As the country moves forward with the implementation of the Affordable Care Act, safety-net hospitals fear what the early days of the new-reality of American healthcare could mean to their operating budgets. Disproportionate Share payments to hospitals that serve the indigent will be severely curtailed on October 1, the same day that people will be able to enroll in expanded coverage from Medi-Cal. However, millions of dollars per hospital could be on the line.

Many safety-net hospitals operate with little financial margin of error. Losing the DSH payments before other sources of revenue commence could leave the hospitals searching for a way to cover shortages either through reduced services or increased fees on those with coverage. In San Diego, eight hospitals receive more than $5 million in DSH payments per year and at least once hospital receives 14.6 percent of their annual revenues from DSH payments.

One of the intents of the ACA and the resulting expansion of Medi-Cal and Medicare is that fewer people will be without coverage, making the DSH payments unnecessary. However, with the lack of overlap in funding, it remains to be seen how the funding formulas will work out.

Read the full article at the U-T San Diego.