Coordination and Maintenance Committee Meeting: Highlights and Takeaways

Hey, folks, now's the time when we walk over to the Talk 10 Tuesday news desk, and we welcome our good friend, Tim Powell.

And good morning, Tim.

Good morning, Chuck.

And today, I'm going to ask, do 340B eligibility rules still measure hospital need? Yes.

So Medicaid coverage changes SSI and Medicaid ratios can reduce the eligibility hospitals while they're facing a greater challenge from uncompensated care.

So I would argue that Congress should revisit how hospitals qualify for the 340B drug discounts.

H.R. 1's Medicaid changes and court decisions affecting supplemental security income, or SSI fractions, expose a weakness in the eligibility formula.

A hospital can serve more financially vulnerable patients while its qualifying percentage falls.

The program's safety net purpose remains relevant, but its measure is in need of reconsideration.

So what are the current measure thresholds? Hospitals qualifying through the disproportionate share or dish category generally need a Medicare dish adjustment percentage above 11.75%, and rural referral centers or rural soul communities need at least 8%.

Critical access hospitals don't have a dish percentage, but they automatically qualify.

Government status or qualifying nonprofit relationships and other requirements may also apply.

So HRSA generally applies these thresholds to the most recently filed Medicare cost report, so changes in coverage and utilization may affect eligibility after a delay.

These thresholds concern the dish payment adjustment, not simply the underlying patient percentage.

The patient percentage combines the Medicare SSI fraction and the share of total inpatient days attributable to Medicaid eligible patients without Medicare Part A, and uninsured care does not increase either numerator merely because the patients cannot pay.

So how Medicaid changes increase the risk.

H.R. 1 enacted in July 4th of 2025 establishes a work or community engagement requirement for certain Medicaid adults.

generally beginning January of 2027.

It also requires six-month eligibility renewals for most expansion adults and restricts provider taxes and state-directed payments.

Implementation schedules vary, but the combined effect can reduce coverage and hospital financial support.

The 340B consequence is indirect.

When a patient loses Medicaid eligibility but continues receiving hospital care, formerly qualifying days may now become uninsured days.

the Medicaid fraction can decline as uncompensated care increases.

Financing restrictions create additional pressure without necessarily changing the day count, and H.R. 1 did not reduce the hospital dish eligibility thresholds.

So why does the SSI fraction matter? In April of 2025, the Supreme Court's Advocate Christ Medical Center versus Kennedy decision upheld counting Medicare patients in the SSI numerator only when they're entitled to SSI cash payments for the hospitalization month.