When an 84-year-old woman has a stroke at home in Albany at 3 a.m. and the EMTs bring her to Phoebe Putney Memorial Hospital, when a 9-year-old child without insurance is hit by a car in DeKalb County and is rushed to Grady Memorial Hospital's pediatric emergency room, when a 32-year-old woman with high-risk pregnancy delivers prematurely at Memorial Health in Savannah and her newborn spends six weeks in the neonatal intensive care unit, when a 56-year-old man with Medicaid suffers a massive heart attack near Gainesville and is admitted to Northeast Georgia Medical Center, the hospital absorbing the care is almost always a safety-net hospital. Safety-net hospitals are the institutions that, by mission or by geography or by ownership structure, end up caring for a disproportionate share of low-income patients, including Medicaid beneficiaries (whose Medicaid payments rarely cover the full cost of care) and uninsured patients (who often cannot pay at all). The financial pressure of caring for these populations would, without federal Medicaid support, force most safety-net hospitals to dramatically reduce services or close. The federal program that prevents that collapse is the Disproportionate Share Hospital (DSH) payment.

DSH was created by the Omnibus Budget Reconciliation Act of 1981 (OBRA 1981) and is codified at Section 1923 of the Social Security Act. The basic concept is straightforward: states must include in their Medicaid payments an adjustment for hospitals serving a disproportionate share of low-income patients. The implementation is layered. Each state receives an annual federal DSH allotment under Section 1923(f), a cap on the federal share of DSH payments for the state. Each qualifying hospital has a hospital-specific DSH limit under Section 1923(g), which caps that hospital's DSH payment at the hospital's uncompensated care cost for Medicaid (the Medicaid shortfall) and uninsured patients. Federal regulations at 42 CFR Part 447 Subpart E specify the calculation methodology, the audit requirements, and the reporting standards. CMS issues State Medicaid Director Letters and Informational Bulletins providing additional guidance. The HHS Office of Inspector General audits state DSH programs for compliance. The CMS DSH Audit Rule at 42 CFR 447.299 codified the independent audit requirement after years of OIG findings.

Georgia operates a substantial DSH program supporting safety-net hospitals across the state. The program is administered by the Department of Community Health (DCH) and is funded through a combination of state general revenue, the Indigent Care Trust Fund, the Hospital Provider Assessment, and federal Medicaid matching at the state's FMAP. DSH payments flow to qualifying hospitals including Grady Memorial Hospital, Children's Healthcare of Atlanta, Memorial Health, Medical Center Navicent Health, Phoebe Putney Health System, Augusta University Medical Center, Northeast Georgia Medical Center, and many rural and critical access hospitals. The DSH program is intertwined with Upper Payment Limit (UPL) supplemental payments and the Hospital Provider Payment Program (HPPP) to create a complex financing structure that substantially supplements regular Medicaid hospital payments.

This guide translates Georgia's DSH program for families and policy followers. It explains the federal statutory and regulatory framework, the state allotment system, the hospital-specific limit, the calculation of uncompensated care, the audit and reporting requirements, the ACA-related DSH reductions and their repeated congressional delays, and the broader policy debate about DSH's future. It describes Georgia's implementation through the Indigent Care Trust Fund, the Hospital Provider Assessment, and DCH's hospital payment methodologies. It identifies the major Georgia safety-net hospitals supported by DSH and explains why DSH matters for the families who depend on these hospitals. It ends with worked examples, a frequently asked questions section, and a list of phone numbers families need. Brevy publishes this guide because DSH is invisible to most families until a safety-net hospital is at risk of closure, and at that point the family suddenly cares enormously about the financing mechanism that has been quietly supporting that hospital for decades.

The federal statutory foundation

DSH originated in OBRA 1981, the Reagan administration's first major budget reconciliation. Section 1923 of the Social Security Act, added by OBRA 1981, required state Medicaid programs to "take into account" the situation of hospitals serving a disproportionate share of low-income patients when setting Medicaid payment rates. The original statutory language was loose and gave states broad discretion.

States responded by developing DSH programs that ranged from modest payments to large supplemental payment streams. Some states developed DSH structures that drew substantial federal matching funds for relatively modest state outlays, including by recycling provider donations or intergovernmental transfers back to the donating providers. The federal Medicaid program perceived the structures as inflating federal share without meaningfully supporting safety-net hospitals.

