Save Our Safety-Net Hospitals Act of 2025
The Save Our Safety-Net Hospitals Act of 2025 aims to strengthen funding for safety-net hospitals by changing how Disproportionate Share Hospital (DSH) payments under Medicaid are calculated and distributed. The bill expands the definitions and sources that can count toward DSH payments (including Medicare—Title XVIII—and other applicable payer plans) and adds conditions tied to hospital costs relative to payments. It also gives states a new option to use unspent federal DSH allotments from prior years to increase DSH payment adjustments in a given rate year, subject to caps and safeguards (no recoupment of prior payments, potential retroactive state plan amendments, and required reporting). Overall, the bill seeks to preserve and enhance support for hospitals that serve large low-income populations, while permitting some flexibility in how funding is allocated across years. Effective dates are tied to rate years beginning after enactment, with specific provisions allowing states to act retroactively (under tightly defined conditions) to boost hospital payments using unspent allotments.
Key Points
- 1Expands DSH payment calculations to include payments made under Medicare (Title XVIII) or by an applicable plan for the services, broadening who counts toward DSH adjustments and when payments are considered.
- 2Adds a new eligibility trigger (subparagraph (B)(iii)) for DSH adjustments related to individuals who are medical-assistance eligible but for whom Medicare or another applicable payer is the ultimate payor, and only if the hospital’s aggregate costs exceed the payments for those services in the year.
- 3Reorganizes the statutory text around DSH calculations (removing and redesignating certain paragraphs) to reflect the broader, updated framework for DSH payments.
- 4Effective date: these amendments generally apply to Medicaid payment adjustments for rate years beginning on or after enactment.
- 5State option to use unspent DSH allotments from prior years: states may apply unspent federal allotments from earlier years to increase DSH payment adjustments for the current rate year, as long as increases stay within the state’s overall DSH allotment cap and the applicable federal cap.
- 6Safeguards on unspent funds: no recoupment of previously made payments if adjustments follow the new framework; retroactive state plan amendments permitted only to increase a payment adjustment and subject to a deadline tied to independent audits.
- 7Reporting requirement: states must report any increased DSH payments resulting from this provision in their next annual report under the existing 1923(j) reporting requirement.