September 29, 2017

CHIP authorization to expire, DSH cuts to take effect if Congress doesn't act by Sept. 30

Daily Briefing

Congress on Thursday extended federal funding for teaching health centers, an Indian Health Service diabetes program, and a Medicare demonstration program for individuals with weakened immune systems via a larger bill (HR 3823) that extended funding for the Federal Aviation Administration (FAA).

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Federal funding for FAA and the health care programs was set to expire Sept. 30. Both the House and Senate passed the bill by voice vote. The bill now heads to President Trump.

Funding for other health care programs set to expire

However, Congress has yet to extend federal funding also set to expire Sept. 30 for a host of other health care programs, including CHIP and federal grants for community health centers.

According to Politico's "Pulse," House Rules Committee Chair Pete Sessions (R-Texas) said reauthorizing federal funding for CHIP by the Sept. 30 deadline is not "dire or urgent" because states have enough funding to continue implementing the program through the end of the year. According to the Kaiser Family Foundation, out of 42 states that provided estimates of when they'll likely deplete their funding for CHIP, 10 anticipated they would run out of funds by the end of December and 32 anticipated they would run out of funds by March 2018. One state, Minnesota, predicted it could run out of CHIP funding by the end of September, Healthline reports.

Likewise, Sessions, reading a statement from House Energy and Commerce Committee Chair Greg Walden (R-Ore.), said it was Walden's understanding that community health centers would "not have to access mandatory appropriations until early December," "Pulse" reports.

The House Energy and Commerce Committee is scheduled on Oct. 4 to markup legislation to extend federal funding for CHIP and community health centers.

Cuts to disproportionate share hospital payments set to take effect

Congress also has not acted to delay cuts to disproportionate share hospital (DSH) payments, which are scheduled to take effect Oct. 1, AHA News reports.

The payments help offset hospitals' costs for providing uncompensated care to low-income patients. The Affordable Care Act called for DSH payments to be reduced over an eight-year period. However, lawmakers over the past three years have passed legislation to keep the cuts from taking effect. Currently, $43 billion in DSH payment cuts from fiscal year 2018 through fiscal year 2025 are scheduled to take effect on Oct. 1.

According to AHA News, a group of 221 House lawmakers in a letter sent Thursday urged congressional leaders to delay the payment cuts, writing that safety net hospitals would "face a financial shortfall of $2 billion in [fiscal year] 2018" if the cuts are left in place. They continued, "Our nation's hospitals cannot sustain losses of this magnitude," adding, "Institutions will be forced to shutter, leaving our constituents without a safety net."

According to Lexology, neither the House nor Senate as of Thursday had introduced legislation to delay the DSH payment cuts (Diamond, "Pulse," Politico, 9/29; Diamond, "Pulse," Politico, 9/28; Kaiser Family Foundation analysis, 9/6; Mahoney, Healthline, 9/28; Ghose, Dayton Business Journal, 9/28; Weixel, The Hill, 9/28; AHA News, 9/28; Yood/Grushkin, Lexology, 9/28).

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