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September 30, 2008

Oklahoma Hit Hard Due to Congressional Inaction

Deadline Expires Today on DSH Increases

WASHINGTON, DC - U.S. Senator Jim Inhofe (R-Okla.) and Congressman John Sullivan (R- Okla.) today expressed outrage that Congress failed to continue providing a 16 percent funding increase to Medicaid's Low Disproportionate Share Hospital (DSH) states for FY 2009. The deadline was today for Congress to act before these 16 percent annual funding increases expire.

Senator Inhofe has been leading a bipartisan effort with Senator Jeff Bingaman (D-NM) in the Senate to urge Congress to act. Last week, Senators Inhofe and Bingaman sent a letter to their colleagues warning without quick action, twenty states would lose financial assistance to help reduce the financial burden and decrease uncompensated care costs for state hospitals and facilities providing health care services to the indigent and uninsured.

Sen. Inhofe: "Because Congress failed to act, Oklahoma DSH hospitals will lose $4,093,146 for FY 2009 due to the 16% DSH increases expiring today," Senator Inhofe said. "It's outrageous that the Democrat run Congress failed to even raise the extension for consideration. DSH payments help to reduce the financial burden and decrease uncompensated care costs for Oklahoma hospitals and facilities providing health care services to the indigent and uninsured.  Congress created the Medicaid DSH payment in 1981 to ensure that state Medicaid programs provide adequate payments to hospitals whose patient populations are disproportionately composed of low income Medicaid and uninsured patients.  Medicaid DSH payments have evolved into one of the most important sources of financing for the nation's health care safety net."

Congressman John Sullivan sent a bipartisan letter to House leadership and appropriators urging them to extend the 16 percent annual funding increases to Medicaid's Low Disproportionate Share Hospital (DSH) states.  Without Congressional intervention this critical funding, which helps Oklahoma hospitals and other safety net providers provide quality healthcare to all Oklahomans.

Congressman Sullivan: "With the 16 percent DSH expiring today, it is shameful that Speaker Pelosi and the Democrat controlled Congress did not act to continue this percentage so that our hospitals and healthcare providers do not feel the financial strain of providing health care services to the indigent, uninsured and underserved" Sullivan said. "On September 17, 2008, I sent a bipartisan letter to House Leadership and Appropriators urging them to make these funding increases a priority before Congress adjourns.  Without this funding in place, hospitals in Oklahoma and twenty other states will be strained with uncompensated care costs, potentially limiting access to quality health care."

In April of this year, Congressman Sullivan introduced H.R. 5721, the Strengthening the Safety Net Act of 2008.  This legislation will ensure that Oklahoma hospitals and other safety net providers are able to continue providing quality care to all Oklahomans and ensure that the government is effectively and responsibly using taxpayer's money when it comes to health care programs.  

"My legislation will bring Oklahoma's hospitals on equal footing with other states who already receive their fair share of Medicaid Disproportionate Share Hospital (DSH) payments," Sullivan said.  "In addition, this legislation creates an innovative new grant program to help fund health access networks, which will bring low income and uninsured patients out of our nation's emergency rooms, where care comes at a high cost to taxpayers, and into more cost effective primary care facilities.  With Oklahoma having the fourth highest rate of uninsured in the nation, it is critical that Oklahoma hospitals receive a fair distribution of DSH funds in order to care for the indigent population."

Craig W. Jones, FACHE, President, Oklahoma Hospital Association said today that, "Many of Oklahoma's ‘safety-net' hospitals in their communities continue to experience increasing numbers of uninsured patients treated through their emergency departments, or admitted with chronic conditions that have gone unmanaged.  The DSH program has been a critical source of payment for these providers while they also cope with chronic workforce shortages.  Extending the 16% DSH increases this program's funding is an essential element in helping them maintain the basic levels of care required in their communities."

Val Schott, Director, Oklahoma State University Center for Health Sciences, Center for Rural Health, said, "DSH payments are important for rural hospitals as well as their urban counterparts.  DSH payments provide much needed funding for rural qualifying hospitals that are either too large to be a Critical Access Hospital or are located in too close proximity to another hospital.  DSH funding is important for those eligible hospitals in order to continue care for a large uninsured population.  This funding should be increased, not decreased until such time as we as a society find a method of providing insured health coverage for all our residents."


Under current law, DSH payments are subject to a series of caps, both on the amount of DSH money an individual hospital can receive (hospital-specific DSH caps) as well as on the total amount of DSH payments within a state (state DSH allotments).  The amount of the state-by-state allotments was established in 1991 based on the size of a state's DSH program at that time.  While some states had fairly robust programs in 1991 and therefore have fairly generous caps, many states were left with very low DSH caps. 

In 2003, Congress passed the Medicare Modernization Act (MMA).  The MMA statutorily defined Low DSH states as those states where DSH expenditures are less than 3 percent of total Medicaid expenditures as of FY 2000.  They provided these states with a 16 percent annual funding increase to their DSH allotments through FY 2008.  After FY 2008, low DSH states will only receive limited consumer price index inflation adjustments, so if the definition is extended through 2005, the following states will continue to receive the 16 percent increase until DSH payments are equalized throughout the country: Oklahoma, Alaska, Idaho, Montana, Oregon, Arizona, Iowa, Nebraska, South Dakota, Arkansas, Maine, New Mexico, Utah, Delaware, Maryland, North Dakota, Wisconsin, Florida, Minnesota, and Wyoming.


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