Federal Court Rejects Medicare DSH Regulation

The federal government must include uninsured patients that hospitals serve under state Medicaid waivers when calculating hospitals’ Medicare DSH payments, a federal court has ruled. In the case of Baylor All Saints Medical Center, et al. v. Xavier Becerra, federal policymakers had invoked a 2023 regulation that excluded counting care provided to patients serve by DSH-eligible hospitals providing care through state Medicaid waivers – generally, through uncompensated care pools.  A group of DSH-eligible hospitals in Texas sued over the regulation because its implementation reduced their Medicare DSH funding – money intended to help hospitals that care for especially large numbers [...]