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Hospitals in states that have refused to take the Medicaid expansion offered under the Affordable Care Act have been in a panic in recent months over the pending loss of funding they were supposed to suffer with the implementation of the law. As the law is written, Medicaid funding to states to pay hospitals that treat a large number of uninsured residents was going to be reduced as those uninsured people were absorbed into Medicaid and the insurance exchanges. But that was before the Supreme Court stepped in and said states could refuse the additional Medicaid funding.

Because the problem of uncompensated care won't be going away for those hospitals in red states, the administration has proposed delaying cuts in those states by not penalizing them for the next two years. They'll continue to receive funding based in part on the percentage of the state's population that is uninsured.

An official at the Washington trade group representing safety-net hospitals praised the Obama administration for wanting to take the time to analyze the first couple of years of the health law’s coverage expansion.

“Our first reaction is that [CMS] is being very cautious in how that Supreme Court decision might impact the effects of the DSH cut,” said Beth Feldpush, vice president for advocacy and policy at the National Association of Public Hospitals and Health Systems, adding that the group had been “extremely concerned” about the level of DSH cuts, even before the Supreme Court decision added further uncertainty.

Of course, the proposal has its critics. Namely Republican members of Congress from states that have refused by the expansion, like Rep. Bill Cassidy (R-LA). He's pissed because, while he was opposed the expansion and supports his state's decision to refuse it, other states will be getting the funding: “This decision will harm vulnerable patients in those states by imposing a net decrease of federal dollars for indigent care while providing a net increase to other states via the Medicaid expansion." The simple solution for that, of course, is for his state to take the damn expansion money and take care of the vulnerable patient he's pretending to care about.

Originally posted to Joan McCarter on Tue May 14, 2013 at 10:24 AM PDT.

Also republished by Daily Kos.

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