The Omnibus Budget Reconciliation Act of 1993 (OBRA 1993) made fundamental changes. It established the hospital-specific limit at Section 1923(g) capping each hospital's DSH payment at the hospital's uncompensated care cost for Medicaid (Medicaid shortfall) and uninsured patients. It tightened the qualification criteria for "deemed" disproportionate share hospitals at Section 1923(e). It required state DSH methodologies to be specified in the State Plan. It required annual reporting.

The Balanced Budget Act of 1997 (BBA 1997) added state DSH allotment caps at Section 1923(f). Each state was assigned a base DSH allotment with annual adjustments, capping federal share growth.

The Medicare Modernization Act of 2003 (MMA) authorized states to use the federal medical assistance percentage (FMAP) for DSH payments rather than the prior 50/50 split. This increased federal participation, particularly for low-FMAP states.

The Affordable Care Act (ACA) scheduled substantial DSH reductions starting in fiscal year 2014. The logic was that Medicaid expansion would reduce uncompensated care and thus reduce the need for DSH. The scheduled reductions have been repeatedly delayed by Congress through Consolidated Appropriations Acts. The current schedule has been deferred to later fiscal years through recent appropriations legislation.

Federal DSH allotment

Each state's federal DSH allotment under Section 1923(f) is calculated annually using a formula specified in the statute and CMS implementing regulations. The formula uses a base allotment for the state and applies inflation adjustments. The allotment is the maximum federal share of DSH payments for that state. The state can spend its own funds beyond the federal allotment, but receives no federal match beyond the cap.

Each state's allotment is published annually by CMS. Georgia receives a substantial annual DSH allotment commensurate with its size, its Medicaid population, and its uninsured population. The exact dollar amount for any given year is available in CMS public documents.

When the ACA's DSH reductions are eventually implemented (rather than delayed further), state allotments will decrease. The reductions vary by state based on multiple factors including the state's uninsured rate, the state's DSH targeting to qualifying hospitals, and the state's Medicaid expansion status. Non-expansion states (including Georgia) generally face somewhat smaller reductions than expansion states because their uncompensated care has not declined as much.

Hospital qualification

A hospital qualifies as a disproportionate share hospital under federal Medicaid law if it meets one of two tests under Section 1923(b):

Medicaid inpatient utilization rate test: The hospital's Medicaid inpatient days as a percentage of total inpatient days significantly exceeds the state average.

Low-income utilization rate test: The hospital's low-income utilization rate (a composite of Medicaid revenue plus other public assistance revenue plus charity care divided by total revenue) exceeds a federally defined threshold.

States may also designate additional DSH hospitals using state-defined criteria, as long as the additional hospitals serve substantial low-income populations.

Section 1923(d) requires DSH-eligible hospitals to meet obstetric staffing criteria (with exceptions for children's hospitals, hospitals not offering obstetric services before December 1987, and rural hospitals with limited obstetric availability).

Section 1923(e) requires that public hospitals and certain governmentally-owned hospitals be "deemed" disproportionate share hospitals when they meet specific criteria.

The hospital-specific DSH limit

The hospital-specific DSH limit at Section 1923(g) is the most important constraint on DSH payments. Each hospital's total DSH payment cannot exceed the hospital's uncompensated care cost during the relevant reporting period.

Uncompensated care cost has two components:

Medicaid shortfall: the difference between the hospital's cost of providing services to Medicaid beneficiaries and the Medicaid payments received for those services. If Medicaid pays 70 percent of cost, the Medicaid shortfall is 30 percent of cost.

Uninsured cost: the cost of services provided to uninsured patients, minus any payments received from those patients or from non-Medicaid third-party payers.

Both components are calculated at cost rather than at charges, using the hospital's Medicare cost report data and additional documentation. The methodology is technical and is subject to detailed regulations at 42 CFR 447.297 to 447.299.

If a hospital's DSH payment plus other Medicaid payments exceeds the hospital-specific limit, the excess must be recouped. The CMS-required independent audit verifies compliance.

Federal regulations

The DSH regulations are at 42 CFR Part 447 Subpart E:

42 CFR 447.297 defines the hospital-specific DSH limit and the uncompensated care cost calculation.

42 CFR 447.298 specifies the methodology for calculating Medicaid shortfall and uninsured cost.

42 CFR 447.299 requires annual independent audits of state DSH programs and specifies reporting requirements. The 2008 CMS DSH Audit Rule codified the independent audit requirement.

