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House eyes partial cancellation of ACA Medicaid cuts

Apr 26, 2023
Illustration of a gloved hand holding a scalpel over a hundred dollar bill

Illustration: Natalie Peeples/Axios

One bipartisan bill discussed by Energy and Commerce Wednesday would partially cancel impending cuts to Medicaid disproportionate share hospital payments.

Why it matters: The move comes after nine delays of the cuts since 2014.

The big picture: The bill would push back the start of the cuts so they’ll only take place in fiscal years 2026 and 2027, two House aides confirmed to Axios.

  • Current statutory language says the cuts will apply from fiscal 2024 through 2027.
  • Notably, the bill would not extend the window of the cuts beyond 2027, effectively cancelling two years of the reductions.
  • Under the bill, DSH hospitals would still see an $8 billion reduction per year in both fiscal 2026 and 2027, according to an aide.

The intrigue: Although both Democratic and GOP aides confirmed the partial cancellation, some lawmakers referred to the policy as a delay of the cuts during Wednesday’s E&C hearing.

  • A news release about the bill also characterizes it as delaying the reductions.

What we’re watching: How much the bill will cost.

  • Lobbyists told us in February that Congress will likely use the $7 billion in the Medicaid Improvement Fund to offset delaying or stopping DSH reductions, but that doesn’t fully cover the $8 billion in cuts hospitals face for 2024 and 2025.
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