Medicare DSH payments are designed to

• A. Provide additional funds for teaching hospitals only.
• B. Rewards high-volume elective surgeries.
• C. Disproportionate Share Hospital payments provide additional funds to hospitals serving a high share of low-income patients; impact revenue but may be subject to reductions and limits.
• D. Fund capital improvements for patient safety initiatives.

Answer: (C)

Disproportionate Share Hospital payments are designed to provide extra Medicare funds to hospitals that treat a large share of low-income and uninsured patients. The purpose is to help cover the higher costs of caring for vulnerable populations and to support safety-net hospitals that serve a disproportionate number of such patients. Because the overall DSH pool is limited and subject to policy changes, these payments can be reduced or capped over time, which is why the revenue impact may vary. This concept isn’t about funding teaching hospitals exclusively, rewarding high-volume elective surgeries, or financing capital improvements for patient safety; those are separate programs or drivers of funding.