42 CFR 447.300 addresses compliance with the hospital-specific limit.

42 CFR 447.301 specifies state plan methodology requirements.

42 CFR 447.302 specifies the calculation of state DSH allotments.

CMS State Medicaid Director Letters and Informational Bulletins provide additional guidance on implementation, audit, and reporting.

OIG audit history

HHS OIG has audited state DSH programs extensively over decades. Common audit findings include:

  • DSH payments exceeding the hospital-specific limit
  • Inaccurate calculation of uncompensated care costs
  • Inclusion of ineligible costs in the limit calculation
  • Failure to count third-party payments that reduce uncompensated care
  • Inadequate documentation
  • Inconsistent treatment of physician costs versus hospital costs

OIG findings have driven state recoupments totaling hundreds of millions of dollars across multiple states. The CMS DSH Audit Rule responded to OIG concerns by requiring independent audits of state DSH programs.

MACPAC, the federal advisory commission on Medicaid, has issued multiple reports on DSH including analyses of state allotment methodology, hospital-specific limit calculation, and ACA DSH reduction implementation.

Georgia DSH implementation

Georgia operates DSH through DCH in coordination with several state structures.

Indigent Care Trust Fund

The Indigent Care Trust Fund is a Georgia statutory mechanism that collects revenue from various state sources and pays out for indigent care at Georgia hospitals. The Trust Fund is one of the financing structures that supports the state share of DSH payments. State contributions to the Trust Fund draw federal DSH matching at the state's FMAP.

Hospital Provider Assessment

Georgia's Hospital Provider Assessment is a tax on hospital revenue (sometimes called a hospital bed tax) that collects revenue from Georgia hospitals. Assessment revenue is deposited in a state fund and is used as the state share for federal Medicaid matching, including the state share for DSH and for Upper Payment Limit (UPL) supplemental payments.

The Hospital Provider Assessment is a critical financing mechanism. Without it, Georgia would have to fund the state share of DSH and UPL from general revenue, which would be politically and budgetarily difficult. The Assessment effectively lets hospitals collectively fund the state share, which then draws down federal matching that flows back (with the Medicaid program also receiving its share).

Provider taxes are subject to federal limits at Section 1903(w) of the Social Security Act, which requires that provider taxes be broad-based, uniform, and not directly tied to Medicaid payments (the "hold-harmless" requirement). CMS has issued detailed guidance on the provider tax rules. Georgia's Hospital Provider Assessment is structured to comply with these federal requirements.

Methodology

Georgia's DSH methodology is specified in the Medicaid State Plan. The methodology describes:

  • Hospital qualification criteria (Section 1923(b) deemed criteria plus any state-defined additional criteria)
  • Calculation of each hospital's DSH payment
  • Coordination with the Indigent Care Trust Fund
  • Coordination with provider assessment revenue
  • Reporting and audit requirements

DSH payments are typically calculated based on the hospital's Medicaid utilization, the hospital's Medicaid shortfall, the hospital's uninsured patient costs, and other factors. The total DSH payment for each hospital cannot exceed the hospital-specific limit.

Upper Payment Limit (UPL) supplemental payments

Alongside DSH, Georgia operates UPL supplemental payment programs. UPL is a separate Medicaid payment authority allowing states to pay providers up to the upper payment limit (essentially what Medicare would have paid for the same services). UPL payments are not DSH and are not subject to the DSH allotment, but they draw federal matching and support hospital financing.

DSH and UPL together substantially supplement regular Medicaid hospital payments to safety-net and high-Medicaid-volume hospitals.

Hospital Provider Payment Program (HPPP)

Georgia's Hospital Provider Payment Program is the combined mechanism through which the Indigent Care Trust Fund, the Hospital Provider Assessment, DSH, UPL, and other Medicaid supplemental payment authorities flow federal matching funds to Georgia hospitals. The mechanism is technical and the details are documented in DCH provider manuals.

Georgia safety-net hospitals

Grady Memorial Hospital (Atlanta)

Grady is the flagship public hospital in Georgia. Grady is owned by the Hospital Authority of Fulton County and DeKalb County, governed by a Hospital Authority board with members appointed by the participating counties and the Grady Health Foundation. Grady serves a disproportionate share of Medicaid and uninsured patients from the Atlanta metropolitan area. It operates one of the busiest emergency departments in the country, a Level I Trauma Center, a comprehensive burn center, a comprehensive stroke center, the largest infectious disease clinic in the Southeast, and the major teaching hospital affiliations for Emory University School of Medicine and Morehouse School of Medicine residency programs.

