State

(7) Medicaid DSH reductions (A) Reductions (i) In general For the period beginning March 9, 2024 , and ending September 30, 2024 , and for each of fiscal years 2025 through 2027, the Secretary shall effect the following reductions: (I) Reduction in DSH allotments The Secretary shall reduce DSH allotments to States in the amount specified under the DSH health reform methodology under subparagraph (B) for the State for the fiscal year or period. (II) Reductions in payments The Secretary shall reduce payments to States under section 1396b(a) of this title for each calendar quarter in the fiscal year or period, in the manner specified in clause (iii), in an amount equal to ¼ of the DSH allotment reduction under subclause (I) for the State for the fiscal year or period. (ii) Aggregate reductions The aggregate reductions in DSH allotments for all States under clause (i)(I) shall be equal to $8,000,000,000 for the period beginning March 9, 2024 , and ending September 30, 2024 , and for each of fiscal years 2025 through 2027. (iii) Manner of payment reduction The amount of the payment reduction under clause (i)(II) for a State for a quarter shall be deemed an overpayment to the State under this subchapter to be disallowed against the State’s regular quarterly draw for all spending under section 1396b(d)(2) of this title . Such a disallowance is not subject to a reconsideration under subsections (d) and (e) of section 1316 of this title . (iv) Definition In this paragraph, the term “State” means the 50 States and the District of Columbia. (v) Distribution of aggregate reductions The Secretary shall distribute the aggregate reductions under clause (ii) among States in accordance with subparagraph (B). (B) DSH Health Reform methodology The Secretary shall carry out subparagraph (A) through use of a DSH Health Reform methodology that meets the following requirements: (i) The methodology imposes the largest percentage reductions on the States that— (I) have the lowest percentages of uninsured individuals (determined on the basis of data from the Bureau of the Census, audited hospital cost reports, and other information likely to yield accurate data) during the most recent year for which such data are available; or (II) do not target their DSH payments on— (aa) hospitals with high volumes of Medicaid inpatients (as defined in subsection (b)(1)(A)); and (bb) hospitals that have high levels of uncompensated care (excluding bad debt). (ii) The methodology imposes a smaller percentage reduction on low DSH States described in paragraph (5)(B). (iii) The methodology takes into account the extent to which the DSH allotment for a State was included in the budget neutrality calculation for a coverage expansion approved under section 1315 of this title as of July 31, 2009 .

Source

42 USC § 1396r-4(f)(7)


Scoping language

In this paragraph
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