Hospital payments have dropped $250B

Payments to hospitals have been reduced by more than $250 billion over the last decade, according to a recent study.

The study, which estimates cumulative federal payment reductions to hospitals from 2010 to 2019 beyond those stemming from the Affordable Care Act, was commissioned by the Federation of American Hospitals (FHA) and the American Hospital Association (AHA) and conducted by Dobson DaVanzo & Associates. In total, 12 legislative acts were identified as well as other regulatory actions that reduced payments to hospitals by $252.6 billion over this time period.

A big chunk of those reductions came from sequestration budget cuts in 2011, which were designed to shave $1.2 trillion in federal budget savings over a decade. Expansions of the budget sequestration have also extended hospital payments with cuts to Medicare providers. In total, budget actions have taken $85.8 billion away from hospital in the form of reduced payments.

Other impacts on federal payments to hospitals include:

  • Payment of Medicare bad debt––$5.7B
  • Hospital documentation and coding adjustments––$85.7B
  • Reduction in post-acute care provider payment updates––$7.3B
  • Off-campus provider based hospital outpatient departments––$23.7B
  • Medicare payments for long term care hospitals––$8.1B
  • Clarification of 3-day payment window––$4.2B
  • Hospital transfer policy expanded to hospice––$6.2B
  • Federal Medicaid DSH allotment reductions––$25.9

Find the full report here.