Grady receives substantial DSH payments. The DSH payments are essential to Grady's financial viability. Without DSH, Grady would face severe financial pressure that could affect its ability to maintain its trauma, emergency, and specialty services.

Children's Healthcare of Atlanta (CHOA)

CHOA is the major pediatric medical center serving Georgia. CHOA operates major facilities at Egleston, Scottish Rite, and the new Arthur M. Blank Hospital. CHOA provides complex pediatric specialty care including cardiology, oncology, neurology, transplant, and intensive care that is not generally available at community hospitals. Medicaid is a significant share of CHOA's patient mix because medically complex children frequently qualify for Medicaid through TEFRA/Katie Beckett, GAPP, or other pathways.

CHOA receives DSH payments related to its pediatric Medicaid population.

Memorial Health (Savannah)

Memorial is the major medical center in coastal Georgia, with a Level I Trauma Center and broad specialty services. Memorial historically was a public hospital owned by the Chatham County Hospital Authority. HCA Healthcare acquired Memorial. DSH eligibility may be affected by the public-to-private transition; verify current DSH receipts with publicly available documents.

Medical Center Navicent Health (Macon)

Navicent Health is the major medical center in Middle Georgia, serving a large region of Central Georgia with substantial Medicaid populations. Navicent merged with Atrium Health and is now part of the Atrium Health system.

Phoebe Putney Health System (Albany)

Phoebe Putney is the major medical center in Southwest Georgia, serving a large agricultural region with high Medicaid and uninsured populations. Phoebe Putney has expanded over the years through affiliations with other regional hospitals.

Augusta University Medical Center (Augusta)

AU Medical Center is the academic medical center associated with the Medical College of Georgia. It serves East Central Georgia with substantial Medicaid populations and supports the residency training programs of the medical school.

Northeast Georgia Medical Center (Gainesville)

NGMC is the major medical center for Northeast Georgia, serving a mixed urban-rural population with substantial Medicaid involvement. NGMC has expanded through affiliations and additional campuses.

Rural and critical access hospitals

Georgia has many rural and critical access hospitals that qualify for DSH. The rural hospital system has been under substantial financial stress, with multiple hospital closures over the past two decades (the Department of Community Health and various nonprofit reports document the closures). DSH payments are critical for the financial viability of remaining rural hospitals.

Critical access hospitals are designated by Medicare based on limited bed capacity and geographic remoteness from other hospitals. Critical access hospitals receive Medicare cost-based reimbursement, but Medicare cost-based reimbursement does not cover Medicaid or uninsured care, so DSH remains important for these hospitals.

The Affordable Care Act of 2010 scheduled significant DSH reductions, originally expected to begin in fiscal year 2014 (federal DSH reductions). The logic: Medicaid expansion would reduce uncompensated care, and reduced uncompensated care would reduce the need for DSH.

The scheduled reductions have been repeatedly delayed by Congress through Consolidated Appropriations Acts. Each delay extends the implementation by one or two fiscal years. The reductions have been delayed multiple times in the years since 2014.

Recent appropriations legislation continued the delays. As of 2026, federal DSH reductions are still scheduled but have been deferred to later fiscal years. Each year's appropriations decisions affect future allotments.

When the reductions are eventually implemented, state allotments will decrease. The reductions vary by state based on multiple factors. Non-expansion states (including Georgia) generally face somewhat smaller reductions than expansion states.

Georgia's hospital community follows the DSH reduction schedule closely. Hospital financial planning depends on the eventual implementation date and the size of the reductions. Hospital advocacy organizations (the Georgia Hospital Association nationally and state-specific organizations) lobby Congress for continued delays.

Family-facing implications

DSH is invisible to most families until something happens that brings them into a safety-net hospital. Here is what DSH means for families:

Hospital choice depends on financial viability. When you choose where to give birth, where to seek emergency care, where to receive specialty care, the available hospitals depend on financial viability. DSH supports the financial viability of safety-net hospitals. Without DSH, fewer hospitals exist or fewer services are offered.

Rural Georgia depends on rural hospitals. Many Georgia counties have only one hospital, and that hospital is often a critical access hospital serving a high-Medicaid and high-uninsured population. When a rural hospital closes, families lose access to emergency care, obstetric care, and basic acute care. The closest alternative may be 30 to 60 miles away.

