Association Urges MedPAC to Consider Alternatives to ‘Flawed’ Safety-Net Index

America's Essential Hospitals has urged the Medicare Payments Advisory Commission (MedPAC) to consider alternative mechanisms to the proposed Medicare Safety-Net Index (MSNI) when recommending changes to disproportionate share hospital (DSH) and uncompensated care payments.

In a Jan. 14 comment letter, the association shared its concerns with the commission's draft recommendations, in which the commission considered increasing DSH and uncompensated care payments by $1 billion while calculating distributions using the MSNI formula. The commission is slated to vote on the recommendation at their upcoming meeting from Jan. 15-16.

The association urges MedPAC to consider instead using the designation criteria proposed in the 118th Congress' Reinforcing Essential Health Systems for Communities Act (H.R. 7397) as an alternative to the MSNI.

The MSNI measure seeks to identify hospitals that are key sources of care for low-income Medicare beneficiaries and target resources towards these hospitals. However, MedPAC's own 2024 analysis found that, under an MSNI policy, hospitals with large shares of Medicaid and uninsured patients would receive less Medicare revenue.

While thanking the commission for their interest in increasing federal funding for and recognizing "the inadequacy of current Medicare payments to safety net hospitals," the association noted the MSNI's failure to account for "all types of low-income patients," and urges policymakers to "supplement rather than redistribute" existing DSH and uncompensated care payments.

Contact Director of Policy Rob Nelb, MPH, at [email protected] or 202.585.0127 with questions.