H.R. 5064 — Save our Safety-Net Hospitals Act of 2025

This section revises limitations on Medicaid disproportionate share hospital (DSH) payment adjustments attributable to uncompensated care costs under SSA section 1923(g) for state plan rate years beginning on or after the date of enactment. (DSH payments provide federal matching funds to states for supplemental payments to hospitals serving disproportionate shares of low-income patients to help cover uncompensated care.) Specifically, the amendments to paragraph (1) (1) eliminate the prior exclusion of hospitals described in former paragraph (2)(B); (2) expand offsets against uncompensated care costs to include payments under Medicare (title XVIII) or by an applicable plan (as defined in SSA section 1862(b)(8)(F)); and (3) add as qualifying patients individuals eligible for Medicaid (under the state plan or waiver) for whom Medicaid is payor after Medicare or applicable plan benefits, but only if the hospital's aggregate costs for such services exceed payments received during the year. The amendments also strike former paragraph (2), redesignate paragraph (3) as paragraph (2), and update cross-references therein. (Thus, the revised limitations—which reduce allowable DSH payments by accounting for additional third-party payments—apply to a broader set of hospitals.) Additionally, states may elect to apply unspent portions of DSH allotments from state plan rate years beginning after October 1, 2021, and before enactment to increase DSH payments for those years consistent with the revised limitations (without exceeding the applicable allotment under subsection (f)); states may not recoup prior payments made under the prior limitations; states may seek Secretary approval for retroactive state plan, waiver, or amendment modifications solely for this purpose (provided before the independent certified audit deadline under subsection (j)(2)); and states must report any such increases in their next annual DSH report under subsection (j)(1).