Specialty care concentrates at academic and public hospitals. Complex pediatric care at CHOA, trauma care at Grady, transplant care at AU Medical Center, advanced cardiology and cancer care at multiple centers. These services exist where they exist because of financial viability supported by DSH and other supplemental payment programs.

Uninsured care depends on safety-net hospitals. If you or a family member is uninsured and needs care, you go to a safety-net hospital. DSH supports the hospital's ability to provide care without bankruptcy.

Insurance premiums and tax burdens reflect uncompensated care. When DSH is inadequate, hospitals shift uncompensated care costs to other payers (private insurance, local property taxes funding public hospital authorities). DSH is part of a broader financing ecology that affects everyone.

Worked examples

Eleanor, 78, Atlanta, stroke at Grady. Eleanor is dual eligible (Medicare and Medicaid) and lives in southwest Atlanta. At 3 a.m. on a Tuesday, she has a stroke at home. Her granddaughter, who lives with her, calls 911. EMTs arrive, assess her, and transport her to Grady Memorial Hospital, which is the closest Level I Trauma Center and Comprehensive Stroke Center. Grady's stroke team activates rapidly, gives her thrombolytic therapy within the time window, admits her to the neuro-ICU, and stabilizes her over the next 48 hours. She then transfers to the stroke step-down unit, then to the inpatient rehabilitation unit. Total length of stay: 18 days. Medicare pays the largest share of Grady's bill (Eleanor is Medicare-primary). Medicaid pays the secondary share (Medicaid as the wrap-around payer for the Medicare cost-sharing). The combined Medicare and Medicaid payments do not fully cover Grady's costs (Medicaid's payment rates for hospital services are below Grady's costs, creating a Medicaid shortfall). The shortfall is part of Grady's uncompensated care cost calculation that supports its DSH payment. Eleanor does not see this directly. She sees that Grady provided the care, that she had no out-of-pocket costs beyond her Medicare/Medicaid cost-sharing, and that the system worked. The system worked because of DSH.

Marcus, 45, Macon, auto accident at Medical Center Navicent Health. Marcus is uninsured. He works as a self-employed contractor and has not been able to afford health insurance. He is in a serious auto accident on I-75 and is transported to Medical Center Navicent Health. He has multiple fractures, internal bleeding, and a traumatic brain injury. He is in the ICU for two weeks and the hospital ward for another three weeks. Total bill: over $400,000. The hospital social worker helps Marcus apply for Emergency Medicaid (Georgia's coverage for emergency conditions for uninsured or non-citizen patients), which retroactively covers a portion of the acute emergency stay. The portion not covered by Emergency Medicaid is uncompensated care for Navicent. The uncompensated care portion of Marcus's case contributes to Navicent's annual DSH payment calculation. The DSH payment helps Navicent maintain operations and continue to be available for the next uninsured trauma patient.

Aisha, 32, Savannah, high-risk delivery at Memorial. Aisha has chronic kidney disease and lupus. Her high-risk pregnancy is managed at Memorial Health in Savannah. She delivers prematurely at 31 weeks. Her newborn spends six weeks in the Memorial Health NICU. Aisha is on pregnancy Medicaid (with twelve-month postpartum coverage under Georgia's adopted extension). Her baby is enrolled in Medicaid based on the mother's eligibility. Medicaid covers both Aisha's delivery and the baby's NICU stay. Memorial's Medicaid payments do not fully cover its costs (particularly for a complex NICU stay). The Medicaid shortfall is part of Memorial's uncompensated care cost calculation supporting Memorial's DSH payment.

Jamil, 8, Atlanta, pediatric specialty at CHOA. Jamil has a complex congenital heart defect. His cardiology, pulmonology, and complex care management is provided at Children's Healthcare of Atlanta. He has multiple surgeries, regular catheterizations, and ongoing specialty care. He is on Medicaid (through TEFRA/Katie Beckett, with parents' income too high for traditional Medicaid). CHOA's Medicaid payments do not fully cover the costs of his complex pediatric care; the shortfall is part of CHOA's uncompensated care cost supporting CHOA's DSH payment. The DSH payment helps CHOA maintain its specialty pediatric care capacity for Jamil and thousands of other medically complex children.

