Research
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An NAUH study examines the financial impact on urban safety-net hospitals of health care reform and other cuts in Medicare payments on urban safety-net hospitals. These cuts – in Medicare DSH payments, from productivity adjustments and documentation and coding adjustments, in bad debt reimbursement, in hospital readmissions reduction program penalties, and Medicare sequestration cuts – are taking a significant financial toll on urban safety-net hospitals, and this study documents both the disproportionate impact of these cuts on urban safety-net hospitals and quantifies the extent of those cuts.
An NAUH study finds that private urban safety-net hospitals will bear a disproportionate share of Medicare spending cuts mandated by the Affordable Care Act. Chief among them is the massive reduction in Medicare DSH payments that takes effect in October of 2013 that will turn 60 percent of urban safety-net hospitals into money-losing institutions and lower their median operating margin to -2.02 percent.
An NAUH study finds that hospitals may lose as many as 87,358 direct jobs because of Medicare disproportionate share (Medicare DSH) and other Medicare spending cuts associated with implementation of the Affordable Care Act and another 46,103 hospital jobs if additional Medicare cuts currently under consideration in Congress – the elimination of Medicare bad debt reimbursement and a 60 percent cut in Medicare indirect medical education payments (Medicare IME) – are adopted.
An NAUH survey found that many urban safety-net hospitals are unsure of how to report their uncompensated care and revenue associated with uncompensated care on the Medicare cost report’s S-10 form. This form may be used to help calculate Medicare DSH payments when the Affordable Care Act’s 75 percent reduction of Medicare DSH payments takes effect in 2014, making this a potentially major problem for the federal government, urban safety-net hospitals, and the communities those urban safety-net hospitals serve.
An NAUH study finds that the reduction of Medicare disproportionate share (Medicare DSH) payments mandated by the Affordable Care Act will have an especially damaging impact on private, non-profit urban safety-net hospitals. These hospitals, just 7.5 percent of the nation’s acute-care hospitals, would absorb 45 percent of the Medicare DSH cut. This would leave nearly two-thirds of all urban safety-net hospitals in the red. The average urban safety-net hospital would lose as much as $8.3 million in Medicare DSH revenue in 2014, the first year of the cut, and up to $53 million during the first six years under this new policy.
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