Health Reform WK-EDGE Wrap Up, CHILDREN’S HEALTH INSURANCE PROGRAM (CHIP)—NEWS: CHIP and DSHs face difficult financial roads without quick congressional move, (Oct. 4, 2017)
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Wednesday, October 4, 2017

Health Reform WK-EDGE Wrap Up, CHILDREN’S HEALTH INSURANCE PROGRAM (CHIP)—NEWS: CHIP and DSHs face difficult financial roads without quick congressional move, (Oct. 4, 2017)

By Bryant Storm, J.D.

Without congressional action, authorization for the Children’s Health Insurance Program ended on September 30, 2017, with the end of fiscal year (FY) 2017. Cuts to disproportionate share hospital (DSH) payments also took effect on October 1, 2017. With the authorization lapse and cuts taking effect, states face budget shortages in their attempts to keep the CHIP program solvent and DSHs, which already operate on tight budgets, will be exposed to greater financial strain. A number of other health care related provisions also lapsed on September 30, 2017, due to Congress inaction, according to a Congressional Research Service (CSR) report.

Action. On September 28, 2017, the Energy and Commerce Committee announced that it would markup a bill to extend funding to the CHIP program on October 4. On the same day, members of Congress authored a letter to House Speaker Paul Ryan (R-Wis) and Democratic Leader Nancy Pelosi (D-Calif) expressing concerns regarding the impact of the DSH cuts and calling for congressional action.

DSH cuts. Stakeholders have made ongoing attempts to procure action from Congress to delay the DSH cuts. On September 18, nine hospital organizations urged lawmakers to further delay the start of Medicaid DSH cuts authorized by Section 2551 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) (see Hospital organizations again advocate for delay of Medicaid DSH reductions, September 19, 2017). The cuts would have gone into effect in 2014 but legislation delayed the reduction. The reduced payments were designed to account for decreases in uncompensated care, yet, DSHs warn that planned increases in coverage rates under the ACA have not been realized, exposing providers to unfair payment reductions.

CHIP. Although the impact of a delay in CHIP reauthorization will differ from state to state, a Kaiser Family Foundation analysis revealed that "states would face budget pressures, children would lose coverage, and implementation of program changes could result in increased costs and administrative burden for states" if Congress does not reauthorize the CHIP program by the end of FY 2017 (see States face budget shortages if Congress doesn’t extend CHIP funding, September 11, 2017).

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