Save our Safety-Net Hospitals Act of 2025
The Save our Safety-Net Hospitals Act of 2025 would expand and modify how Disproportionate Share Hospital (DSH) payment adjustments are calculated under Medicaid. By amending section 1923(g) of the Social Security Act, the bill broadens what counts as “payments” to hospitals (including Medicare payments under Title XVIII and payments by an applicable plan) and adds conditions under which mixed-payer patients can trigger DSH adjustments. It also reorganizes the current statutory structure and sets an effective date for these changes to apply to Medicaid State plan rate years beginning after enactment. In addition, the bill creates a state option to use unspent DSH allotments from prior years to increase hospital payment adjustments in the current year, subject to caps, protections against recoupment, possible retroactive State plan amendments with federal approval, and mandatory reporting of any increases. Overall, the bill aims to bolster funding for safety-net hospitals by both expanding the set of payments that count toward DSH adjustments and giving states more flexibility to allocate unspent DSH funds to raise hospital payments, with added oversight and reporting requirements.
Key Points
- 1Expanded counting of payments for DSH adjustments: The bill adds payments made under Title XVIII (Medicare) and payments by an applicable plan to the list of items considered when determining hospital payments under DSH adjustments, and it modifies the payer-and-cost test for certain hospitals and patients.
- 2Payer-mix criteria for mixed programs: The bill creates a new criterion to count patients who are eligible for medical assistance (state plan or waiver) but for whom Medicare or another applicable plan is the payor after applying benefits, provided the hospital’s aggregate costs exceed these payments for the year.
- 3Reorganization and clarifications: The bill rearranges and clarifies the 1923(g) structure (removing one paragraph, renumbering others) to align the provisions with the broader changes.
- 4Effective date and transitional authority: The amendments apply to Medicaid DSH payment adjustments for rate years beginning after enactment, with transitional mechanics for states to use unspent prior-year DSH allotments to boost current-year payments within specified caps.
- 5State options and protections: States may use unspent DSH funds to increase hospital payments, subject to not exceeding overall DSH allotments, no recoupment of already-made payments, potential retroactive state plan amendments approved by the Secretary, and required reporting in the annual state plan audit/report.