A wide-ranging bill passed by the Senate Finance Committee would eliminate $16 billion in Medicaid disproportionate share (Medicaid DSH) payments over the next two years.

The Better Mental Health Care, Lower-Cost Drugs, and Extenders Act, passed by the committee with unanimous, bipartisan support, also seeks to improve access to mental health care for Medicare patients living in rural and underserved areas; improve access to behavioral health services via telehealth for Medicaid and CHIP beneficiaries; reduce some of the recently adopted cuts in Medicare payments to physicians that will take effect in 2024; toughen federal regulations governing pharmacy benefit managers (PBMs); and more.

The Senate Finance Committee’s section-by-section summary of its bill describes the Medicaid DSH proposal as follows:

This provision further amends the Medicaid Disproportionate Share Hospital reductions by eliminating the reductions for FY 2024 and FY 2025.  The reductions for FY 2026 and FY 2027 would be unchanged.  The aggregate reduction amount from FY 2024 to FY 2027 would decrease from $32.0 billion under current law to $16.0 billion.

Learn more from the committee’s section by section summary of the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act and the Fierce Healthcare article “Senate votes to reform PBMs again, stop $16B in hospital cuts.”