Tennessee hospitals would share an additional $53 million a year in federal Medicaid funds under a special provision of a major health care bill that passed the House on Thursday, reports The Tennessean.
If the measure becomes law, Tennessee will no longer be the only state in the nation ineligible for the extra funding intended to help reimburse hospitals for providing care to people that aren’t able to pay.
The Tennessee-specific provision was endorsed by the Tennessee Hospital Association and the entire Tennessee congressional delegation.
The nonpartisan Congressional Budget Office estimates that adding Tennessee to the formula — known as disproportionate share or DSH — would cost about $500 million over 10 years. The formula also requires $27 million in matching funds from the state of Tennessee, for a total of $80 million a year for the state’s hospitals.
The delegation argued it was a matter of equity and fairness with other states.
“Tennesseans aren’t asking for special treatment or carve-outs. Our providers simply want access to the same resource that providers in 49 other states have,” said Rep. Diane Black, R-Gallatin.
Tennessee in 1994 transformed its Medicaid into TennCare and stopped receiving the DSH payments because it expected indigent care would be covered by TennCare. That “coverage experiment” ended in 2005, according to a letter the delegation wrote to House leaders earlier this month, prompting Tennessee to try and get back into the DSH formula.
Each hospital’s portion of the money is based on how much indigent care they provided in the previous year.