Diana, 84, rural Bulloch County, East Georgia Regional Medical Center. Diana lives in Statesboro. She is dual eligible. She has multiple chronic conditions and is hospitalized several times a year for exacerbations of congestive heart failure, COPD, and pneumonia. Her local hospital is East Georgia Regional Medical Center, which is the major hospital in the area but is much smaller than the Atlanta academic centers. East Georgia Regional serves a heavily Medicaid and dual-eligible patient mix. The hospital qualifies as a disproportionate share hospital and receives DSH payments. Without DSH, the hospital would face severe financial pressure. With DSH, the hospital continues to be available for Diana's repeated admissions.

Tasha's mother, 65, Albany, Phoebe Putney chronic care. Tasha's mother lives in Albany and has multiple chronic conditions including diabetes with complications, chronic kidney disease, hypertension, and depression. She is dual eligible. Her primary medical care is at Phoebe Putney's outpatient clinics, and her hospitalizations occur at Phoebe Putney Memorial. Phoebe Putney serves a large agricultural region with high Medicaid and uninsured populations. DSH payments support Phoebe Putney's ability to provide both inpatient and outpatient care to the population. The DSH support is largely invisible to Tasha and her mother but is critical to the hospital's continued operations.

Common questions and policy debates

Is DSH the same as Medicaid hospital payment? No. DSH is a supplemental payment in addition to regular Medicaid hospital payment. Regular Medicaid hospital payment is calculated based on Diagnosis-Related Groups (DRGs), per diem rates, or other methodologies specified in the State Plan. DSH is a separate supplemental payment to hospitals that serve a disproportionate share of low-income patients.

Is DSH the same as UPL? No. DSH and Upper Payment Limit (UPL) are separate Medicaid supplemental payment authorities. DSH is targeted to disproportionate share hospitals under Section 1923. UPL is a separate authority allowing payments up to the upper payment limit (essentially Medicare-equivalent rates). DSH and UPL can both apply to the same hospital.

Why does DSH matter for non-Medicaid families? Because the safety-net hospitals supported by DSH serve all patients, not just Medicaid patients. The Level I Trauma Centers, the high-complexity NICUs, the comprehensive stroke centers, the burn centers exist at the hospitals supported by DSH. When these hospitals lose financial viability, services close, and the loss affects everyone.

Why has DSH been controversial? Several reasons. State use of provider donations or intergovernmental transfers to fund the state share has been criticized as inflating federal share. The hospital-specific limit calculation has been subject to litigation. OIG audits have found compliance problems. The ACA's DSH reduction logic (expansion reduces uncompensated care, so DSH can decrease) is contested for non-expansion states. The interplay among DSH, UPL, provider assessments, and managed care directed payments creates technical complexity.

What is the future of DSH? Uncertain. The ACA-scheduled reductions have been delayed repeatedly but remain scheduled. Eventual implementation would reduce state allotments. Provider assessments may face additional federal limits. Managed care directed payments are increasingly being used as an alternative supplemental payment mechanism. The relationship between DSH and the broader hospital financing system continues to evolve.

Frequently Asked Questions

Disproportionate Share Hospital. The "Disproportionate Share" refers to hospitals that serve a disproportionate share of low-income patients (Medicaid beneficiaries and uninsured patients).

DSH is one of the most important Medicaid financing mechanisms supporting safety-net hospitals. Without DSH, many safety-net hospitals would face severe financial pressure, leading to service reductions or closures. DSH supports the financial viability of the hospitals that provide care to low-income, Medicaid, and uninsured patients.

DSH is funded through a federal-state partnership. The federal government provides matching funds up to each state's federal DSH allotment. The state share is funded through state revenue, provider assessments (in Georgia, the Hospital Provider Assessment), or other state sources. The federal share flows to qualifying hospitals through DSH payments.

Major Georgia hospitals receiving DSH include Grady Memorial Hospital, Children's Healthcare of Atlanta, Memorial Health (with potential changes after the HCA acquisition), Medical Center Navicent Health, Phoebe Putney Health System, Augusta University Medical Center, Northeast Georgia Medical Center, East Georgia Regional Medical Center, and many other regional and rural hospitals. The complete list is available through DCH public documents.

The hospital's DSH payment is calculated using the methodology specified in the Georgia Medicaid State Plan, based on Medicaid utilization, Medicaid shortfall (the difference between Medicaid costs and Medicaid payments), and uninsured patient costs. The total DSH payment cannot exceed the hospital-specific limit at Section 1923(g), which caps the payment at the hospital's uncompensated care cost.

