CMS has put on display a final rule that implements reductions to state Medicaid Disproportionate Share Hospital (DSH) allotments mandated by the ACA. The final rule sets forth the methodology to implement the annual reductions for fiscal years (FYs) 2014 and 2015, and it establishes additional DSH reporting requirements for use in implementing the DSH methodology. The ACA statute requires annual aggregate reductions in federal DSH funding from FY 2014 through FY 2020; the aggregate annual reduction amount for FY 2014 is $500 million, and the reduction for FY 2015 is $600 million. CMS points out that the reform to DSH payments “is consistent with the reduction of uncompensated care costs (particularly those associated with the uninsured) expected to result from the expansion of coverage under the statute.” CMS will issue separate regulations addressing the DSH formula for years after FY 2015 that will account for Medicaid coverage expansion. The official version of the rule will be published on September 18, 2013.