Glossary

Disproportionate Share Hospital Adjustment (DSH)

An increased payment under Medicare’s prospective payment system or under Medicaid for hospitals that serve a large share of low-income uninsured patients. The Affordable Care Act (ACA) reduced DSH allotments under the assumption that many formerly uninsured patients will gain coverage from Medicaid or the ACA marketplaces. The law also altered how DSH funds are allocated to hospitals. Effective for discharges occurring during or after FY 2014, hospitals receive 25 percent of the amount they previously would have received under the current statutory formula for Medicare DSH. The remainder, equal to 75 percent of what would have been paid as Medicare DSH, is available for an uncompensated care payment after the amount is reduced for changes in the percentage of uninsured individuals.