Noteworthy News

Safety-Net Hospitals Imperiled By Medicaid Cuts

The financial health of urban safety-net hospitals faces yet another challenge from state governments looking to reduce their Medicaid spending.

With supplemental funding from the 2009 federal stimulus law gone, the economy still in free-fall, and Medicaid costs still rising, most states are looking for ways to reduce their Medicaid spending.

According to a new survey conducted by the Kaiser Commission on Medicaid and the Uninsured, nearly every state in the country has implemented at least one policy designed to cut Medicaid costs in the past two years.  Among the more common cuts:  reduced payments to providers; reduced benefits for beneficiaries; new co-pays for beneficiaries; greater use of managed care; and a renewed effort to make greater use of home- and community-based services for recipients who need long-term care.

Such cuts pose a major challenge to NAUH and urban safety-net hospitals.  The growing ranks of the uninsured has made new demands of urban safety-net hospitals – new demands in the form of more Medicaid patients for whom they are under-reimbursed by their state governments and more uninsured patients.  Consequently, at the same time that the federal government is preparing to reduce their Medicare disproportionate share (Medicare DSH) and Medicaid disproportionate share (Medicaid DSH) payments and possibly implement other Medicare cuts as well, urban safety-net hospitals face the prospect of further reductions in Medicaid payments that in many states come nowhere near the cost of the services that hospitals provide to their Medicaid patients.

Read a summary of the survey’s findings and a find a link to the entire Kaiser survey hereiStock_000001497717XSmall.

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