Safety Net Financing Overview

Public and other safety net hospitals rely on payments from federal, state and local governments to meet their mission of ensuring access to care for low-income patients and preserving essential services — such as trauma, burn and neonatal intensive care services — for the entire community.

Medicaid, a dual federal-state governmental assistance program, funds care for low-income families, the disabled and the elderly. Medicaid also provides special payments, called Disproportionate Share Hospital (DSH) payments, to assist hospitals who serve these populations, as well as the uninsured.

Medicare — another important program for safety net hospitals and the patients they serve — is a federal program that funds care for the elderly and disabled. Medicare also makes special DSH payments to hospitals that serve low-income Medicare patients. State and local governments help finance the remaining financial gap for public and safety net hospitals. Additionally, both Medicaid and Medicare pay hospitals for the costs of training doctors and other health professionals.

NAPH supports preserving and strengthening DSH payments in Medicaid and Medicare for public and other safety net hospital systems to help them meet their mission to the community. In addition, NAPH supports strengthening the Medicaid program for low-income families and individuals, as well as adequate payments for the costs of training physicians through Graduate Medical Education (GME) payments.