Reforming the Medicaid Disproportionate Share Hospital Program

Since 1991, three Federal laws have sought to reform the Medicaid disproportionate share hospital (DSH) program, which is designed to help safety net hospitals. This article provides findings from a 40-State survey about Medicaid DSH and supplemental payment programs in 1997. Results indicate that the overall size of the DSH program did not grow from 1993 to 1997, but the composition of DSH revenues and expenditures changed substantially: A much higher share of the DSH funds were being paid to local hospitals and relatively less was being retained by the States. The study also revealed that large differences in States' use of DSH still persist.