For the last 100 years, KershawHealth has been guided by its mission to care for everyone, and we believe that has made for a stronger community and a better hospital. Today, we continue to hold fast to that mission in spite of the seismic shifts occurring in healthcare.
It is important to note that this mission of caring for everyone comes with a cost -- a cost that is growing each year. That cost shows up in many areas, most significantly as charity care provided to those with little or no means to pay and additionally as care provided to low-income patients covered by Medicaid.
In the last fiscal year, the cost for charity care provided by KershawHealth was approximately $5.6 million, an increase of nearly 20 percent from the previous year. Significantly, it should be noted that we experienced unprecedented levels of charity care in just the last two months of our fiscal year ending in September 2012. This amounted to $1.2 million in cost of care and 22 percent of total charity care cost for the entire year.
While it is true that federal law requires us to provide care to all in the Emergency Department, that care is only part of the picture. Most charity care grows directly out of our mission and it incorporates much more than just care provided in our emergency room or inpatient services. It includes, for example, all the imaging services we provide for patients from the Community Medical Clinic. Patients who otherwise might go without these valuable services.
Related to charity care is the care we provide for low-income patients covered by Medicaid. In the last fiscal year, our Medicaid reimbursements were reduced by $1 million. Moreover, like many hospitals in South Carolina, we care for a disproportionately large number of these patients. Because of that, we receive additional funding from the Disproportionate Share Hospital (DSH) and nursing home Upper Payment Limit (UPL) programs. In 2011, our reimbursement from these two programs was reduced by nearly $1 million. The full impact of the increase in charity care, along with reductions in Medicaid, DSH and UPL payments was more than a $2.9 million decrease for KershawHealth in FY 2012.
It is important to note that years of consistently positive performance have resulted in a balance sheet strong enough for KershawHealth to weather these current challenges. However, these declines in Medicaid, DSH and UPL payments are expected to continue, and charity care shows no signs of slackening. With that in mind, we must continue at an even faster pace to adjust to the continuing changes in the overall U.S. healthcare system. Failure to do that will impact our ability to continue KershawHealth's mission of providing care for everyone into our next century of service.