Looming loss of DSH payments could sink Georgia hospitals further

Medicaid expansion seen as a solution
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Hospitals in much of Georgia continue to struggle, and the scheduled disappearance of the Disproportionate Share Hospital (DSH) supplementary payment will likely make the financial situation worse, Atlanta Magazine reported.

DSH payments are expected to be phased out in early 2018, and many hospitals in Georgia, particularly smaller rural facilities, are heavily dependent on the extra cash.

"A very large part of the rural hospital population is losing money and is financially distressed," Hometown Health CEO Jimmy Lewis told Atlanta Magazine. "The loss of DSH in Georgia won't be a good thing." Hometown Health is a consortium of rural providers in the Peach State.

Georgia's hospitals have been hit hard by a variety of issues, including high levels of uncompensated care and the decision by lawmakers not to expand Medicaid eligibility as part of the Affordable Care Act--the DSH payment is being phased out due to the expansion--and even mismanagement of a facility by a local car dealership.

The state has tried a variety of methods to try and combat the financial ills plaguing the state's rural healthcare facilities, including standalone emergency rooms and even regional hub-and-spoke systems intended to preserve access to healthcare services for rural residents.

But even larger urban providers could be hit hard by the loss of the DSH payments. Grady Memorial Hospital in Atlanta may have to shutter its unit that cares for patients with mental health issues. It's Georgia's largest such unit outside of the state's prison system.

Ultimately, simply expanding Medicaid eligibility would be the solution to many of the state's woes. "The sooner Georgia acts, the better off it'll be," Tim Sweeney, deputy director of policy for the Georgia Budget and Policy Institute, told Atlanta Magazine. "It addresses the coverage issue and it brings $3 billion into state's healthcare system. If hospitals weren't getting paid to deliver care, this would pay them. In the long term, it's delivering care in lower cost settings than hospitals."

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