Research

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.

An NAUH study finds that private, non-profit urban safety-net hospitals care for more low-income and uninsured patients and are in worse financial condition than any other type of private hospital in the U.S. today. Among the patients these hospitals serve are especially large numbers of Medicaid recipients and low-income elderly individuals who cannot afford their Medicare co-pays and deductibles. This poses a great financial challenge to urban safety-net hospitals, which collectively have a negative operating margin: this means that as a group, their expenses for caring for all of their patients are greater than the payments they receive for caring for those patients.