Our Partner SNI

Federal Policy

Advocating for Public Health Care Systems

CAPH works with leaders of the California congressional delegation to advance issues impacting public health care systems.

Priority Issues

See below for a brief overview of priority issues:

Medicaid DSH

The Disproportionate Share Hospital (DSH) Program, a Medicaid supplemental payment program, was established to reimburse hospitals for some of the uncompensated care costs associated with providing inpatient hospital services to Medicaid beneficiaries and individuals without insurance. In California, DSH provides more than $1.3 billion in federal funding to public health care systems each year. Public health care systems use DSH funds to increase access to preventive services and care coordination for individuals without insurance and assist with certain uncompensated costs in Medicaid.

As part of the Affordable Care Act (ACA), Congress instituted scheduled cuts to the DSH program that were supposed to begin in 2014. CAPH played an important role in Congress’ decision to delay or eliminate the cuts from the prior years and is now working to prevent the $8 billion in annual scheduled DSH cuts in FY 2024-2027 from taking effect. CAPH is also actively seeking a legislative fix to ensure that Medicaid patients with third-party coverage can be included in the calculation of hospital specific DSH allotments, which include some of our most costly and complex Medicaid beneficiaries. Given the uncertainty of DSH and the constant threat of cuts, CAPH remains committed to protecting DSH funding so that public health care systems can continue to provide those at-risk with more coordinated and higher value care.

The Affordable Care Act and Access to Care 

The ACA offered an unprecedented expansion of insurance coverage for Californians with low incomes. Medicaid enrollment in California increased from 8.6 million prior to the ACA to over 14.6 million in 2022 and continues to increase with state-based coverage expansion efforts. The ACA provided a stable coverage landscape that enabled a shift from costly acute care to more cost-effective primary and preventive care services. Systems were better able to focus on improved health outcomes, quality, care and efficiency – providing the right care in the right place at the right time and with better care coordination. With these programs, California’s public health care systems emerged as leaders in ACA implementation and delivery system transformation and continue to be on the forefront of these efforts. With federal threats to dismantle Medicaid, CAPH is steadfast in its support of maintaining coverage expansion.

340B Program

Established in 1992, 340B is a federal program that requires the pharmaceutical industry to provide drug discounts to safety net providers, as a condition of participation in Medicaid. As major Medicaid providers, public health care systems provide substantial uncompensated and unreimbursed care.  The discounts offered through the 340B program help them fulfill their safety mission. Public health care systems use these discounts to support their efforts to improve care for all patients, including specialized programs for specific populations. These programs include hepatitis and HIV clinics, post-operative services, infusion treatments for select conditions, and increased access to medication for uninsured patients. CAPH remains committed to protecting the integrity of 340B to ensure that safety net providers can continue to access pharmaceuticals at a discounted rate, and we are closely monitoring state and federal activity in this area. 

COVID-19 Funding

CAPH has been working closely with leaders at the state and federal levels to help secure critical funding for public health care systems’ COVID-19 response effort. Since the start of the pandemic, CAPH advocated for several federal funding sources, including Provider Relief Funds, Federal Emergency Management Agency support, and an extension of California’s 1115 Medicaid Waiver. As new variants emerge, CAPH remains focused on COVID-19 funding as a key priority to help support our members and the millions of patients they serve.

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Fast Facts

CA’s public health care systems serve over 3.7 Million patients each year.