Hospitals are preparing for $ 149 billion for payments led by Medicaid State

Hospitals put on hold of major extension projects and offender for service reductions, because new limits to payments led by Medicaid threaten to tighten already tight finances.

To worsen things, many hospitals will see their income and their margins decrease as millions of Americans lose health coverage and uncompensated care costs increase in the recently promulgated budget reconciliation package, nicknamed the major bill.

The law restricts the new payments led by Medicaid, financial agreements allowing states to make additional payments to health care providers for services covered by managed care contracts. It caps these payments to 100% of health insurance rates in the MEDICAID expansion states and 110% in non-expanding states, while gradually reducing existing payments higher than these levels from 2028.

Changes will reduce Federal Medicaid expenses of $ 149 billion over 10 years, according to the KFF health policies research company.

State -run payments allow states to mandate that care regimes managed by Medicaid compensate suppliers at specific rates, which have been marked against commercial insurance rates which can be double or triple what Medicare pays. Payments have become an essential source of income, totaling more than $ 100 billion in annual medical spending on a national scale.

While state -run payments are reduced, hospitals will also have to increase the uninsured increase in population, which should increase by 10 million under the legislation and add $ 433 billion to the unpaid care costs of hospitals from 2025 to 2034.

Safety security hospitals will be particularly vulnerable because they treat a large number of Medicaid and not insured patients.

“Our member hospitals will be really in double incrimination in the coming years,” said Beth Feldpush, the main advocacy vice-president and policies in American essential hospitals, which represents more than 350 security net suppliers. “Their unpaid care costs will increase because people will always come for treatment, and once they are discovered, many of these costs will simply end up unpaid care for our hospitals.”

Overview

The payment reductions led by the State, which are the third source of federal Savings of Medicaid in the reconciliation package, come while the congress on the congress is raised concerns concerning the rapid growth and the transparency of the payments led by the State.

The Payment and Access Commission of Medicaid and Chip, which advises the Congress on the Payment Policy of Medicaid, called for better surveillance, noting that “it is not clear to what extent the payments led by the State have made significant improvements to access” to care.

Macpac has also raised concerns about states using creative financing programs that could inflate federal funding from Medicaid without the states having to invest their own resources.

Hospitals claim that state -led payments are an important source of financing, in particular for providers of rural communities and unpreosedy with a large share of Medicaid patients, because the program generally reimburses much less than Medicare or commercial insurance.

Providers or establishments dealing with many Medicaid patients rely on a patchwork of funding flows, including state -run and disproportionate hospital payments to strengthen their balance sheets, according to hospitals.

“Beyond the simple support for daily operations, these programs have been really transformative in communities across the country,” said Feldpush. “These are the communities that are at the limit of access to health care such as it is – in these small cities or rural counties, they are likely to lose health care in these regions if all this advances.”

Limited state options

States can try to replace lost federal funding, but many are limited by their budgets. Although the new limits to state -run payments will reduce 14% of the total Federal Medicaid expenses over 10 years, certain states, such as Louisiana, Illinois, Nevada and Oregon, face discounts of 19% or more.

Many financing agreements exist because states do not have enough general funds to fully support their Medicaid programs.

“It will be incredibly difficult for states to complete this funding, because states are generally not seated with a lot of money at their disposal,” said Feldpush.

States will probably have to make difficult choices, in particular the reduction of providers’ payment rates, the elimination of optional benefits or limitation of eligibility for Medicaid, according to Avi Herring, Managing Director of Manatt Health.