The hospital-specific limit is the sum of (1) the Medicaid shortfall (cost minus Medicaid payments for Medicaid services) and (2) the uninsured cost (cost minus payments received for uninsured services). The calculation uses Medicare cost report data, hospital cost accounting, and additional documentation under detailed regulations at 42 CFR 447.297 to 447.299.

The Indigent Care Trust Fund is a Georgia statutory mechanism that collects state revenue and pays out for indigent care at Georgia hospitals. The Trust Fund provides part of the state share for DSH and other Medicaid supplemental payments. State contributions to the Trust Fund draw federal matching at the state's FMAP.

The Hospital Provider Assessment is a Georgia tax on hospital revenue. Assessment revenue is deposited in a state fund and used as the state share for federal Medicaid matching, including the state share for DSH and Upper Payment Limit (UPL) supplemental payments. The Assessment is structured to comply with Section 1903(w) federal limits on provider taxes.

UPL is a separate Medicaid supplemental payment authority allowing states to pay providers up to the upper payment limit (essentially what Medicare would have paid for the same services). UPL is not DSH and is not subject to the DSH allotment, but it draws federal Medicaid matching. DSH and UPL together substantially supplement regular Medicaid payments.

The Affordable Care Act of 2010 scheduled DSH reductions tied to the expectation that Medicaid expansion would reduce uncompensated care. The reductions have been repeatedly delayed by Congress through Consolidated Appropriations Acts. As of 2026, the reductions are still scheduled but have been deferred. The exact implementation date depends on future congressional action.

Because Georgia has not adopted Medicaid expansion, the ACA-related DSH reductions for Georgia are somewhat smaller than for expansion states (the formula adjusts based on Medicaid expansion status and uninsured rate). However, any eventual reduction would affect Georgia's safety-net hospitals.

A critical access hospital is a small rural hospital designated by Medicare based on limited bed capacity and geographic remoteness from other hospitals. Critical access hospitals receive Medicare cost-based reimbursement. They can also receive DSH if they qualify under federal Medicaid criteria.

Multiple Georgia rural hospitals have closed over the past two decades due to financial pressure, and inadequate Medicaid and supplemental payment funding is one of the contributing factors. DSH and UPL programs help support remaining rural hospitals, but financial pressure on rural hospitals remains significant.

No. DSH is a payment from the state Medicaid agency to the hospital. DSH does not affect what the Medicaid beneficiary pays out of pocket (Medicaid generally has minimal cost-sharing for beneficiaries, and DSH does not change that).

If an audit finds that a hospital received DSH payments exceeding its hospital-specific limit, the overpayment must be recouped. The state Medicaid agency recoups from the hospital, and the federal share is returned to the federal Medicaid program. The audit and reconciliation process is governed by 42 CFR 447.299.

The state Medicaid agency (DCH in Georgia) decides which hospitals qualify and how DSH is distributed, subject to federal regulations and within the state's federal DSH allotment. Hospital qualification follows Section 1923(b) criteria plus any additional state-defined criteria specified in the State Plan.

DSH payments are publicly reported. Specific hospital DSH amounts are documented in CMS DSH audit reports and in DCH public documents. The amounts are also documented in hospital financial filings (audited financial statements, IRS Form 990 for nonprofit hospitals).

Yes. Families can engage in policy advocacy through hospital community advisory boards, through state legislative engagement, through national hospital advocacy organizations, and through patient advocacy organizations. Local hospital authority boards in counties with public hospital authorities also offer engagement opportunities.

Key contacts

DCH Medicaid Member Services: 1-866-211-0950

DCH Aged Blind Disabled and Long-Term Care unit: 1-866-322-4260

Grady Health Patient Services: 404-616-1000

Memorial Health (Savannah): 912-350-8000

Medical Center Navicent Health (Macon): 478-633-1000

Phoebe Putney (Albany): 229-312-7100

Children's Healthcare of Atlanta: 404-785-5437

Augusta University Medical Center: 706-721-2273

Northeast Georgia Medical Center: 770-219-9000

East Georgia Regional Medical Center: 912-486-1000

Georgia Long-Term Care Ombudsman: 1-866-552-4264

Aging and Disability Resource Connection (ADRC): 1-866-552-4464

211 Georgia: dial 211

Disability Rights Georgia: 404-885-1234

Find personalized help navigating Georgia Medicaid and safety-net hospital programs at brevy.com.

BC

Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.