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Hospital Funding Issues

According to Modern Healthcare, hospitals  across the country are facing a critical funding issue in the near future.  This funding issue comes as a result of provisions mandated by the Patient Protection and Affordable Care Act,in which the federal government will unveil  more than $18 billion in cuts for the Medicaid disproportionate share.

In response to these upcoming cuts, a number of hospitals around the country have signed a letter asking the government to delay cuts to Medicaid supplemental funding for the care of the uninsured and low-income patients.

Expected to go into play between 2014 and 2019, these cuts were devised under the prediction that hospitals would be providing less and less uncompensated care to patients because it was expected that all states would expand the Medicaid eligibility to adults earning up to 138% of the federal poverty level.  However, these expectations did not come to fruition when the U.S. Supreme Court made Medicaid expansion optional for the states last fiscal year.  As a result, about half the states have not expanded their programs.  Furthermore, and which has been well documented in the media, there has been unexpectedly slow enrollment of uninsured Americans through the respective exchanges and the much-maligned website HealthCare.gov.

The hospitals which reside in the states that did not expand Medicaid eligibility are expected to be hit the hardest by these cuts.  Already, some hospitals which service rural areas already are closing down. This trend is likely to continue IF the cuts continue as planned

The letter mentioned above documents the respective hospitals’ requests for a freeze on the Medicaid DSH cuts for a minimum of three years. This freeze would allow hospital executives to gauge the extent of Medicaid coverage expansion in their respective states, as it is expected that at least some of the states will expand their program.

If given this extended time frame, it is recommended that said hospitals explore additional projects to improve their operations and enhance their revenues to hedge against these possible cuts.

Has your hospital begun preparing for these cuts?  If so, please comment below.

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