went into effect Oct. 1, 2017.

The House's short-term measure to keep the government running through March 23 would eliminate $5 billion in scheduled Medicaid DSH cuts over the next two years.

Details of the Senate deal had not been released and it was not immediately known how long it would delay the cuts.

The Senate deal, like the House bill, would also extend extra Medicare funding for rural hospitals, which expired Oct. 1, 2017.

Health advocates had warned that more rural hospitals would be in danger of closing if the additional money meant to prop up rural facilities, including for those facilities dependent on Medicare and with low patient volumes, ended.

More than 120 rural hospitals have closed and another 673 are in danger of closing, according to the rural health association, since the imposition of sequestration budget cuts and a 2000 policy change that reduced reimbursements for a share of the money facilities lose when older Americans on Medicare fail to pay co-payments and deductibles.

Hospital groups had no immediate comment on the Senate deal, but they had praised the inclusion of the DSH and Medicare provisions in the House bill.

"The Medicaid DSH program is critical to hospitals and health systems that care for our nation's most vulnerable populations — children, the poor, the disabled and the elderly," Rick Pollack, the American Hospital Association's president and CEO, said in an emailed statement.

"Stopping the Medicaid DSH cuts will give hospitals the assistance and predictability they need to deliver high-quality care for their patients," he said.

Rep. Greg Walden, R-Ore., touting the spending bill on the House floor on Feb. 6, said the disproportionate share hospitals serve "the poorest of the poor."

Maggie Elehwany, the National Rural Health Association’s government affairs and policy vice president, also praised the House bill. "The [Medicare] payments are critical, but much more is needed to help overcome the great rural health disparities that continue to grow in rural America," Elehwany said in an email.

Cowen Washington Research Group analysts Eric Assaraf and Rick Weissenstein wrote in a Feb. 5 note that canceling the cuts to the DSH program was a "potential positive for hospitals and other Medicare providers."