Disproportionate Share Program

The Medicaid disproportionate share program (DSH) was created in the early 1980s to provide payments to hospitals to help cover the costs of uncompensated care. Though various local, state and federal programs also provide hospitals with payments to cover uncompensated care, the Medicaid program is the largest subsidy program that issues these types of payments. In 1998, more than $15 billion in Medicaid DSH payments were issued to hospitals.

The purpose behind the DSH program was to provide hospitals with enough compensation to offset the hospitals costs for serving the uninsured and low-income populations. In this way, the program seeks to continue to encourage hospitals to provide health services for these individuals.