Medicaid DSH Payment Adjustment Fairness Act of 2021

This bill allows for the use of a certain prior methodology relating to the calculation of Medicaid disproportionate-share hospital (DSH) payment limits. (DSHs are hospitals that receive additional payment under Medicaid for treating a large share of low-income patients.)

Under current law, effective October 1, 2021, costs and payments associated with services furnished to Medicaid-eligible individuals for whom Medicaid is not the primary payer are excluded from the calculation of DSH payment limits. However, for DSHs that provide a high volume of care to individuals who are entitled to Medicare and Supplemental Security Income (SSI) benefits, payment limits are calculated based on either the methodology in place as of January 1, 2020, or as in place on October 1, 2021, whichever is higher. The bill extends this option to all DSHs, not just those with a high volume of care for Medicare-SSI individuals.