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Senate Health Care Package Is a Step in Right Direction, Does Not Go Far Enough on Access
Date:12/21/2009

resident and CEO of N.A.C.H.

Provider participation under Medicaid is a top issue for children’s hospitals. Medicaid’s underpayment of pediatric services contributes to physician shortages in pediatric specialties and creates significant financial shortfalls for children’s hospitals. Children’s hospitals rely on DSH funds to help offset these gaps.

''There is a clear-cut difference between the Senate and House on Medicaid-DSH funding,'' explained McAndrews. ''The House bill does a better job at recognizing the importance of DSH to children’s hospitals, proposing a $10 billion cut over 10 years compared to the Senate’s new number of $19 billion. We hope the House prevails in its position during conference.''

Originally the Senate had proposed $22.4 billion in Medicaid DSH. The original DSH cuts are based on the premise that safety net hospitals would no longer need these funds as more Americans gained health care coverage. This assumption does not apply to children’s hospitals which use DSH cuts to close shortfalls created by Medicaid underpayment versus gaps created by uninsured patients. On average, Medicaid reimburses children’s hospitals 67 percent of the cost of care when DSH is excluded, 76 percent of cost when DSH is included. More than half of children’s hospitals inpatient days are devoted to children covered by Medicaid.

According to the Association, the Senate also missed an opportunity to improve children’s access to care under Medicaid. Children’s hospitals support an amendment filed by Senator Sherrod Brown (S. Amd. 3185) that would ensure Medicaid payments for pediatric care services be no less than 80 percent of what Medicare pays for the same service in 2010, 90 percent in 2011 and 100 percent in 2012 and subsequent years.

''Senator Brown’s amendment is critically important to pediatrics,'' commented McAndrews. ''Increasing Medicai
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