Disproportionate share hospital
What is a disproportionate share hospital?
A disproportionate share hospital is a hospital that serves a significantly disproportionate number of low-income Medicare patients. The hospital receives payments from the Centers for Medicaid and Medicare Services to cover the cost of providing care to uninsured individuals.
A facility must fit one of these classifications to be listed as a disproportionate share hospital and purchase outpatient drugs at a significantly discounted price:
- A private nonprofit hospital that is under contract with the local or state government to offer healthcare services to low-income individuals who are ineligible for Medicaid or Medicare
- A public or private nonprofit corporation that has been formally granted governmental powers by a unit of state or local government
- Owned or operated by a unit of local or state government
To participate in the 340B Drug Pricing Program, the disproportionate share hospital must have a disproportionate share adjustment that is greater than 11.75% for the most recently filed cost report.
Why are disproportionate share hospitals important for healthcare?
Disproportionate share hospitals provide care to vulnerable populations that otherwise would not be able to access healthcare, such as low-income patients, those with insufficient health coverage, or those who are uninsured. In this way, disproportionate share hospitals help address social determinants of health and other barriers to equality in healthcare.