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Federal Budget Deal Provides Relief, Albeit Temporary

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News over the weekend that federal legislators reached a deal to continue funding the government for the next 45 days is welcome for hospitals on a couple of fronts.  

First, the continuing resolution delays Medicaid disproportionate share hospital (DSH) cuts that were scheduled to go into effect Oct. 1. While that’s a positive development for the many California hospitals that rely on DSH funding for vital resources needed to care for patients (these payments provide more than $1.3 billion annually in federal funding to safety net hospitals in California) the grace period lasts only as long as the resolution, until Nov. 17. 

That means California hospital leaders still have an opportunity to make their voices heard with federal legislators ahead of further debate on this issue. A CHA alert issued in September has details on how you can share your concerns about DSH cuts with your federal representatives.  

Second, the continuing resolution includes $16 billion in Federal Emergency Management Agency funding for disaster relief. 

While it is expected that these funds will largely go to places like Hawaii and Florida to support recovery from recent natural disasters, the resolution means FEMA will continue to operate as normal for the next 45 days, providing time to process outstanding claims from California hospitals still lingering from the COVID-19 pandemic. As of September, California hospitals had applied for more than $2.5 billion in assistance, but only $910 million of that has been obligated. 

And as you know, the passage of this continuing resolution has led to a tectonic change for Congress and for California. With the House Speaker’s office now vacant, it is the first time in 20 years that the House Speaker, Majority Leader, and/or Minority Leader is not from California. 

The short-term nature of this deal underscores the importance of making sure policymakers know where hospitals stand as they discuss these priority issues. Inclusion of the DSH cut delay in the continuing resolution, for example, signals that the issue is important to lawmakers as we prepare for more negotiation ahead of the Nov. 17 expiration. Now we must make sure that the delay is extended beyond Nov. 17. 

If you haven’t already, please reach out to members of Congress, both on the DSH cuts and to ask that they protect Medicare payments during any budget conversations